By Ni?o Valmonte
Digital transformation (DX) is loosely defined as the process of enhancing operational efficiency taking place within organizations whereby various tasks and activities are accelerated through the use of varying technologies.
This internal transformation among organizations is the result of a larger digital revolution which has taken root in the consumer psyche. Customers now know what you are selling before you even start your pitch. This is the catalyst for change in both global and local business landscapes.
In the Philippines alone, industries like business process outsourcing, healthcare, telecommunications, and real estate, among others, are going through a digital shakeup and are expected to serve customers better than before through digital means, both customer-facing and in the back-office.
A recent IDC study projects that about 25% of companies in the Philippines will have dedicated focus in covering digital transformation by 2018; and 25% of top 1,000 Philippine corporations will see their businesses dependent on their capability to produce digital-based products and services by 2020.
What do businesses get out of digital transformation? Are there any downsides? Let?s explore this further.
The benefits of digital transformation
If done right, digital transformation can add value to an organization and contribute to its growth. Specifically, it can:
1. Improve employees? work performance
Digital transformation can improve efficiency in the office. By using tools like cloud productivity solutions, you enable your employees to work quicker and better and encourage them to collaborate with colleagues.
2.Enhance customer experience
Digital transformation can bring about customer satisfaction. For instance, by having a reliable CRM (customer relationship management) system, sales reps can record every bit of information they gather about customers in real time, allowing other departments in the company to be more familiar with the customer?s needs, and engage with them better. Relevant engagement from various touchpoints leads to strong customer experience and loyalty, and bolsters brand equity and more sales from existing and new customers.
3. Provide data protection
Equally important with using digital tools is securing them from possible cybercrime. As such, organizations make sure to protect their data by employing security solutions and partnering with organizations with controlled facilities that are able to do so for them.
4. Enable competitiveness
Digital transformation is related to how businesses can stay on top of the game, and remain relevant as the world becomes increasingly digital. Experts agree that it is a survival issue. To thrive in business these days, you must know how to adapt with technology, use it well, and create strategies in employing such.
5. Improve profitability
According to the MIT Center for Digital Business, ?companies that have embraced digital transformation are 26 percent more profitable than their average industry competitors and enjoy a 12 percent higher market valuation.?
The pitfalls of digital transformation
Surprisingly, 84% of digital transformations fail. Here are some of the reasons why.
1. Inadequate background about DX
When you jump into an unknown abyss, you?ll mostly likely end up getting hurt. The same idea rings true when undergoing digital transformation. Strategize, and determine what you need to invest in (such as the right people, technologies, and initiatives) to prevent confusion among your employees (on what you?re really doing for your company) and create inconvenience to your customers, particularly when you have to automate work processes. Change management is key.
2. Not having the right leaders
Do you have the right managers to lead you through the digital transformation journey? While being technically brilliant, your Chief Digital Officer (CDO) should have the soft skills to motivate your employees. He/she must know how to support your staff and patient enough to teach them how to deal with the digital tools, and cope with change. Evangelization is a critical component in the process of transformation and leaders need to be adept at ?tending the flock?.
3. Having the wrong people
Even with proper guidance and evangelization, if employees do not possess or adopt the right attitude in the face of digital transformation, changes will be difficult to implement. Employees must be open to change and eager to discover new practices and technologies, take the time to learn and adjust to the applications they?re using in order to efficiently carry out work objectives.
Encourage a collaborative culture and get rid of silos. Ease the tension by creating a positive environment where employees support one another in the digital transformation process. It helps to have an internal communications team who can initiate celebrating success and cheering the staff on when going digital feels unbearable or difficult.
Embarking on digital transformation is not a walk in the park. Aside from utilizing new technologies, you need to take into account the people, the processes, and the right business mindset for your company to achieve further growth and success.
You need not embark on the journey alone either. Various IT companies provide consulting and best practices to help organizations accomplish such an undertaking. Choose a partner that can provide the depth and breadth of knowledge in the information and communications technology space, and more importantly, one you feel comfortable working with long term.
The author is the director for marketing and digital innovation at IPC
