Large companies are investing heavily in digital transformation. With the investments, the companies are leveraging the extensive amount of return on investment and becoming ideal for small and medium-sized enterprises.
However, in the run to follow the giant enterprises, small and medium businesses underestimate the various steps required to ensure success in digital transformation. They underestimate the key drivers of digital transformation, the ingredients for success, and the process of digitizing their business.
If you are a business struggling to get enough return on investment after investing in digital transformation or want to invest in it, you are at the right place. Keep reading, and you will explore key ingredients to ensure digital transformation success.
Key digital transformation drivers
Every enterprise is motivated by some key digital transformation drivers. It can be custom experience, efficiency or waste reduction, business agility, and more.
Business agility: Businesses have to continuously improve and innovate to remain in a competitive advantage or lead the competition. Digital transformation in this regard can help businesses to adapt to the changes, launch products according to the trend, and deliver effective service to customers.
Efficiency and waste reduction: Digital transformation increases efficiency and reduces waste for enterprises. For example, instead of using printing machines to print instructions and enter data manually, enterprises can use communication tools like Skype and use database management tools to manage data.
Customer experience: Setting up a telecom service to take customer experience demand investment. In contrast, a digital chatbot might help users to clear most of their queries.
Error elimination: Human-based activities are more prone to errors as compared to digital systems. Computers run instructions effectively and exactly according to the programmers.
Key digital transformation ingredients to ensure success
According to Sandford’s Erik Brynjolfsson, enterprises lack a return on investment from new technologies because they do not focus on factors like upskilling their employees with the digital revolution. Most enterprises face this issue and end up investing billions of dollars yet not getting a return from it.
And the main reason is that they want to copy exactly what Google or Amazon is doing. They forget about the amount of research these giant enterprises perform before investing in large. Here are the Key digital transformation ingredients to ensure success.
People- the source of data
Digital transformation does not start with investing straight in technology. It started with people, who are also known as valuable entities, whenever an enterprise refers to valuable data sources.
Every transformation must start with the consumers, clients, and employees, which are the key entities when we talk about people as Key digital transformation ingredients. In the 100% of the investment in Information technology, most of the enterprises invest 70% while copying other big enterprises, 20% to grow with digital transformation, and 10% to transform as a business (Source).
So, instead of focusing on copying your competition, study your users and upskill your workforce to meet the demands of the digital trend.
Data- a key ingredient
Data is another key ingredient after people. People provide valuable data to an enterprise. Whether it is in the form of interactions with customers or records customers have provided, data plays a key role. Without data, even if you invest heavily in your digital transformation, you won’t be able to bring meaningful activities to your organization.
For example, Artificial intelligence runs over data. While training the systems, data sets are processed in massive amounts to bring actionable insights to the business. Technologies like machine learning algorithms and social sensing technology understand verbal and nonverbal behavior, and gamified assessment tools act as a Key digital transformation ingredient to ensure success
Insights- analyzing the data
Data is just a chunk of information without insights. Refer to data as oil that requires cleaning and refinement before putting it to the final use. The technology uses data as an ingredient and converts it into actionable insights for enterprises.
These meaningful insights have a strong presence in making decisions in an organization. Automation, cloud computing, and cyber security play a key role in the process of achieving insights from the data.
Action- taking steps to polish the next cycle
While writing down an idea and selecting it what do you do? Probably write it on a paper multiple times and finalize only one of them. We throw the rest of the papers that are not of our use.
Similarly, without action, all the insights just act as a theory that a human being forgets if not bought in action. Here an enterprise needs high-quality experts to prepare a plan to execute the insights into action because digital transformation is about talent, not technology.
Evaluating the results is what differentiates a regular enterprise from an extraordinary enterprise. Once the evaluation is performed, you have to revisit your data and change the data sources or modify your products and services accordingly.
With the modification, the sources will send you new, better, and rich data sets that you can further use to analyze and prepare actionable insights.
Digital transformation process- the technical implementation
If you want to explore how your digital transformation journey should look, here are the five main phases according to a book by Bosse and Zink.
Inspiration phase: Considering the competition and studying their practical examples of technology and solutions.
Orientation phase: Determine your position in the identified competition so that you can analyze the efforts involved in your digital transformation journey.
Planning phase: Prepare a plan but also involve People in your organization to further polish it.
Conversation phase: Measuring your digital transformation journey by using data and insights adapted from multiple sources.
Evaluation and setup phase: With an excellent analysis and evaluation, you can repeat the mentioned phases with better efficiency and improve your digital transformation journey.
The above-mentioned drivers push the majority of organizations to adopt digital transformation in their business operations. But only a few organizations are able to successfully implement it because they ignore the Key digital transformation ingredients to ensure success. Finally, enterprises can revise the digital transformation journey by understanding the 5 phases and leveraging from the complete digital transformation cycle.