What are the Key Success Factors for Digital Transformation?
Business activities in almost all sectors are affected by this digital transformation. No company will escape from a future digital world where people and objects are connected anytime, anywhere, with any device, even for the most traditional industries such as agriculture and transportation.
Digital Transformation – Company dematerialization
What digital transformation means for enterprises? Digital not only affects the way we market products or services but the profession as a whole. The digital transformation of the company lies in the digitization of its business.
Digital transformation is not a new phenomenon. The first commercial website – the Global Network Navigator (GNN), which offers clickable advertisements, was launched in 1993, and the largest Internet-based retailer Amazon was founded in 1994. Until early this century, traditional economy and digital economy could even coexist. However, the second gradually eroding the first … Until now, it is impossible to create a company without digital components.
Transform businesses of the last century
Everyone is aware that computers, networks, software, algorithms and data will definitely transform the world. The generation who witnessed the changes over the last 35 years will categorize the world as “pre-digital” and “post-digital” because the concept of digital transformation is primarily addressed to them. However, for the later generations, the “digital natives”, they do not have to be convinced.
When this applies to companies, for those companies which were born before the 90s, and the business was built on a former model, must reinvent the digital age. In comparison, for the “start-ups” thrive in a ubiquitous digital culture with new vision of work (collaborative management) in their business models, their businesses are already “digital” from the beginning.
Digital Transformation – Business model, customer experience, organization
Of course, the digital transformation is not to digitize the company. The digital transformation is to evolve the company’s activity in a digital and connected world around three fundamental axes – Business model, customer experience and organization
1. Review the business model
For the company, the digital transformation shakes all the pillars on which it rests. Starting with the business model, the fundamental question posed by the digital transformation for the “pre-digital” business is to know how to generate revenue, margin, in a digital world. If a company still pursues an activity based on a business model from the last century, it is unlikely that the company won’t continue to be profitable long.
Who would think of mentioning the “digital transformation” for start-up? No one, of course. Since these companies are natively digital. Because they are, live and think digitally at the first place, and construct on the basis of a fully oriented activity on digital channels. In addition, because they adapt and modify their organization in almost real-time and they constantly adjust their offers, learning behaviours of their clients, they will change the business model along the way.
2. Adjust customer experience
Personalization of content, use of data to create relevant experiences, implementation alignment of all channels… customer experience is the second lever of the digital transformation. The effort is to gain deeper knowledge of the customer through the digital (e.g., tracking behaviours and geolocation).
The collection and analysis of data becomes the fundamental outlook of this client knowledge. It can start by improving experience with the product, the brand, the relationship that the firm may have with the consumer. “Web Analytics” and “Big Data”, which involve in the processing of large amount of “structured” and “unstructured” data, become the key tools for digital marketing.
Marketing increasingly becomes personalized, which is trying to make it as smooth as possible for the business-consumer relationship. Beyond this customer knowledge, companies must also consider the various “touch points” of the consumer with the brand, the product or service; for example, mobile shopping and promotions through social media. All digital marketing challenge involves setting serving a cross-channel device for digital and nomadic customer.
3. Rethink the organization
The reflection on the digital transformation must first address the preliminary analysis of digital maturity. Integrating digital components in each dimension and in the company’s service should be guided with an overall vision.
Usually in a company, the digital transformation will be guided by the Chief Digital Officer (CDO), whose function will be mainly in developing and implementing the overall digital strategy, support managers and teams, define key performance indicators, and implement a measurement plan. The CDO’s role within the management committee also means to assess how the digital components impact the business and answer fundamental business questions:
- What it sells – Its products or services (e.g., paper book to digital book, or face training to e-learning)
- How it sells – trading platforms, social media, mobile…
- How it provides – digital marketplaces, crowdsourcing …
- How it manufactures – 3D printing is revolutionizing the industry and soon the bio-technology …
- Who sells it – purchasing behaviors have changed, as with the famous ROPO (Research on-line, purchase off-line), click-and-collect (customer purchases on the Internet, retrieves the merchandise in stores ) or drive-to-store…
- How it organizes and manages – digital workplace, collaborative management, social networking company …
Why does the digital transformation so afraid?
The digital transformation, basically, is a process that companies already know, and that started first with the use of computer, the collection of data, and the information processing. All companies have therefore made their digital transformation for a long time.
Digitization means dematerializing their documents (office automation, document management, Intranet), structuring their data (DBMS), and organizing their activity streams (workflows). These are something that today’s “traditional” companies feel cornered, and it is certainly the opposition of their old model.
The scary part is that companies understand, painfully, that the models that operate today are radically different from previous ones. To transform, it will have to forget the past, and many companies are not ready, and are still far from it.
But the real key to success for a successful digital transformation is to first transform the minds, attitudes and practices, and to change the mindset of the company. The key to the successful transformation is to think digital first.
