Digital transformation is the involvement of digital technologies in all traditionally run areas of a business. This fundamentally changes how a business operates and delivers its objectives to the customers. An organization seeks means of conducting digital business when it seeks to create a digital footprint.
Digital transformation also brings a cultural modification that aims to change a company’s core policy. The main focus of this change is business development by experimenting and taking risks often. This means implementing changes to the long-standing ideals of the company and relying on relatively new and undefined practices.
The challenges of digital transformation
Multiple organizations have tried digital transformation, but the success rate has always been low. Less than 30 percent of digital transformations tend to meet their desired goals. And the stats are expected to get worse in the future, as more and more industries are welcoming such changes. Even if an organization successfully meets its projected goals with the digital transformation it may fail to sustain the improvements.
Technical and digitally advanced industries like media and telecom struggle to succeed. The successful digital transformation rate for such companies goes down to 26 percent only. For traditional-run business organizations, the success rate dives down deeper. The stats say that oil, automotive, infrastructure, and pharmaceutical companies have a challenging success rate of 4 to 11 percent.
However, the success rates do vary depending on the size of the company. An organization with less than 100 employees has a 2.7 times better chance of survival as compared to a company of a larger size.
So, what is the key to a successful digital transformation?
The success of a digital transformation initiative depends majorly upon various factors within the company. It takes efforts from every employee of the organization. The most commonly targeted objective for digital transformation is digitizing the organization’s operational model.
Technological deployment
Most companies use a digital approach to launch a new product or service. some also aim to increase their digital engagement with the external partners on the platform. Different companies use different technological tools to enhance either digital footprint. Some of the most effective tools are:
- Traditional web tools
- Cloud services
- Mobile internet technologies
- Big data and big data architectures
- IoT (Internet of things)
- Design thinking
- AI tools
- Robotics
- Advanced neural machine learning techniques
- Augmented reality technologies
- Additive manufacturing
The most used tool for successful digital transformation is the basic web tool. However, organizations with successful transformations are more likely than others to use more sophisticated technologies, such as artificial intelligence, the Internet of Things, and advanced neural machine-learning techniques.
Having vital technological enhancements is however important, but there should also be change within the organizational structure. To support a digital transformation cultural changes that aid the development of the employees, as well as the company, should be practiced.
The appropriate leader
Change takes place at all levels during a digital transformation, especially when it comes to talent and capabilities. A new leader who is familiar with digital technologies should rise to manage the team. Appointing a creative and energetic leader in every department involved in the transformation can help in a smooth transition.
Another key to success is leadership commitment. Transformational success is more likely when the leaders and their seniors are more involved in the process of digital transformation.
Many organizations appoint a Chief Digital Officer (CDO) for their leadership roles. The Cdo is a person that understands the trends of the latest technology. This increases the chances of digital transformation by 1.6 times.
Developing individual skills and talent
A fundamental action for traditional transformations has proven to be one of the most important factors for success in a digital change effort. Redefining individuals’ roles and responsibilities so they align with a transformational goal is necessary. This can help provide clear roles and responsibilities within the organization.
Technology and innovation managers can bridge the gaps between the traditional and digital parts of the business. People in these roles help foster stronger internal capabilities among colleagues. These managers possess specialized technical skills and can lead the company’s work on digital innovations.
Better funded organizations usually are three times likely to convert a successful digital transformation.
Scaling up the workforce for talent development, hiring potential cross-functional and specific skill-based candidates depending upon the needs can double the chances of successful digital business conversion.
Encouragement to adapt according to the new changes
Digital transformations require cultural and behavioral changes such as calculated risk-taking, increased collaboration, and customer-centricity. There are two primary ways in which companies with successful transformations are empowering employees to embrace these changes.
The first is reinforcing new behaviors and ways of working through formal mechanisms, long proved as an action that supports organizational change. One related key to transformation success is establishing practices related to working in new ways. Organizations with continuous learning or open work environments, as part of their change efforts, are more likely than others to report successful transformations. Another key is giving employees a say on where digitization could and should be adopted. When employees generate their ideas about where digitization might support the business, the company has a better chance of success.
A second approach to empowering workers is ensuring that people in key roles play part in reinforcing change. Success depends on both senior leaders and those engaged during the transformation. Another factor for success relates to risk-taking. Success is more likely when senior leaders and leaders who are engaged in the transformation all encourage employees to experiment with new ideas.
Adopting accessible tools
For a successful digital transformation, companies make usage of the new digital tools a new norm. Training and development of the employees to work with these digital tools should also be put forth. Adopting digital tools to make information more accessible across the organization can double the likelihood of a successful transformation. An increase in data-based decision-making and the visible use of interactive tools can also increase the chances of success.
Communication is the key
Both traditional and digital method of operation requires equal efforts for communication. Proper communication is important throughout the digital transformation process. Using remote and digital methods of communication rather than an in-person approach can influence the team better. Thus, increasing the chances of success.
The key to success is communicating a change story, which helps employees understand where the organization is headed? Why it is changing? and Why the changes are important?
