The digital age, businesses that fail to adapt may struggle or even fall behind. Globally, more than two-thirds of executives plan to invest in some form of digital transformation in 2020. In North America, this number rises to 80%. Digital transformation is a complex undertaking with an extensive range of options and possibilities for companies.
It involves more than just installing new technology or upgrading software. It takes careful consideration of your company’s goals and where you would like to be in the future. Preparing for digital transformation involves making tough decisions about how you will work in the future, so it is important to have a business strategy.
Why Invest In Digital Transformation?
Digital transformation isn’t just about disrupting industries or putting new technology in place. It’s an intelligent and people-oriented approach to change that can enhance people’s lives, improve products and services, forge ahead in the face of competition and create the kinds of business practices that will make your company sustainable in the long term.
It is an opportunity for companies to learn about their customers’ needs and behaviours, to reskill staff and take advantage of digital tools like artificial intelligence. Across different niches and industries, you can leverage digital transformation to digitise the way your company produces, manages and gains insights about its products.
During 2020 to 2025, the worldwide digital transformation market is anticipated to expand at a compound annual growth rate (CAGR) of 16.5 percent, from $469.8 billion in 2020 to $1,009.8 billion in 2025 (Research & Markets, 2020).
5 Ways to Prepare for Digital Transformation
1. Revisit Your Business Model
If you don’t know where your business is going, it’s difficult to plan how to get there. Look at your current company structure and supply chain to understand the model you currently use. For example, if you operate as a distributor for other companies’ products, this limits what you can do with your business.
If you’re using an outdated business model, now is the time to consider if digital transformation will help you expand your offerings and better meet customer needs. For most companies, this means moving from a product-based or service-based company to one that operates as a technology company. This kind of transition requires extensive planning and strategy – which involves answering questions such as:
- How will you sell your service or product differently in the digital age?
- How will you implement new tech tools, software or hardware?
- How new tech tools will change your business operations?
- Do you need to hire new employees or reskill your current ones?
- What changes will our company need to make in order to meet its basic needs?
Chances are, your competitors are already into it, with 46% of small businesses using BI tools.
2. Invest in The Right Technology
Your company will need to make changes in order to move forward. This means you’ll need the right technology, software and hardware for your business goals. New technologies like artificial intelligence (AI), augmented reality (AR) and blockchain are changing the way businesses operate every day. Without these tools, it can be difficult for companies to catch up to their international counterparts.
For example, companies in Europe are already using blockchain technology to fight counterfeit and increase transparency in business. BR discusses how digital transformation is impacting the way consumers interact with brands.
The Aberdeen Group has determined three digitalisation technologies that have the potential to transform operations – the Internet of Things (IoT), for its capacity to furnish operational intelligence, the cloud for its scalability, and big data analytics, which may turn data into predictive and responsive insights.
3. Identify Talent Gaps
Your employees are your company’s greatest asset. Without the right people in place, you won’t be able to transform or create a sustainable business model. As part of your preparation for digital transformation, identify gaps in the talent areas most important to your business goals.
If you want to move from being product-based to technology-based, you’ll need to bring new talent on board. If you’re looking to expand your company offerings, you may need to hire people who can scale your supply chain or create new technology for your products.
Remember that digital transformation is equally about talent as much as it is about technology.
4. Ensure Stakeholders Are On Board
Your employees and business partners will be instrumental in getting you through your transformation. They’ll need to understand the company’s new tech-centric business model, so take steps to ensure everyone is on board with your digital strategy. You should also invest in digital training programs for staff members who aren’t tech-savvy or don’t have the required skills for this type of business.
As part of your transformation efforts, you may want to look at the company culture and philosophy as well. A new tech business model will require a different kind of environment than what your employees are used to. Creating this type of culture will pose its own challenges, but it will be essential for success in the long run.
5. Use Data Inform Decision-Making for Digital Transformation
Your company will be driven by data – and you’ll need to implement new tech tools to help gather it. For example, AI can provide insights into the best time to market a product or offer discounts to encourage purchasing.
Large amounts of data can also uncover customer trends and buying preferences, so consider how your business will use this information as your company moves forward. For example, you can track customer sentiment on social media channels to better understand and serve your market.
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Your business’s future success depends on the steps you take now. Investment in data and technology will be key to remaining competitive as we transition into a digital-first economy and society. By preparing your company for the digital transformation ahead, you’re taking a proactive approach to the business strategy that will lead to growth and success in the years to come.
If you’d like to find out how our part-time Directors deliver transformative leadership as a member of your team, please get in touch.