Digital transformation is the integration of digital technology into all areas of a business, changing how you operate and deliver value to customers. It is the process of using digital technologies to create new business processes, models, culture, and customer experiences to meet ever-changing market demands.
Digital transformation is imperative for all businesses, from the startups to the giant enterprises. Thinking, planning and building digitally sets your business up to be agile, flexible, and ready to grow. What’s not clear to many enterprises is what digital transformation means.
Technology plays a crucial role in an organization’s’ ability to evolve with the market and continually increase value to customers. Organizations are in different places on the road to digital transformation. One of the hardest questions in digital transformation is how to get over the initial humps from vision to execution.
What is digital transformation?
As digital transformation will look different for every company, it can be difficult to pinpoint a definition that applies to all. Digital transformation can be defined as the integration of digital technology into all areas of business operations and delivering good customer experiences. The Agile Elephant emphasizes the ways businesses need to adjust their practices: “Digital transformation involves a change in leadership, mindset, business models, and digital assets to improve the experience of the organization’s employees, customers, suppliers, partners and stakeholders.”Andy Ann, Founder and CEO of NDN Group, said, “Every digital transformation is going to begin and end with the customer experiences. Businesses don’t transform by choice because it is expensive and risky. Businesses go through transformation when they have to innovate and evolve. Seamless customer experience is one of the most important discriminating factors for how a business will perform and succeed.”
Why does digital transformation matter?
A business may take on digital transformation for various reasons. But by far, the most likely reason is that they have to: It’s a survival issue for many. Digital transformation does not simply mean changing how you do business or creating new types of businesses. It’s about keeping the core competence, and using faster and better ways to instantly access customer data and not trapped somewhere in an archive.
Think of customer service, whether in retail or a call centre. Digitalization changed service forever by making customer records easily and quickly retrievable via automation. Customer service has not changed, but the process of searching customer data and offering a resolution became much more efficient with automation.
For example, deploying an automated customer Chatbot will allow businesses to automate customer service live chat conversations. According to IBM, up to 80% of routine customer service questions could be answered by a simple AI Chatbot. Chatbots can be trained to respond to customer service questions and provide fast solutions, 24/7.
Enterprise leaders have largely gotten the message and are prioritizing accordingly. At NDN, we have deployed and used AI technologies including machine learning and natural language processing for a local bank (Hang Seng Bank), creating a virtual assistant that is able to simulate human-like contextual conversations and interact with the bank’s customers. The Chatbot can communicate in Chinese and English, and can also understand Cantonese as well as the mixing of English and Chinese. Through interacting with customers, the Chatbot will continuously improve their ability to address customer inquiries.
It is widely expected that worldwide spending on technologies services that enable digital transformation will reach US$1.97 trillion in 2022, per the (IDC) Worldwide Semiannual Digital Transformation Spending Guide. IDC predicts that digital transformation spending will grow steadily, achieving a five-year compound annual growth rate of 16.7 percent between 2017 and 2022.
IDC predicts that, by 2020, 30 percent of Global 2000 companies will have allocated capital budget equal to at least 10 percent of revenue to fuel their digital strategies. Advanced analytics is the number-one digital investment – with enterprises planning to increase related deployments by 75 percent during the next 12 to 18 months.
Organizations are at different places in the digital transformation journey. Business leaders face pressure to show that digital transformation initiatives and strategies continue to translate to increased agility and speed for the entire organization. Fostering seamless customer experience has become a crucial goal and thus a crucial part of digital transformation.
What does digital transformation framework look like?
Digital transformation changes widely based on an organization’s challenges and demands. Yet, there are a few constants and common themes among published frameworks that all business leaders should consider when initiating digital transformation.
These digital transformation elements are cited in a wide array of aspects over customer experience, operational agility, culture, leadership, workforce enablement and digital integration. Below are a few examples of digital transformation frameworks include:
· MIT Sloan: The Nine Elements of Digital Transformation
· Cognizant: A Framework for Digital Business Transformation
· Ionology: A Step-By-Step Guide to Digital Transformation
· IDEO: The Human-Centered Design Toolkit
While each guide has its own recommendations and varying considerations, leaders should look for those important themes when mapping out their own digital strategy.
Adapt business to leverage digital transformation
Digital transformations have reshaped how companies approach customer service and enhance user experience. The rise of social media has changed service much like it’s changed advertising, marketing, and even sales and customer service. Forward-thinking companies embrace technologies, including artificial intelligence, blockchain, big data, and social media to extend their service offerings to customers on their platforms.
What happens when Digital Transformation creates Exponential Growth?
It is not that we don’t know exponential growth is coming due to digital transformation. What we misunderstand is the speed at which it comes. At Singularity University, Peter Diamandis talks about the Moore’s Law and the speed of technology accelerating our entire economy. In conclusion, we advise leaders to dive deep into the process of creating powerful tools for scaling the business and stay competitive among competitions.