What is digital transformation? It depends on who you ask, but typically it refers to the process of IT modernization or the process of developing new digital business models. As you optimize your digital capabilities, you radically change the way you operate and the way you provide value to customers.
Digital investments used to be thought of as nice-to-have perks only afforded by some of the best-in-class businesses. Now, however, digital transformation has been adopted by executives around the world, in almost every niche.
According to a recent survey, more than 80% of CFOs plan to spend more on digital technologies this year than they did in 2020. Much of this movement is fueled by the recent pandemic, which has put many companies on the fast track toward a more digital work environment.
Today, we’re taking a closer look at what digital transformation requires and how you can make the most of it.
Digital Transformation Requires a Digital Culture
Pivoting to a digital culture requires repositioning from a solutions-focused mindset to an expectation-driven one.
For years, companies were asking, “How can we make better products?” While this isn’t a bad question, executives are now asking a smarter question: “How can we leverage technology to improve the customer experience?”
Both questions have a similar meaning, but the latter is more apt to deliver long-term gains.
Digital technologies, like ERP software, are only as powerful as the people behind them. In other words, a transformation can’t get off the ground unless there’s the right cultural environment to support it.
Increasingly, this means developing a customer-focused culture. Today’s customers are fully entrenched in the digital space. They are more discerning and tech-savvy than ever before and expect brands to keep pace.
For example, terms such as contactless delivery, which weren’t part of the business vernacular before, are now household phrases.
Companies that can’t keep up with these demands are falling behind. Investing in the right tools and technologies is a good step, but it shouldn’t be the first one. Embracing cultural change should happen first.
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What is Digital Transformation? A Basic Roadmap
The concept of digital transformation can be overarching and hard to grasp. It helps to have a basic roadmap that your organization can follow when you’re ready to take a step forward.
Let’s take a closer look at the journey to digital transformation success.
1. Define Goals and Objectives
Don’t digitize your company just to say you did it. Instead, look for critical business outcomes that you want to achieve with these new enterprise systems and ERP solutions.
What core pain points are you trying to solve? Where could your workforce become more efficient? How is your competitor outpacing you?
If you’re feeling stuck, consider building a customer journey map to understand the various touchpoints that occur throughout your workflows. From there, you can identify areas of inefficiency and determine ways that technology can improve those workflows.
Unless there’s organizational alignment regarding project goals, you could end up investing in the latest technologies only to find that they don’t serve a great purpose at your company.
2. Integrate IT With Business
For a digital transformation to last, your IT department must become more than the go-to resource for troubleshooting and system maintenance. Instead, IT must become an integral part of your initiative before and after go-live.
These experts should be well versed in how your company plans to use technology to improve your offerings, solve problems, and deliver more value to end-users. This way they help champion the cultural shift and explain the business benefits that digital tools can offer.
3. Identify External Partners
Rarely does a company have enough internal resources to fully support an end-to-end digital transformation. Often, it’s advantageous to find support from external partners who are more skilled and experienced in this area.
For some, this means working directly with an independent ERP consultant, like Panorama. Regardless of who you work with, the goal is to find the guidance you need to develop a strategy and evaluate options.
4. Reengineer as Required
As you learn more about the different types of digital technologies available, you might find that your current best practices need a little tweaking. Don’t be afraid to reengineer even your most tried-and-true workflows to create faster, smoother, and more automated processes.
Many companies find that their processes that need to be reengineered before they automate them with machine learning or artificial intelligence.
5. Prepare Employees
Any time you make an organizational change, whether it’s an ERP implementation or a digital transformation, there is the potential for employee resistance. This is especially the case when you propose to digitize a process that employees have come to know like the back of their hand.
This is why a change management plan should be a pivotal part of your transformation. Change management is the process of looking at a company-wide change through the eyes of your employees. It means putting steps into place to mitigate pushback and encourage user confidence.
6. Re-skill on New Technologies
Helping your employees accept and embrace the change is only part of the battle. The other challenge is training them on the new tools.
Technology can only take your company so far. It must be in the hands of capable and willing individuals if you want it to move your business forward. End-user training is how you get there.
Avoiding Common Digital Transformation Mistakes
Despite their good intentions, many business leaders are coming up short in their efforts to digitally transform their business. More often than not, these pitfalls center on the non-technical aspects of the change.
From poor leadership and lackluster employee engagement to disconnects between IT leaders and other team members, digital transformation challenges are widespread.
These issues are more prevalent in companies that choose to transform their business all at once. A better approach is a phased approach where you roll out a few key functional areas at a time until everything is eventually operating on the new model. This helps you mitigate risk and minimize change resistance.
Is Your Company Ready to Embrace Digital Transformation?
Many top business leaders are still asking, “What is digital transformation?” That’s because the term is widely misunderstood.
With a clear definition, you can decide the right path forward for your company. If you decide digital transformation is the best course of action, you can then start focusing on the best practices mentioned above.
The result should be smarter, more automated processes that meet customer demands, ease the burden on employees, and drive long-term business growth.
Our team of enterprise software consultants is here to help you prepare your people and processes for your new digital strategy. Contact us below for a free consultation.