Digital Transformation: Going from Small Business to Big Business – by Tracy Vides
When you click a selfie in the middle of your morning jog on your iPhone, you seldom think of the company that made everyday photography possible: Kodak. Despite having invented the digital camera as far back as 1975, the 124-year-old company failed to capitalize on its head start and filed for bankruptcy in 2012.
If you operate an SMB or a startup, and even if your business is growing and successful at the moment, you don’t want to be a Borders when Amazon turns up or a Blockbuster when Netflix arrives on the scene (pun intended).
In the age of information, it is not enough to maintain status quo, or keep the trains running on time, so to speak. You need to be on your toes constantly and watch out for changing market conditions and consumer behavior, and proactively drive growth all the time.
How do you do that? By transforming the way you do business, digitally.
Gartner defines digital transformation as “the process of exploiting digital technologies and supporting capabilities to create a robust new digital business model.”
The benefits are potentially endless:
- The economic value of digital transformation for business and society as a whole is expected to reach $100 trillion by 2025. (Source: World Economic Forum)
- Companies that use a discontinuous approach to business model change achieve 2.25x the progress of typical firms. (Source: Gartner)
No surprise then, that digital transformation is the top strategic priority for top global executives surveyed by Forbes:
If it is good for them, it’s good for you. Here’s how to take your business on its own digital transformation journey with three simple steps.
1. Let Data Drive Your Decisions
Today, data is the difference between growth and stagnation. Traditionally, businesses have relied on marketing and the strength of their product or service to promote their brands and sell more. Now, with the complete shifting of marketing to digital channels and the amount of data generated by each business process, you have no choice but to use AI and machine learning if you want to stay competitive.
Which is why CEOs are increasingly convinced that repeated and sustainable value will only come from data and analytics. Gartner predicts that 90% of corporate strategies will explicitly mention information as a critical enterprise asset and analytics as an essential competency by 2022.
Know without doubt that data is at the center of the user-centric digital transformation that is happening across industries. It helps you understand what customers want – at this very moment – and how you can give it to them. It is key to measuring the success or failure of each of your operational processes and marketing campaigns.
Which brings us to…
2. Embrace Emerging Technology
Companies tend to differ wildly in their goals for digital transformation. Over 80% of respondents to a McKinsey survey said their transformation efforts involved multiple functions or business units. However, the study found that organizations that used and adopted more technologies were more successful in their business transformation!
This finding is certainly counterintuitive, given that deploying more technology makes transformation more complex. However, the easy and inexpensive availability of SaaS tools for marketing automation and even platforms to manage a cloud infrastructure has leveled the playing field for small businesses and given them the resources to take on enterprises much bigger than them. In fact, small businesses have a decisive advantage in implementing new technology and automating their workflows because of their size and flexibility.
If you can make data and technology work for you together, you have a clear winner on your hands. Predictive analytics algorithms – the superchild of analytics and AI – can augment and automate pretty much every function of your business, including demand planning, inventory management, product pricing, workforce management, supply chain optimization, and customer service. Use it to drive your sales forecasting, tweak your business models, and guide your strategic decisions.
A survey by IDG found that while 89% of organizations had plans to adopt a “digital-first” business strategy, a paltry 44% had actually done so. That’s a huge opportunity for you to steal a march on the competition!
A rhythmic march needs people working in tandem.
3. Involve Your People
“Give me a fulcrum and a place to stand, and I shall move the world,” declared Archimedes. The fulcrum is technology. Your company culture is the place where your employees stand when they move the world.
The McKinsey study referred to earlier also found that along with technology, redefining individuals’ roles to align with the transformation’s goals is a key driver of success in digital transformation.
You need to start at the top with strong, digital-savvy leaders who place customer value over hierarchy, who are willing to share control, and who are committed to the success of digital initiatives above all.
If you want your employees to rally around your vision, be radically transparent. The way things are done will change; that’s why it’s called a “transformation.” Share data with all teams so that there’s a common understanding of the transformation’s goals and progress towards them. Make sure every team member knows how their role will shift or if it will be eliminated altogether, and how they can deliver maximum value to the organization. Help them upskill along the way.
Empower every individual to take instantaneous decisions based on insights from the data they have on hand. Let it each team have a budget for experimentation, so that they can fail fast, adapt quickly, and keep moving towards the end goal.
A Journey of a Thousand Steps
Digital transformation often starts with simple objectives but the full implications can never be foreseen. There are umpteen milestones but rarely a peak. Constantly focus on the steps that make the maximum impact and rapidly discard those that slow things down. Ultimately, customers are the drivers of business, so make sure all of your digital initiatives converge on bettering the customer experience.