Investing in technology is not synonymous with digital transformation strategy. Virtually every company is pouring money into new tools, platforms, and services. Doing so is a matter of survival — today, most business processes rely on some technology to run efficiently.
But that doesn’t mean companies are moving to compete in a digital economy. With digital transformation, technology is driven by purpose, and that purpose is meant to reshape the way the business is thought, not just serve as a “backdrop” for it. So that you can understand better, below, we explain what strictly digital transformation is and the phases of transformation that a company goes through so that you can identify which one it is in. Prepared? Come on.
What Is Digital transformation?
Most companies try to adopt new technologies as soon as they become available. However, if it were just implementing and mapping the right technology, architecture, and services for your business, the transformation would be much easier to manage and accomplish. And in that way, truth be told, any company could successfully transform. Instead, technology has impacted markets, but it has also changed customers’ and employees’ behaviors, expectations, and digital journeys. The ultimate goal of digital transformation is to align the company with these changes.
The primary purpose of transformation (and the work associated with it) is not isolated to any group or business area; it’s company-wide. What was once isolated to the IT department is now distributed throughout the organization. The goal is to align guidance on how employees want to work, how customers want to buy, the products and services you develop, and the innovation that affects all of these. But how to get there?
What Is The Journey To Transformation Like?
Digital transformation is taking place everywhere, whether appreciated or not. However, the point we must understand is that this is happening asynchronously across the organization. And it often occurs without a conductor to orchestrate everything. This is similar to trying to build a futuristic city without a plan that understands who will live and work there and why. Beautiful buildings and homes can be made in isolation, but there would be no unified infrastructure to support the community.
Let’s be more clear. Digital transformation is significant and expensive. But it can and will cover everything from engaging customers and employees, forming new teams to collaborate, driving process improvements and innovation, optimizing business models, and inspiring new infrastructure. But this change is not immediate. Instead, it happens in a series of identifiable steps. Outlining the critical attributes of each stage helps companies chart their course toward desired benchmarks.
What Are The Stages Of Digital Transformation?
When organized into accessible steps, digital transformation offers a tangible strategy for understanding and incorporating change. In the process, companies innovate while making significant progress. But what are the phases of this journey, and how do you identify which company is in? Let’s get to it below:
Phase #1: Business As Usual
At this stage, organizations operate with a family legacy perspective. This means that they work with processes, metrics, and technologies that they inherited from previous business models and believe that these solutions remain the best way to achieve digital relevance.
Phase #2: Present And Active
Here, the organization starts to invest in isolated packages of technological experimentation. These are driving digital literacy and creativity, albeit disparately across the organization, to improve and expand specific touchpoints and processes.
Phase #3: Formalized
Experimentation becomes intentional while performing at more promising levels. Initiatives become bolder, and, as a result, change agents seek administrative support to invest in new resources and technology.
Phase #4: Strategic
Companies at this stage are becoming resilient. Efforts in digital transformation become intentional with short- and long-term goals and results supported by infrastructure investments. These efforts shift the traditional sales/marketing/commerce funnel approach to a more dynamic model that adapts to technology-driven changes in customer behavior.
Phase #5: Convergent
The company now has a dedicated digital transformation team to guide strategy and operations based on business goals and customer expectations. The organization’s new infrastructure takes shape as roles, knowledge, models, processes, and systems to support the transformation are solidified.
Phase #6: Innovative And Adaptable
Digital transformation becomes a form of business as executives and strategists recognize that change is constant. A new ecosystem is established to identify and act on technology and market trends. Yes, society is evolving & also customer and employee behavior is changing. Yes, companies are at risk of losing relevance if they do not compete for the future. But think about it. Change, as tricky as it is, can be a good thing. It inspires improvements in the way companies work, create and deliver value to employees and consumers.
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