Countering the challenges of digital transformation for business success
What takes greater priority for modern business owners and the C-level executives? Matching the step with their current and future customer base and keeping tabs on their competitors. And why they need to be alert and focused on this subject? Because the world has changed, and technological advancements are continually disrupting the market. Technological changes to the legacy systems enable businesses to discover new and better ways of
- delivering value to their customers
- staying in sync with their respective market
- keeping a check on the competitive arena
- adapting to the dynamics of the market economics
I am not talking about something new here; technological advancements and market changes have been going on for quite some time. However, this time around, the pace is fuelled by the reality business owners worldwide faced, case-in-point; the COVID-19 pandemic.
You might be asking yourself,
- “Why is digital transformation so important?”
- “Why should I transform my entire business?”
- “isn’t it a costly affair?”
- “I don’t even have the budget or resource to take up something so big!”
There is still so much misconception around digital transformation that most C-level executives shoot down the idea or proposal for the same. So, before I take you further into this article, let me clear out a few things.
What is digital transformation?
Digital transformation is not a stoic approach and can be broken down or segregated into four types:
- Business process transformation
- Business model transformation
- Business domain transformation
- Cultural or organizational transformation
Often, business owners are focused on a business process or organizational transformation. When they miss out on the other forms of change, they leave much unrealized value on the table.
This multi-dimensional nature of digital transformation requires team play. This means every role in the organizational playbook needs to be in sync with the digital transformation process and strategy. Even though it is imperative for your organization to be innovative, agile, and digitally sound to match the competition, digital transformation does not necessarily start with organization transformation.
Let’s break down each type of transformation to help you understand the value your business can derive with complete digital transformation.
1. Process transformation
The business Process as a Service (BPaaS) market is poised to reach 68.76 billion USD by 2022 growing at a CAGR of 11.3% during the forecast period of 2015–2022. — MarketsAndMarkets
The factors that are driving this market to grow at a tremendous pace are
- The requirement of having better regulatory compliance
- Need for faster business agility
- A shorter product/service time-to-market
What is business process transformation?
Business process transformation involves a thorough change of business process elements for meeting new business goals centered around digital transformation implementation. Businesses generally adopt business process transformation when they decide upon drastically updating their existing processes. With the help of business process methodology, business owners can
- Modernize their processes
- Incorporate disruptive technologies
- Save operational costs
- Streamline their core systems
In a broader term, business process transformation is focused on fundamentally rethinking the business process. Here, business leaders give more focus to end-to-end alignment for changing their business’s functions, processes, organizational data, success metrics, and technological stack
This change is made following new strategic objectives and business market demands of delivering significant and increased customer value.
Yes, every idea in the business process redesign is disruptive to implement innovation with the application of
- New concepts
- Better capabilities
- Modern technologies
All this is done for evaluating the steps necessary for enhancing the outcome of business processes by streamlining the functions and business workflows.
2. Model transformation
Modern businesses pursue digital technologies for transforming their traditional business models. As shown in the previous section, process transformation focuses on finite areas of a business. In contrast, model transformation is aimed at delivering value in a particular sector or industry.
Be it Netflix (reinvented video distribution), Apple (changed music delivery and streaming experience), or Uber (revolutionized commute services industry), all are better examples of perfect business model transformation. Such innovations are now being witnessed in the insurance sector too. Insurance companies like Allstate and Metromile use data analytics for unraveling insurance contracts and charge their customers by the mile.
Insurance companies like Allstate and Metromile use data and analytics to un-bundle insurance contracts and charge customers by-the-mile — a wholesale change to the auto insurance business model. And though not yet a reality, there are numerous efforts underway to transform the business of mining to a wholly robotic exercise, where no humans travel below the surface.
Such opportunities require unity between the people involved in the decision-making process, and the business strategy units need to operate in sync with the business’s plan.
When businesses start changing their fundamental building blocks of value, they unlock substantial opportunities for future growth.
3. Domain transformation
Business owners and leaders rarely focus on this area, which in our view, holds a tremendous opportunity for growth. With disruptive technologies redefining the way products and services are created and catered to the users, the industry boundaries blur out while creating a new breed of non-traditional competitors. C-level executives must start seeing the opportunity to unlock modern technologies for their brands and start serving new markets.
Let’s take Amazon as an example here. The e-commerce giant entered a new market domain when it launched Amazon Web Services (AWS). It is now the largest cloud computing and infrastructure service provides. Do mind the fact that technology giants like Microsoft and IBM once ruled this particular domain.
So how did Amazon pull this off? It combined the already strong digital capabilities that it previously used for building storage and computing databases to support its traditional retail business. It also developed excellent partnerships with aspiring companies hungry for secure and faster growth by using advanced but budget-friendly computing services.
We want to add that Amazon Web Services is not just an adjacency or business extension for Amazon. Instead, it is a different business in a fundamentally different market space. This new business domain reflects nearly 60% of Amazon’s annual profit.
There is no such thing as a technological gap for new and upcoming businesses, and every business owner can now access and acquire new technologies and deploy the same for their growth in a cost-efficient manner.
Business owners can discover newer business domains by accessing new technologies such as
- artificial intelligence
- machine learning
- internet of things (IoT)
- augmented reality
- virtual reality
These technologies are not just supplied by traditional businesses like Microsoft or IBM but also from a growing startup ecosystem.
And it is not a hidden fact that the startup ecosystem is witnessing the most outstanding innovations. Startups and disruptive corporations that are leveraging this innovation efficiently are reaping the benefits of faster growth.
The key takeaway here for business leaders here is recognizing new domain opportunities afforded by disruptive and cos-efficient technologies. One crucial point that business owners need to keep in mind is that these opportunities involve re-defining business boundaries. Pursuing these opportunities mentioned above also includes having a sound business digital transformation strategy and the CEO’s involvement and guidance.
4. Organizational transformation
For seeing the digital transformation strategy to its fruition, business leaders must redefine
- organizational mindsets
- business processes
- talent and capabilities for the digital world
Modern businesses now realize the importance of agile workflows, regressive testing and learning, a decentralized decision-making approach, and better reliance on business ecosystems.
Business leaders are getting more actively involved in bringing the necessary change to their organizations. Take Experian, the consumer credit agency, for instance. They are the pristine example of companies that went through successful digital transformations. The consumer credit agency improved its organization with agile development and collaboration into its workflows. They are driving a fundamental company-wide shift in
Cultural/organizational change is a long-term requirement of digital transformation success and is a core factor in planning and executing business transformation initiatives.
Challenges of digital transformation
You read about the various steps required for digital transformation. Now let’s get familiar with the challenges and the best practices for countering them.
1. Lack of employee engagement and training
Gartner cites lack of skills as one of the top challenges that derail or cause the digital transformation to fail.
When we talk about adopting and implementing new technology or processes, it is essential to keep in mind that the learning curve is always steep. It becomes imperative for business leaders to understand the said technology and use the right tools for their organizational advantage.
When employees are suddenly rushed into something new, they are bound to push back. In addition to having proper knowledge of the technology and using the right tools, it is also crucial that your workforce gets adequate training on the new technology so that the strategies have a smooth implementation.
The recent COVID-19 pandemic rushed businesses to move their operations online, and around three-quarters of workers reported a lack of proper cybersecurity training.
2. Unplanned and often rushed testing
47% of companies cited testing as the number one cause for project delays.
When a company-wide change is decided, executives often rush into things, and this rush results in the overlook of proper testing. Business leaders tend to push specific projects forward under pressure of meeting deadlines. Such haste causes them to assume how systems will be used without even having the appropriate data to back them up.
3. Leaving the idea of organizational security on the table
EY research, only 36% of new technology-enabled business initiatives include cybersecurity teams from the start.
The majority of more significant projects have the sole focus of discussion, and that is the benefits or advantages. Built-in security is overlooked when a project implementation is being decided, which means new risks for the transformed business process.
Be it your plan to digitally transform your business or launching a new product or service in the market. Security consideration must always remain the focus for business leaders. That is why companies are bringing security in the DevOps stage because once the product is ready to market, adding the cybersecurity factor into the mix might become extremely inefficient, complicated, and expensive at the same time.
Best practices to follow for a successful digital transformation
Let us remind you that the challenges discussed above are generalized as they vary for different industries. Now that we have talked shed some light on the difficulties let us discuss the various ways we can counter them.
1. Start involving your employees and keep them engaged with digitization
What tangible benefits will a new transformative digital initiative bring to the table? How will your employees benefit in terms of saving them more time and resources to become more efficient? Employees are key factor businesses leaders to pull of any significant transformation. So why not make the employees a vital component of the entire process?
Provide more time on training the new technology employees, have a Q and A session for clearing their doubts, and provide an in-depth explanation of how these changes will influence their daily process. Help them realize how this transformation will make it more efficient to get their tasks done.
2. Battle test everything
When issues are discovered at an early stage, rectifying the same becomes more effortless. When you have established the expectations and identified the potential risks, testing the different case scenarios in the real-world setting becomes critical for your digital transformation plan.
Ensure that there is a feedback mechanism in place to evolve the system and make sure it meets the intended business requirements. It helps you to
- check for any implementation issues
- fine-tune processes
- gauge the set security standards
3. Keep security as the focal point of your digital transformation initiative
Keep a close eye on how your employees are adapting to the newly transformed digital business process. Get a detailed risk assessment done by keeping the critical stakeholders in the loop so that you can get a holistic view of the issue and make sure all the risks are checked
- simple human error
- skill gaps
- even malicious intent
As business leaders, you have to check that there is the right mix of security and usability. Employees must be trained for any new technology and should not feel burdened to use a complicated tool.
Equip your workforce and business process with the tools required for maintaining security standards, as this will help you create a more cyber-resilient organization. Make new data onboarding flexible and give your workers time to adapt to the changes that have occurred as an aftereffect of digital transformation.
Creating a digital transformation roadmap
125,000 enterprises expect revenue from their digital initiatives to increase by 80% by 2020 — Gartner
Be it modernizing your IT infrastructure, digitalizing your legacy systems, or implementing modern digital business processes, everything is about bringing digital transformation to your business process.
However, undergoing a digital transformation is much more than adopting new technology, investing in fancy tools, or upgrading current systems. It is about carrying out a planned disruption. You must create a sound digital transformation strategy as it helps get answers to these critical questions
- Where are you now?
- Where do you want to be?
- How are you going to get there?
You need these three competencies to wade safely through your plan of organizational digital disruption
- Informed decision-making
- Fast execution
Convert information locked in physical documents and make them digital
Use digitized information to work more simply and efficiently
Revisit everything, from internal systems to customer conversations, and understand the potential of the technology that you want to implement.
Conclusion: What is your end goal for digital transformation?
Digital transformation is more than just implementing the latest tools and technology for digitizing your operations. You must know which portion of your entire business process needs a revamp. Only then will you be able to reallocate resources and funds for transforming your business. Their goal for digital transformation needs to be rooted in delivering a unique and valuable experience to customers for any business. And they must be efficient with time, resources, and cost.
Rapidops is helping organizations disrupt their traditional business process with digital transformation. The company has enabled its clientele with the automation of delegation, discounting, and other functions, decreasing human interaction or dependency. Our clients now enjoy more integrated, automated, and digitized systems and processes to grow their business.
With Rapidops as your digital transformation consultant, you can experience flawless legacy migration and integration using the best technologies. Rapidops has helped their client get the best from seamless automation with digital innovation at the core of its development strategy.