Digitally Transformed Yet?
- Digital Transformation, Automation, Digitisation
For more than a decade, "digital transformation" and similar terms have been talked about a lot, but it seems like it is "no longer trending". Companies all over the world have since moved on to AI, machine learning, Web 3.0 and other buzzwords.
COVID-19 has forced organisations around the world to adopt more tech to ensure connectivity and productivity, so remote working and collaboration may allow their workforce to continue their work. In a survey by BCG, tech adoption helped 80% of companies survive the pandemic. However, digital transformation should not only be responsive, but should also be proactive. Today, plenty of companies, and even government agencies are not digitally efficient. Of course, some may argue that every organisation has a different definition of digital transformation, or suited to adopt technology at a different pace, but are organisations jumping the gun by leaping into the newer and more complex technologies?
Types of Digital Transformation
There are different forms and phases of digital transformation. There is no one-size-fits-all solution. This can be due to many factors - size of workforce, customer profiles, business model, industry - to name a few.
With that said, there are a few main types of transformation that apply to most, if not all organisations.
Business model. This refers to how businesses provide value to their customers. One of the best examples for business model transformation is a major household name, Netflix. The company went from physical DVD subscriptions to online streaming, at a perfect time when internet was becoming more mainstream and internet speeds were picking up. Netflix became a $100 billion company while their then-competitor Blockbuster went bust.
Business process. This usually refers to internal processes that will result in increased productivity of workforce, lowered costs and time of creating goods and services, and reduced cycle times. Tesla is considered one of the best companies in the world when comes to business processes, in their case, industrial digital transformation. Tesla's use of AI for automation, robots, and large scale die casting, have allowed them to overtake the biggest auto manufacturers in speed of production.
Customer reach. This refers to the way businesses can reach a wider customer base, by expanding the way value is delivered. For a long time, IKEA is seen as a physical go-to store for home furnishings - nothing fancy, just affordable DIY furnitures. In 2017, IKEA launched their AR (augmented reality) app that allowed their users to visualise how the furniture would look in their own home. This allowed IKEA to reach new customers, and for existing customers to enjoy a different experience of shopping.
Timing Is Important, But Not Everything
In the beginning, companies that moved from fax machines to email considered themselves digitally transformed. Before the dot com boom, companies who had an online presence with a simple website were considered early movers, and in the past decade, companies moved into the mobile sphere. There are some moves to digitise that are a necessity based on timing, but decision makers should understand that effectiveness, need, and usefulness are even more important. Decisions should be made based on business needs, instead of keeping up with the trend.
For example, after learning of the wide usage of Alipay in China and Square in the States, thousands of companies wanted their own mobile wallets. Within a couple of years, the number of digital wallets in the app stores blew up. But think about how many (or few) really thrived. There were independent tech startups, banks, retail, transportation, and a bunch of other industries that tried taking a slice of this pie. The only ones left today are the ones that are providing value because there is a need they're addressing.
It Doesn't End
Digital transformation should be an ongoing process in every organisation. Fresh business needs may be solved with the introduction of tech, or new technologies may shake up an entire industry. As each organisation grows, it must continue to find better ways to engage its customers - both internal and external.