A digital transformation will look different for every company and for each industry. However, broadly speaking, it describes the integration of digital technology into each area of the business. It results in core changes to how a business operates and delivers its products or services to customers by taking advantage of technological advancements.
Within a company itself, it requires a cultural shift in how processes are completed. Employees have to become accustomed to experimenting regularly with their processes and even sometimes fail in their efforts to innovate. Businesses might find that they must sometimes step away from the old processes that they knew worked well, in favor of experimenting with innovative solutions that have not had the same extensive testing.
It is only by adopting these best practices and fully integrating the employees into the mindset of digital innovation that brands can remain at the forefront of their industries and continue to serve customers with the care that they have come to expect.
What are the 4 main types of digital transformation?
Business process
The business process part of the transformation refers to how your company functions internally. It looks at how your people respond to the available technology and put it to use in their own work. It includes processes such as incorporating a greater amount of analytics collection and analysis into business decisions to help the company maximize its marketing investments or plan its research and development. It can also mean incorporating automation into internal processes.
Digital transformation in this area looks at ways to help the organization improve its functions. It might do this by decreasing the costs associated with certain processes, decreasing the time-to-market, or it might increase the quality of the product offered, for example. All of these ways would help to increase the value of the brand’s processes through digital technology.
Business model
Digital transformation of the business model requires a careful examination of how businesses within the sector are set up at their core. Transformation here has the potential to cause serious disruption in the industry and power success when done well. An excellent real-life example would be Netflix, which transitioned its movie-watching services away from mail-in DVDs to a streaming service that has had reverberations felt by all the major movie and television producers.
These types of transformations often work hand-in-hand with the strategic parts of the business, using their eye for innovation and forward-thinking to look at the business potential beyond the established means within the industry.
Domain
Domain transformation refers to the growing capacity of brands undergoing a transformation to think about markets and potential beyond their traditional boundaries. Consider how Amazon, the online retailer, managed to launch Amazon Web Services, which now functions as one of the largest cloud computing and infrastructure services. In other words, they were able to step far beyond the former sector of retail and embrace an entirely new technological potential. Technology offers brands significantly more capabilities to step into new sectors. Many of these opportunities come from emerging technology such as artificial intelligence and machine learning.
Cultural
The cultural component of the digital transformation requires buy-in from the people on the ground, doing the daily work involved in completing the digital transformation and then engaging with the technology. It can be a challenge for many organizations to make this transformation, as they have to educate their employees and help everyone see the potential for this technology to build the business and better engage the world around them.
Succeeding in building a technologically-focused organization, however, will empower the company to continue to grow. Technology, including its regular updates and innovation, requires a workforce that can easily adapt to changes and people who embrace a culture of continuous education. These traits within the organization will help the brand create positive customer experiences, as the company will be able to adapt its practices and incorporate technology to deliver a personalized experience the customer wants.