Digital Business Transformation
We enable you to focus your whole value chain for the best customer experience and operational performance by:
Creating a continued set of positive experiences, resulting in sustained higher share of wallet and lifetime value, and positive influences on other customers
Creating next-generation commerce systems that deliver better multi-channel customer experiences through personalization, advanced selling and customer engagement techniques.
Translating your strategies into operational processes and information technology systems that optimize business performance, delivering excellence in sales processes.
Improving the performance of marketing operations by developing systems and operations that result in better customer acquisition/conversion and more efficient use of marketing spend techniques.
Changing the culture of IT organizations and their business counterparts, to develop capabilities and planning approaches to improve performance and become more nimble
Helping you to develop, test and scale new capabilities to deliver new revenue streams and defend against disruption
Digital transformation refers to the adoption of digital processes and tools to achieve strategic business goals. It’s a complex, multifaceted process that represents a massive cultural shift in the workplace and changes that affect every part of an organization.
Digital has transformed how we shop, listen to music, read the news, and make dentist appointments. So to keep up with customer expectations and competitors, businesses need to steadily evolve too. Yet according to technology media company IDG, 89% of companies plan to adopt a digital-first strategy, but only 44% of them have actually done it. If your business is among the 56% stuck on the planning (or pre-planning) phase, don’t worry, you’re not alone.
But what does “digital transformation” mean for your business?
How do you take that big, abstract concept and turn it into actions and strategies that will benefit your employees as well as your customers?
Here, we break down the concept into meaningful parts and provide concrete tips for how your business can begin to develop and implement an effective digital transformation strategy that encourages team members to contribute their best work and keeps customers happy.
Fundamentally, digital transformation is about changing how teams work together, not just what tech they’re using to get that work done.
What it means to be a digital business
When it comes to digital transformation, it’s tempting to fixate on the digital part—the platforms and processes—rather than the transformation part. The idea that you could just buy the right software and instantly increase productivity is appealing. But fundamentally, digital transformation is about changing how teams work together, not just what tech they’re using to get that work done.
While digital transformation looks different in every company, digital businesses share some fundamental characteristics:
Collaborative: Every member of the organization is meaningfully involved in achieving a shared vision. This means working together at different levels of the organization and across teams to build trust, promote transparency, and engage employees.
Cultural: Requires shifting away from traditional business structures and hierarchies and empowering employees to make decisions and contribute ideas.
Cloud-based: Cloud-based services are economical and agile, allowing businesses to choose the ones that meet their needs and streamline their IT and infrastructure costs.
Mobile: Customers expect ease and convenience from businesses, which means they need to be on mobile, where more than half of all web traffic is generated.
Innovative: Digital businesses are always experimenting and then learning from the outcomes to inform larger changes across the company.
Continuous: This isn’t a project with a start and end date. Technology will continue to evolve and call for adaptations to current processes, which means you need to keep learning and evolving.
Data-driven: This includes not only collecting and analyzing data about your customers but measuring what’s happening inside your company too.
Customer-centric: Ultimately, these shifts are all focused on providing better service and a better experience for your customers.
Notice that none of these is about what your company does; they’re about how you do things. A digital transformation doesn’t change the core values or offerings of your business. Instead, it’s about developing a connected workplace culture and acquiring the tools that will support your strategic goals.
For example, The New York Times uses data on audience engagement to generate internal alerts, letting staffers know when a story is performing well and merits a push notification. But the alerts don’t automate the process entirely; they generate important information that allows staff to communicate with one another about how to share the story with readers. Technology-enabled collaboration, not just data, was key to improving their processes and outcomes.
Why start a digital transformation now?
We hope you agree that digital transformation is inevitable and necessary, but you may not think it’s urgent. Maybe sales are strong, your customers are happy, your employees are productive, and now doesn’t seem like the time to embark on a resource-intensive project that will shake up your operations.
There are a few reasons to embrace the digital future sooner rather than later.
Engaged Employees. Disengaged employees cost the U.S. economy up to $605 billion each year. Digital businesses empower employees through transparency, learning opportunities, and open communication. By providing employees with data (something 90% of employees want, according to a recent survey in the MIT Sloan Management Review), businesses can track and improve their performance.
Increased Profits. Businesses can expect to grow revenues by 23% as a result of adopting digital strategies like using data to make smart decisions and training employees in emerging technologies. AT&T has accelerated its time-to-revenue by 32% through professional development initiatives that increase its employees’ digital skills.
Greater Resilience. New technologies will continue to shake up customer expectations and processes. A digital business builds resilience by replacing rigid structures and inflexible processes with a workplace culture and infrastructure that can respond and adapt to new demands.
Avoiding the Competency Trap. Many companies assume that their current success (and the methods that enable it) will continue indefinitely. Then they end up scrambling to adapt when it stops working. You’ll have to change eventually, and waiting until you have to means you’ll be making decisions for short-term survival rather than long-term growth.
Digital strategy in small companies and enterprise businesses
The challenges and opportunities of a digital shift are shaped by company size and structure. Enterprise businesses and established companies can tend to enforce rigid, formal hierarchies, which contribute to less collaboration and a slower pace of change.
That could be why only 38% of enterprise businesses have digital strategies, compared with 55% of startups. Digital transformation in enterprises may need to focus on breaking down silos, improving communication, and increasing transparency.
But big businesses have advantages too. A larger size (and budget) means they can dedicate significant resources to improving. For instance, when La-Z-Boy redesigned its headquarters, it used the opportunity to identify solutions to the company’s challenges. “We involved all our employees to think about what would go into this new building and how we could increase communication across the organization, provide more flexible ways of working, and develop more engaged and empowered employees,” said company president Kurt Darrow.
It’s not feasible for every company to build a brand-new headquarters, but many of La-Z-Boy’s solutions are scalable to other businesses, including reorganizing uniform desk layouts into versatile arrangements so that employees can choose an environment that suits their working style or collaboration needs.
Smaller businesses often have leaner structures and more fluid teams, which can help with collaboration and transparency. But they also have smaller operating budgets, which means they should focus their efforts on a single, specific goal that supports the overall strategy for the business, like improving customer experience or reducing operational costs through cloud services.
Molly Moon’s, a Seattle-area ice cream company, focused on improving communications among its team, which was spread across eight locations and fluctuated in size depending on the time of year. The company’s priorities were smooth onboarding for new and seasonal hires, streamlining communication channels so everyone could find the information they needed, and building collaboration and culture across a distributed group of employees. By shifting from group texts to an online collaboration platform, Molly Moon’s was able to organize conversations and information, support new employees to get up to speed quickly, and develop a team culture through fun, social channels like #moon-crew-pride. The result? A more integrated, efficient, and engaged team.
Your digital strategy will be informed by the unique strengths and challenges of your company, so take an inventory of them before developing your objectives and goals. Michael Gale, the founder of marketing data company Strategic Oxygen, said, “Basic awareness about those challenges is probably the key indication of how well the process will be successful.”
Leadership of digital transformation comes from the top—and everywhere else
To be a truly digital organization, transformation initiatives shouldn’t just come from the top down. Changes in customer expectations, and how the business responds to them, will affect the workloads and processes of employees, which means they have to be well positioned to identify risks, suggest solutions, and lead experiments. The Bring Your Own App trend demonstrates that employees are often a source of new ideas and tools that can ultimately benefit the entire company.
The title is less important than having senior leaders recognize the importance of an internal digital strategy and dedicating resources to unlocking more capabilities across teams within the company.
According to Janice Miller of Harvard Business Publishing, “When leadership development is factored in, organizations have a greater likelihood of a successful transformation.” And as MIT Sloan found, the most digitally mature companies are four times more likely to be developing digital leaders than the least mature ones.
Digital leaders need to create the conditions where employees are included as valued collaborators by giving employees the data and tools they need and building a culture in which teams feel safe and supported to speak up and drive change.
Planning and preparing teams for a successful digital shift
Regardless of the size or scale of your business, a digital transformation can be met with discomfort and uncertainty. As a leader, you can prepare for these challenges before you start rolling it out.
Provide the Vision. Your role as a leader is to stay focused on the goals of the company. Times of change cause stress and anxiety for everyone; reinforcing the mission and inspiring a sense of purpose can help employees stay motivated.
Create a Learning Culture. Nurturing the people inside your organization to learn and grow will support your transformation and keep employees engaged and committed. MIT Sloan found that while 90% of employees needed to upgrade their skills annually, only 34% felt their organizations supported their development.
Listen. Communication is key, but that doesn’t mean you should be doing all the talking. While leading a massive digital shift at legacy company the Yellow Pages, now known as YP, CEO David Krantz met face to face with employees across the country to hear what they were working on and what they were worried about.
Go Slow. Focus on testing small shifts in processes and culture that will eventually impact the entirety of your business. Proceeding cautiously will let you identify if a process that’s supposed to help employees is making their jobs harder or a strategy that looked promising is failing to deliver results.
There are no shortcuts to a digital transformation, but ultimately it will make your business more efficient, effective, and resilient.
And though it may feel like a race against your competitors, the fact is there is no finish line. The needs of your customers and how you meet them will change. Your mission is to build the capacity of your company to adapt and respond to a digital ecosystem that will continue to transform.
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6 Digital Trends to Accelerate Business Transformation in 2019 by DXC.TECHNOLOGY
1. Enterprises go after digital business moonshots
In 2019, more enterprises will make bet-the-company commitments to digital business. It’s becoming a new kind of corporate race as companies adopt these moonshot goals. Just as in the space race, we can expect to see a range of innovation, with new business models, new technologies and even entirely new businesses built from digital. But in following this digital trend, enterprises will have to beat back resistance from those following hybrid traditional digital strategies and internally competing business unit strategies — and unify the entire business around a common digital approach.
Advice: Focus on executing a single, well-defined digital strategy. Concentrate your talent, funding, operating model and executive attention on this. Make a major strategic bet, not a minor bet coupled with some hedge bets. Show the organization what it looks like to be different and what it feels like to be agile. A moonshot galvanizes people — everyone works toward it. Moonshot digital projects will attract the best minds. Get it right, learn fast, and execute forward.
A unified digital strategy between the business and IT is the only way to unload the compounding technical debt that is holding companies back from exploring moonshot digital initiatives. It’s all about focusing and accelerating digital transformation, having the stamina to succeed and achieving nonlinear growth
2. Enterprises adopt next-generation IoT platforms
As enterprises map their physical world to an intelligence-rich, digital world, smart “things” will become a driving force. In 2019, enterprises will start to implement next-generation platforms that can analyze large quantities of industry-specific data from the internet of things (IoT) and use artificial intelligence (AI) and machine learning (ML) to find novel correlations between data previously thought to be independent. This advance will enable enterprises to make new discoveries.
This digital trend is particularly exciting. Without these platforms, humans would be unable to make these hyper-dimensional correlations; there are simply too many factors for the human brain to consider. Further, the discoveries from these new correlations may surprise us and conflict with conventional wisdom. We must learn anew.
For example, precision medicine integrates data from new sources (such as WiFi-connected heart monitors, fitness watches, location data or the human genome) with traditional sources (such as blood chemistry or dietary information). Working with these multiple data inputs and their correlations will result in more precise diagnoses and treatment plans.
Autonomous driving demonstrates the importance of real-time IoT data pipelines through analytics and into improved execution. Data from the car must be constantly analyzed in real time, at the source, to execute on an event. Should a race car make a pit stop? Data from the car informs that decision, so the analytics must be done at the racetrack in near-real time. The data can also be sent to headquarters for processing with other data to better understand a particular event.
Having the right IoT platform to analyze the data at both the edge and the core will enable enterprises to make the most of IoT by discovering new hyperdimensional correlations in the data, leading to fresh insights, enhanced decision making and better business outcomes.
3. Action at the edge disrupts the cloud
As the race car example illustrates, in 2019 more apps and data will move to the edge, potentially disrupting the cloud model. As technology becomes embedded in everything everywhere, and data grows to an estimated 163 zettabytes by 2025, enterprises will manage apps and data differently.
The IT industry continues to build out what we call “the Matrix,” the pervasive, intelligent IT infrastructure that goes beyond cloud to include edge computing, IoT platforms, machine intelligence, augmented reality/virtual reality, block-chain and more. But the latest digital trend is that companies are building completely new ways for us to leverage the Matrix, including decentralized applications (DApps). DApps are a potential disruption to the cloud model because they shift power from a small number of central players to a large number of participants.
Data "gravity" becomes a primary design principle for new multi-latency systems. Context is most frequently local, and the ability to maximize the value of reaction time is local as well. Data gravity draws data together locally, and with the increased size of data graphs, so too come the analytics. As these analytics begin to drive intelligent actions, more data and actors are drawn into the local orbit.
This brings us back to the Matrix. The goal is to put that intelligence — and us — ever closer to the data. Therefore, we are seeing shifts toward event-driven applications and server-less architectures that allow very small, very specific applications to run in lightweight environments that could be as close as the device in your pocket, on your wrist, embedded in your arm, retrofitted to your desk or outside your house on a pylon. And yes, 5G wireless will change the data accumulation patterns in disruptive ways.
4. Enterprises enter an age of Information Enlightenment
Given the tremendous volumes of data (digital trend three), and data’s high dimensional (digital trend two), enterprises must react faster and faster to the data, especially since its value decays over time. The value may be highest at the moment the data is created (e.g., as the race car goes around the track) but much lower only seconds or minutes later (e.g., when a tire has blown before a pit stop has been made). And that data may have different values depending on the context.
So, in 2019, leveraging information will become a core competency. In this age of Information Enlightenment, companies will understand their information ecosystems better and know what to do to make better, faster, data-driven decisions. ML tools will be key for training systems and speeding response times. Enterprises will realize it’s sometimes better to take action based on a strong probability of being right (e.g., 70 percent) than to hold out for being perfect (100 percent). That means paying attention to how ML rules are built.
AI will come of age as it gets baked into applications. Whereas ML produces a result based on historical data it has learned from, AI can provide an intelligent response. ML might tell you that Sue typically takes three days to review a report, whereas AI might send a report to Sue’s assistant because Sue is traveling and it will likely take her six days to review the report. AI takes what ML “knows,” factors in other information and exhibits intelligent behaviors.
Companies that experience the Information Enlightenment will realize that AI and ML can improve service offerings and generate new sources of revenue, but only with the right algorithms, model orchestration, data and infrastructure. This digital trend will elevate metrics such as lift, root mean squared error and information gain from obscure data science concepts to key business metrics.
5. Enterprises redesign customer experiences amid stronger data privacy rules
In 2019, protecting customers’ personal data will force companies to rethink their digital strategies, as the full effects of the European Union’s General Data Protection Regulation(GDPR) set in. Failure to comply with GDPR will thwart an enterprise’s ability to conduct business globally. Innovative companies will see this digital trend as an opportunity to deliver better customer experiences and build customer trust and loyalty.
To this end, enterprises must have a clear strategy for managing customer data and processes. These run the gamut from customer service, sales and marketing to transaction processing and product research and development. Enterprises will need to consider new ways to attract customers and generate revenue. They will have to consider changes across their data landscapes, especially in marketing databases, demand generation systems and customer relationship management systems.
Enterprises will also re-imagine their broader information ecosystems with partners and suppliers, where data privacy rules have a ripple effect and potentially limit the value of other data in the ecosystem. They will examine data integration capabilities, quality, governance and security. They will create privacy-centric information ecosystems, with analytics and security as the foundation, as they aim to deliver secure interactions and superior customer experiences.
6. Enterprises begin closing their data centers
The enterprise data center is fading away. In 2019 we expect to see a noticeable shift of enterprise data center workloads to multi-tenant data centers in the public cloud. Two forces are at play in this digital trend: Information processing is becoming a utility, and customers (and their data) are widely distributed. To operate more efficiently and derive more value from their data, enterprises are shifting to public cloud providers, who have massive bandwidth and strategically placed data centers. Think of it as value shifting from single houses to apartment complexes.
In effect, enterprise data centers will become virtual compartments in various multi-tenant public clouds and thus will be shut down except for their mainframe workloads. The mainframe workloads will migrate to specialized data centers that are heavily leveraged until they, too, eventually go away. We will see a lot of “lift and shift” in 2019, but the trend will play out over the next three to five years as cloud migration gives way to “built for cloud” replacements.
The decisions companies make in 2019 will determine how they fare in our evolving digital world. Taking these six digital trends into account will help to ensure that their digital transformation journeys continue to be successful.