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Digital technology is reshaping how we work, and many companies are pursuing large-scale change efforts to capture the benefits and stay ahead of the competition. On average 3.7% of an enterprise’s revenue is spent on digital transformation initiatives, according to the Digital Transformation (DX) Executive Sentiment Survey from IDC. As the COVID-19 pandemic unfolds, that percentage is expected to grow as more organizations lean on digital transformation investments to address the challenges of operating during the coronavirus crisis.
But what is digital transformation and how can businesses leverage it to evolve the way they work during this time of crisis? Let’s take a look.
Technology plays an important role in digital transformation, but it’s not the only factor. Digital transformation is about optimizing business models, processes, and functions driven by new revenue streams and customer expectations around products and services.
Speaking to CIO magazine, George Westerman, an MIT principal research scientist, described digital transformation as “…a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance.”
While digital transformation is guided by business strategy and goals, it also represents a cultural change that requires companies to disrupt, experiment, and challenge the ways they’ve always done things. This involves facilitating collaboration across teams and revolutionizing value delivery.
During this fluid and dynamic time, digital transformation is key to establishing competitive differentiation. It can increase business agility, improve worker productivity, enable automation, and improve business continuity. Most importantly, with many employees working from home or rotating in and out of the office, it can improve employee engagement and innovation and generate greater business value.
In order to embody the key tenets of digital organizations, businesses should lean on data and insights and use them to inform re-planning and re-forecasting exercises to pivot the company expeditiously and support or automate decisions that drive interactions with customers, employees, and partners.
Today’s businesses are more reliant on remote communication, which is aided by collaboration tools and cloud technologies to support remote workers and business agility. But with more devices accessing the network and the digital risk landscape increasing, secure connectivity and good cyber hygiene has never been more important. To support digital transformation, investments in cybersecurity and compliance are a priority to protect the corporate network from malware, data breaches, and other nefarious activities.
As mentioned, technology is a key part of digital transformation, but businesses should also look into the following process and business changes:
Companies should consider the goals of the business during this time, what value will be delivered, and how success will be measured.
Businesses must ensure that their customers are the driving force of any digital transformation initiatives. How will the customer experience be improved? How will value be added? Instead of thinking about how technology can make life easier for the organization itself, companies must put the customer at the center of all that they do. This means exhibiting empathy, establishing trusted relationships, and being deeply connected – especially during this unique time.
Communications should be clear, simple, and give customers the opportunity to connect and engage – when they are ready to do so. Brands should also communicate what they are doing to support their customers and maintain continuity of business.
To deliver value and put the customer experience at the center of all they do, companies must break down silos and create an organization that is unified around change. This starts from the top down by ensuring that executives and business leaders are on board with digital transformation.
To help executives feel confident that they have control over the transformation initiative, organizations should determine who is responsible for key tasks and projects. To coordinate the efforts of these autonomous teams, an accountability framework should also be established.
Automation is a key benefit of digital transformation, helping businesses realize efficiencies and free up employees to focus on more value-driven, strategic tasks. Identify processes that are manual or repetitive and look for opportunities to simplify or streamline them.
Given that a large part of the workforce is working remotely, businesses should evaluate and implement changes to ensure these workers have similar capabilities as they would in an on-site environment.
Create a secure virtual workplace where teams from across the company can share and inspire new ideas, discuss and overcome obstacles, reinforce a sense of belonging, and move things forward. Many remote collaboration tools offer virtual water cooler environments where remote teams can open lines of communication.
Digital transformation is a marathon, not a sprint. It’s about continually evolving and adopting new solutions as the needs of the customer and business change. Above all, lasting transformation puts the customer at the center of all the business does.
In this time of uncertainty, it may be tempting to put digital initiatives on the back burner. But digital transformation plays a key part in helping businesses survive the COVID-19 crisis and emerge in a better position. This period of great change will redefine the leaders and the laggards. Companies that invest in their digital strategy now, pacing short-term and long-term initiatives, will be in a more competitive place when the pandemic passes.
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