Often driven by changing customer expectations, digital transformation involves re-evaluating how an organization utilizes technology, people, and processes to achieve business goals and keep customers happy. It can also lead to new business models and revenue streams for companies.
Typically, the process of digital transformation is initiated by the CEO and led, in partnership, with CIOs and other senior leaders. It requires collaboration across departments to align business objectives and application development models.
Customer-Facing Digital Transformation
Digital adoption and innovation are driven by customer experience. Customers want faster, more responsive, and increasingly interactive experiences, but they also want accessibility and availability. Digital transformation helps your organization provide a consistent, efficient, consumer-centered experience throughout the customer journey.
Example: A clothing company with in-store and online shopping has customers that want a better digital experience. The company could transform its backend to be more accurate in terms of inventory. This would unite both the brick-and-mortar and online stores to offer a seamless experience.
Revamping of Legacy Apps
Legacy systems only get more time-consuming and costly as they age. With all this time and money spent on maintaining legacy apps, companies can find it difficult to fully embrace digital transformation.
Digital transformation also means leveraging the best technology for your business and customers, whereas legacy solutions generally aren’t as flexible or agile as modern solutions.
It’s necessary during digital transformation to address legacy systems, upgrading them and dropping the dated languages, databases, and architecture. In order to evolve at the modern digital pace, companies must increase efficiency with technology wherever possible. This could mean adopting agile principles and automation technologies.
Digital Adoption Solutions
In May 2019, Gartner coined the term Digital Adoption Solutions (DAS). These tools help companies adopt digital solutions. DAS began as point-solutions, with pop-up bubbles offering basic engagement elements to guide users through websites and new software.
Today, though, DAS have evolved. WalkMe developed a DAP—Digital Adoption Platform—to help users adopt, learn, and truly understand new digital tools. DAPs like WalkMe’s have expanded to analyze and comprehend the user experience across multiple devices (mobile, desktop, web) in order to guide and engage users, automate workflows, and ultimately empower employees and customers alike.
Overall, a DAP can help streamline and simplify the evolution process, taking businesses through their digital transformation journeys with ease and precision.
Digital Transformation vs. Digitalization vs. Digitization
Consider the differences between digital transformation, digitization, and digitalization:
Digitization – moving from analog to digital. Remember when records were written and kept on paper? Collecting data meant handling physical documents, like papers and binders—analog. When computers became mainstream, businesses converted their records to digital computer files. This process of converting information from analog to digital is called digitization.
Digitalization – simplifying work by using digital data. Digitalization marked the move away from using digitized files in an analog way. It involves making simpler, more efficient workflows using digitized information. It’s not about changing how business is done or creating new business. Digitalization allows businesses to operate faster, accessing data instantly, rather than searching through filing cabinets.
Digital transformation – adding value to customer interactions. Digital transformation does involve changing how business is done, and sometimes even leads to entirely new classes of business. Through this process, companies can take a step back and rethink how they operate. The goal being to perform better, more efficiently. Digital transformation can also lead to increased customer satisfaction and more personalization.
Successful Examples of Digital Transformation
Comcast
Comcast innovated new products, including voice-activated controls and a cloud-based video platform for watching TV. However, this didn’t result in the boost in customer satisfaction they expected. So, the $84-billion U.S media and communications company reorganized, putting product innovation and customer experience together. With this transformation, the company was able to create a very personalized experience that uses machine learning to recommend content. Additionally, Comcast tracked the impact of their offerings through IT investments, customer care, technology usage, and accounting to ensure a smooth, cost-effective customer experience.
This example shows how basing digital transformation on the customer lets companies understand and address all their touchpoints and how they interact with their audiences—from marketing campaigns they see, to the sales personnel and processes they encounter, and to where they first connect with a company.
Netflix
Where Blockbuster went wrong, Netflix went right. Netflix based their digital transformation strategy on the customer, and now they’re hugely successful while Blockbuster is no more. Netflix began with the customer experience, deploying an online recommendation engine to help customers find shows they like based on their interests and tastes. It also let customers know which videos were out of stock—meaning they could avoid going to video rental stores altogether. Blockbuster tried to protect its bottom line with tactics like late fees, which garnered hostility and were disliked by customers.
Nike
When Nike felt they were getting a bit dated and sluggish, they underwent a digital transformation. Nike transformed the company’s mindset, supply chain, and brand to better connect with its customers. They focused more on data analytics, updated their e-commerce strategy, developed stronger digital marketing campaigns, and amped their direct-to-customer sales. Nike was able to open concept stores, create more membership opportunities, and improve the online customer experience by using digital consumer data more effectively
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