Digitization of Business: What Is This Digital Transformation?
Since the 1990s, businesses have been going digital, but only some at a time. Digital transformation has been happening for 30 years, encompassing everything from scanning documents to AI and the cloud, so it's no wonder that the definition has become muddled. Today, most businesses operate in a hybrid state of digital and analog, but what digital transformation means from one CIO to the next varies wildly. Digital transformation of your business means going paperless for some and artificial intelligence for others. It can be basic, advanced, or a simple matter of catching up with industry standards.
Digital transformation, at its core, is how your company advances to meet the evolving digital needs of your clients, your business partners, and your employees. Digital transformation is a method to stay competitive, streamline operations, and use the best tools on the market available to your team.
Digital transformation can mean the transition from analog to digital, but today, it can also mean transitioning from 20-year-old technology to newer platforms and cloud-based solutions. However, the best path to digitizing your business is sometimes unclear. The right tools, integration, and approach to digital operation depend on many factors. Your business industry, size, and where your process is behind the curve all play a role.
Today, we spotlight the importance of digitization in business - and what digital transformation is.
What Is Digital Transformation?
From Analog to Digital
Digital transformation is defined as turning manual processes or resources into digital evolution. At first, this was extremely simple. Scanning documents and shifting to excel instead of hand calculating seemed obvious. Even today, legacy offices send out mailers and return envelopes instead of PDFs and email, which became standard digital operations in the early 2000s.
Keeping Up With Industry Tech Standards
Over time, however, digital transformation has become a far more advanced and wide-sweeping concept. It has come to represent the effort of staying competitive and keeping up with the technological advancements in your industry. If your competitors offer virtual estimates and live chat support while you are still scheduling phone calls, this is a form of digital transformation to take place, but not the only kind.
Digital transformation is also the process of upgrading old computer and software systems for the latest tools available to your team and meeting the digital needs of your customers, partners, and employees. As the population evolves with the flow of technology, companies using legacy systems always risk being left behind.
Automation and Talent Scarcity
Lastly, digital transformation is a way to overcome talent shortages through optimized operations and task automation. In a talent shortage that has lasted for years, thinking of the future means planning for
A Digitally Transforming Perspective
Ultimately, digital transformation is a new way to examine your business, operations, tools, and resources. When planning to transform digitally, you are looking for ways to improve your current processes. Instead of being satisfied with the status quo, it's time to identify your bottlenecks and pain points.
Digital transformation is an opportunity to make positive changes and rebuild your entire structure with the latest digital resources. For example, a company going through a digital transformation often goes through a work culture shift where the company becomes aware of its operational weaknesses and seeks digital solutions.
This inward look at your operations often supplies the motivational "Why" of any digital transformation.
Digital Transformation Has a Motivational "Why"
There is always a reason why a company chooses to go through the arduous but necessary digital transformation process. Determine your cause or reasons, and you can better direct your overall digital transformation plans. CIOs can use this "why" as a leading goal to direct, focus, and stage the digital transformation process. By seeking to meet goals that require a digital operation, you can keep your objectives in view and prioritize the transformative steps that will grant the most benefit.
Why Digital Transformation for Business is Important
Why is digital transformation important? In any given year (except 2020), businesses have had the option to lag and keep doing things the way they have always been. Ask customers to change their account information through the mail and see how quickly they switch providers. Of course, this method can only last for a while. Even the recent Windows 7 abandonment debacle proved that one digital upgrade is not the end. And, of course, the pandemic forcibly spotlighted just how many workplaces were - in fact - fully capable of going digital in a matter of weeks, sometimes days, when the need arose.
Let's look at the leading reasons why digital transformation becomes important to businesses, becoming their motivational "Why."
Streamline Internal Operations
The primary reason for digital transformation, which the IT industry has been pitching for years, is that it's more streamlined. You’re able to save time, money, and human work hours. Modern enterprise software has an incredible range of tools and dashboards designed to make the typical routine aspects of business faster, easier, and more accessible. If you still need to, say goodbye to filing cabinets and triplicate. If your office is working on one or two ancient pieces of software or entering data by hand, it's time to discover an integrated EMS (enterprise management software) platform.
Every level of digital transformation has the potential to streamline some aspect - or most aspects - of your business. The exact transformation steps will depend on your industry and the latest software designed for your needs.
Meet Customer Expectations
Online payments
Digital account management
Mobile app features
Modern consumers live on their smartphones. They are more than digital natives; they live in a world of apps, chat, and social media. Managing accounts online is not a bonus; it's a necessity.
These features have phased from the hot new thing to the expected norm in the last ten years. Suppose your business does not offer online account management or live chat support. In that case, your brand is now markedly behind the curve, and new leads are more likely to choose brands with a more striking digital presence and more convenient digital experiences.
Go Paperless and Meet Environmental Goals
Many businesses, along with local initiatives and industry trends, are going green to please eco-friendly clients. If your office is still paper-heavy, going paperless has never been easier. In an era when you can scan your documents using a phone app and built-in PDF reader, you can impress your clients and take advantage of the tools available to ditch the filing cabinets and office printers quickly.
Create a Secure Remote and Hybrid Work Structure
While millions of businesses rapidly went remote during and after the pandemic, many would also be the first to admit that the process was slap-dash at best. Many stop-gap measures and consumer-grade products filled the emergency gap, but a good CIO would prefer a different way.
Now is the time to reorganize your hybrid and remote work systems into the secure, complete remote system you've considered since the initial work policy transition. Many cloud-based resources and platforms are run by providers invested in business-class security and integrity. You can now build a secure hybrid network with the right approach to protected assets, resource management, security, and IT oversight.
Reach Marketing and Conversion Potential
In the modern consumer landscape, you are missing out on your fair market share if you're not fully embracing digital marketing, landing pages, and website development. It is common to pursue marketing-motivated digital transformation first, which may reveal how great modern tools are and inspire other departments to seek the cloud-based dashboard upgrade.
Maintain a Competitive Edge
One may not fix what isn't broken, but maintaining a competitive edge in your industry is always a worthy motivation. If your competitors are getting ahead using digital tools, dashboards, and platforms, then your team has every reason to do the same. When competition is your driving motivation, other brands often inspire you to discover even better tools and use cutting-edge techniques to regain an edge on your niche, industry, or market.
Keep Abreast of Your Digitizing Business Network
Business partners also have a way of motivating some companies to embrace digitalization trends. Let's say your vendors want to be paid by an electronic means that is new to your business. Manufacturing and logistics companies are now leaning toward integrated operations and dashboard apps. You can lose vendors and suppliers simply by having technology too old to interface with their current operations.
Automate to Operate With a Smaller Staff
There has been a massive shortage of talent that began even before the pandemic. Today, businesses face the stark reality that the workforce is nearly 100% utilized, and there just needs to be more professionals to fill all the roles. So it's time to automate. Of course, you may have to transition many of your operations into a digital context before automation becomes possible.
The Primary Challenges of Digital Transformation
Now, let's examine why many companies delay digital transformation, even when they can see the clear benefits and profitable improvements that could be made in just a few weeks or months of transition. Digital transformation challenges each need to be planned for and overcome.
The Time Investment
There's no hiding that digital transformations take time. Transforming technology and processes into a new platform, system, network, or tech stack is time-consuming. Many companies need to bring in an outside IT team to accomplish the feat and continue business as usual until they are ready to fully shift company operations to the digital framework.
It takes time to scan your documents, rebuild your digital infrastructure, and integrate all your existing data into the digital environment. From there, it takes time to learn the new system, market the upgrade to your clients and business partners, and train your team to use the latest technology. But once all that is done, you will see the streamlined results.
Overhauling the Existing System
One of the biggest hurdles in digital transformation is overhauling the system you have been using. Whether this has been paperwork or swivel-chair software use on legacy systems, rebuilding a new system for greater digital capabilities is a huge task. This is something your on-staff IT may need to prepare to take on - another reason the project gets put off for so long.
In fact, companies can generate technical debt by delaying digital transformation at the right times.
Full-Stack Integration
What if you have a pretty good digital stack, but parts of your operation still need to be upgraded? In this case, you will need to worry about the challenge of full-stack integration. Once you change a significant portion of your infrastructure, each additional piece of technology in your stack may need to be adapted or tweaked. Hence, the entire structure hums as one secure, efficient business network.
Retraining the Team on New Tools
Retraining also takes time, but not always as much as you fear. Most of your employees will likely be on-kilter with modern customers - digital natives familiar with phones and popular apps. Suppose you upgrade from an older legacy system to a newer, more intuitive software platform. In that case, you will need to retrain everyone - but your team has the potential to pick up the skills quickly based on their general familiarity with cloud, app, and platform technology.
Cybersecurity Considerations
Lastly, remember cybersecurity. Digital transformation is as much about security as it can be about convenience. The more you digitize, the more you will need to defend the information you store using encryption, login protection, and trustworthy partners. If you work with a third party, ensure they are reputable and have equally high cybersecurity standards as your business. Because if your cloud or platform provider gets hacked, so do their clients.
The Layers of Digital Transformation in Business
We have mentioned a few times that digital transformation can be applied at different layers of digitalization. While digital transformations may have started with document scanning, the term is now widely used to indicate any significant digital upgrade a company needs when its technology or methods have become outdated. This is also because each new layer of digital transformation typically involves digitizing even more of the analog or human elements of your business operations.
Let's take a tour of the eight current layers of digital transformation.
Document Digitalization: The Original Digital Transformation
The first step of digital transformation, the original, is document digitalization. Businesses have been on this path for 30 years, since the 1990s when online paperwork became an office-changing thing. PDF viewers and readers have advanced so far since that time that document digitalization can be as easy as stacking your paper next to a table of interns who take photos of each page with their phones, one by one.
The phones are loaded with PDF readers, and each document is automatically read as it is entered. An attentive team can scan documents into the correct digital folder and authorization structure, saving hours of file sorting after digitalization.
Digital Optimization: EMS and Industry-Specific Software
Enterprise management software has transformed the business world, offering a full-scale set of tools designed to handle business essentials. This includes payroll, inventory, time clocks, facility management, HR services, scheduling, and regulatory compliance. With these tools all rolled into a single platform, you can eliminate data silos, get all your teams working on identical synced information, and enjoy the latest dashboard management tools for each essential aspect of your business.
You can also choose software designed to help your sector, industry, or niche. There is software for delivery routes, home inspections, event planning, restaurant management, etc. Choose one or several that suit your business's unique needs to discover the latest tools they have to streamline your team.
Digital Marketing: Outreach and Buyer Journeys
There's no denying the importance of digital marketing. Any business that still needs to start using trackable advertising links, social media marketing, and on-page analytics is a decade behind the curve. Today, your fair market share depends on getting out there online. Your brand should be honing your on-site customer journeys to maximize your growing digital presence on social media, Google searches, and online marketplaces.
The key to transforming a modern lead into a buyer is an engaging and smooth online experience on your website. This is often followed by engaging through your app, and sometimes new buyers will also connect to your social media accounts. Why leave your market share on the table when a little standard digital transformation can reclaim your rightful online prominence in your industry?
Field Digital: Digital and Mobile Operations in the Field
Does your team conduct field service operations like home inspections and repairs? Field services and field operations have been transformed by digital transformation. Technicians who carried clipboards are now tapping their results into tablets. Teams running late can optimize their routes with dispatch and a live GPS overwatch map.
Field technicians know that the quality of their tools can define the quality of their service. Your digital transformation can allow your team to go out with tablets instead of paperwork, send real-time information and get accurate computer-generated estimates for the client, and take pictures and videos of a system that needs repairing for expedience.
Digital Business: Taking Business Dealings Virtual
B2B communication has remained traditional for the longest period, but it's time for that to change. In the past, B2B dealings supported each other by keeping old invoicing forms, sending physical letters, and using legacy systems. However, there is always time to update -especially if your business partners do the same.
Taking your business dealings virtual can mean choosing a virtual wallet to use for invoices or switching to a faster-paced platform for communication. What your partners appreciate, however, is online selection, order tracking, and account management features that do not require a special sit-down with their contact to make a few small changes.
Digital Standards: Providing a High-Tech Customer Experience
We mentioned earlier that customers today expect a high-tech experience when dealing with modern brands. Rather than struggling to keep up with customer expectations, the goal in your digital transformation is to exceed them - and get ahead, so you have some space before the next wave of must-have digital upgrades.
Customers today expect the basic features of eCommerce as a minimum. Customers want to access your features in an app, pay online using a credit card or payment app without extra steps, and get customer service if they send a complaint to your Facebook page. They, too, want to manage their accounts online, enjoy detailed order tracking, and want to avoid requesting a demo for everything cool. While together, these can be a big ask; it's also the best way to stay competitive and maintain your market share of engaged modern consumers.
Digital Cloud: Taking Your Business to the Cloud
Once your business operates with the latest enterprise software and industry tools and reaches your customer-facing technological expectations, the next step is to take your business to the cloud.
Cloud migration became the new layer of digital transformation just a few years ago. It took center stage during the pandemic lockdowns when cloud-based business networks and resources became the only ones available. Taking your business to the cloud can mean that anyone can work remotely, that business trips are no longer isolating, and that you can change offices anytime without interruption.
Suppose your cloud migration has been partly due to the pandemic rush. In that case, your digital transformation process should involve building a more structured cloud migration and ensuring all your cybersecurity matters are considered.
Digital Automation: The Potential for Automation After Digital Transformation
Lastly, the potential for automation when your business digitizes is astronomical. Digital transformation must include what AI and the latest automation algorithms bring to the table. Except, of course, upgrading to AI and the latest algorithms have become the latest stage of your business digital transformation journey.
In a world where almost every team is short-staffed, and insights are at a premium, it's no surprise that AI automation is a popular choice for cutting-edge business upgrades. Automation starts with scheduling tools for email marketing and social media posts. Still, soon you will have AIs analyzing massive data archives, finding improvements, and reducing your total need for staff.
What Is Digital Transformation and When Should You Start?
Digital transformation is upgrading your business technology to the best tools in your industry to meet the latest market needs. Whether you are going paperless or headed to the cloud, Mach One Digital is ready to become your go-to digital transformation team. Let us build your business an all-new technical stack and handle the transition while your team holds down the fort for daily operations.