Digital transformation is one of the key buzz phrases of 2016. Over the last two years, searches for the phrase have surged. Businesses are starting to embrace a shift to digital working, and the most forward-thinking are reaping rewards. Customers are more engaged, and new technologies make staff more productive than ever.
But for some businesses, transformation still seems like an abstract concept. These businesses resist change in favour of the status quo that has worked perfectly well in the past. In many cases, pockets of cultural resistance are enough to stifle progress. There’s a limit to how long legacy processes will hold their own.
As such, organisations are beginning to fall into two categories. On one hand, we have those that embrace digital, and have transformed to gain considerable competitive advantage. On the other, we have the resistors; the businesses that are left treading water. Whether Luddism occurs because of reluctance or ignorance, its effects are equally damaging. The MIT Sloan Review summed it up best: “The longer you wait, the more marginalised you’re going to become.”
What Transformation Entails
Digital transformation is not a single process, but an attitude, or a movement towards positive change. It’s not enough to simply tinker around the edges; true change needs to be embedded in every part of the business, and cultural resistance to that change needs to be addressed for it to succeed.
Most businesses begin with small steps towards a digitally transformed future. Some have started by digitally transforming operations, or empowering customer service teams with digital tools. Efficiency gains from these initial transformative projects inspire further improvements in other areas: collaborative working, unified communications, or marketing automation. As data quality comes into focus, and businesses invest in managing data properly, they can use their data more effectively to make better decisions.
In some cases, digital transformation is far more impactful even than that. It can disrupt the way an entire industry functions. Look at Airbnb and Uber: while they are not without flaws, they prove that few sectors will escape fundamental change in the end. When we view this change through the lens of increased progress and efficiency, it becomes clear that resistant companies have all the more to lose if they don’t keep up.
Some businesses have seized the opportunity that digital presents, and their success speaks volumes about the power of transformation. Look at Amazon: once an online bookstore, it is now a key player in the Internet of Things revolution, and is one of the world’s largest providers of cloud computing capacity. Garmin, best known for its GPS technology, now harvests data from wearable devices via Garmin Connect, and sells apps and widgets that have built a digital community around its brand.
Smart businesses want to see digital being prioritised because of the improved experience and efficiency it delivers. Speed-to-market, profitability, and customer satisfaction practically depend on it, and transformed businesses are ready to take advantage.
The outlook is bleak for a change-resistant business. Without a digital strategy, it has little chance of keeping up with the competitors already introducing automation, shifting business process to align with digital goals, and figuring out new ways to leverage the data they hold. Non-transformed businesses are losing ground, simply by doing nothing.