Updated on by Hayley Brown
Digital transformation is a hot topic. If the past year and a half has taught us anything it is that organisations need to be much more adaptable to disruption. Digital technology is leading the way in regards to helping businesses adjust, and align their IT and business strategies.
So what is digital transformation? Well it is the adoption of digital technologies into all areas of a business. Common goals for the implementation of digital technologies is to improve efficiency, innovation and value. It fundamentally changes how the business operates, the business model and how value is delivered to customers.
It can also be a cultural change across an entire organisation. Resulting in an agile approach with continuous experimentation, development, failure and success of a business. Ultimately digital transformation drives change in an organisation across several main areas, the strategy, customer experience, and business processes and models.
Making required changes to your business strategy to incorporate digital technologies
Understanding the types of challenges and demands your business faces are key drivers in making changes to your business strategy. Incorporating digital technologies can help amend these problems through innovation.
For instance, there are common themes enterprise business leaders mention when embarking on a digital transformation strategy. Firstly to improve their customers’ experience, increase operational agility, and develop a new culture and leadership. As well as encouraging workforce enablement, and digital technology integration throughout the enterprise organisation.
A major change that would need to be addressed is the legacy systems and technologies used in enterprise businesses. They act as a barrier or hindrance in digital transformation progress.
Beth Devin, Managing Director and Head of Innovation Network & Emerging Technology, Citi Ventures explains. “If you’re spending 70 to 80 percent of the IT budget operating and maintaining legacy systems, there’s not much left to seize new opportunities and drive the business forward. And this expenditure will grow as technology ages and becomes more susceptible.”
According to Devin, legacy systems are considered inflexible. As well as carrying significant amounts of tech debt due to outdated databases, languages and architectures.
If an enterprise business should want to evolve and embrace digital transformation they must increase their efficiency with technology first. According to the 2021 Deloitte Digital Transformation Executive Survey, it provided fresh evidence “that more digitally mature companies are more resilient and better able to navigate rapid change, and they do significantly better financially as a result.” Therefore many enterprises need to adopt agile ways of working across their organisations. As well as automation and integration technologies to help align IT and business strategies.
Aligning your IT and business strategies to fulfil your long and short term business objectives
Your business and IT strategies should not be siloed from one another, and leadership should recognise the importance of IT. As it has a crucial role within a business, and is used in every department. Employees now have high expectations in regards to the technology they use to provide the best service possible to their customers.
Not only must the technology support the business goals and growth but also reduce costs. Increase security business wide, enhance employee productivity, streamline workflows and improve communications across departments.
Your IT strategy should be somewhat a reflection or aligned with your business objectives. Outlining how IT and technology should be used to support the desired business strategy objectives. As well as determining which technologies to invest in. To not only propel the business further but reflect on the current state of the business.
Repositioning the role of IT from being a service provider to a strategic player helps your business and IT strategies to align. IT must co-create and solve problems to deliver value to customers. The result is not only beneficial to your organisation, but is crucial in going forward with digital transformation.
Digital technology transforms your business model
Traditional business models are shifting due to new digital technology. With its implementation it can provide organisations with more revenue opportunities, and give customers more value. For instance, during the pandemic many traditional brick and mortar shops turned to e-commerce sites to sell their products.
A large-scale example would be Peloton, as mentioned in the Harvard Business Review, The 4 Tiers of Digital Transformation. “Peloton uses product-sensor data from its exercise equipment to create a community of users and to match individual users with suitable trainers.” Therefore not only do they generate revenue from the sale of their exercise products. But with a subscription based workout application as well.
Peloton has the ability to develop deeper customer relationships, and deliver great customer experiences. With the in-built personalisation for their customers based on the user-interaction data generated.
This in turn enables better insights to create and capture more value, and design better products and services. Turning their business model from purely product to service as well. Opening up new revenue streams with the use of digital technologies.
Not only has digital technology influenced business models but digital initiatives taken by organisations can change the business dynamic for employees as well. For instance converting to cloud computing. This is thought to be an innovation driver.
As well as reskilling employees, implementing automation to remove mundane repetitive business processes. So the workforce can focus on creative, problem-solving tasks. In doing these digital initiatives it can have beneficial effects on your organisation’s culture.
Share your digital vision with your team
Your digital vision affects everyone you employ. It is therefore important the vision is shared and understood by the organisation. It can help inspire and engage with your team to innovate, and develop products and servicers further. As well as deliver positive customer experiences, improve the customer journey and reach customer expectations.
Aligning your business and IT strategies help to implement digital transformation. Resulting in you being able to stay up to date with emerging customer trends. Compete better in the market, and drive a culture of innovation throughout your enterprise organisation.