Let’s start with a question:
How do most organisations embark on digital transformation?
More often that not, companies put together a lean, internal digital unit led by ‘enterprising’, ‘young’ hires to test new marketing initiatives through digital platforms and social media.
They may think about quick digital projects or ‘experiments’ — such a digitising the business with a fancy e-commerce store — thinking: “Let’s set this up and see if our investment pays off.”
Or they may also think of digital transformation as cost-reduction interventions through off-the-shelf systems to increase productivity and reduce human error.
Here's the issue
These interventions are not sustainable nor are they set up to truly transform the business!
Digitising functions of any business will not yield a transformation that impacts business delivery or success. Modular digitisation is not enough, and transformation must not be viewed in silo by function or department. Transformation can only be successful when the new digital technologies and systems are allowed to reinvent the existing product or service.
Digital transformation is larger than automation and technology — it involves companies restarting with a digital-led core. Companies can start re-examining their value offering by asking: “How can technology be a game-changer for the industry?”
Traditional marketing will promise a company two million eyeballs. But from a digital vantage point, all conversations ought to start with “How can we track the success of these two million eyeballs? How do we nurture these visitors beyond just viewing? A vast number of businesses are at the brink of bellying-up because they do not consider how digital methods can impact their business model, beyond reaching out to customers.
Digital technology has changed the definition of business
We have moved on from an economy where a business is when someone needs to have an inventory to sell. This is no longer true. The world largest transport company — Uber — does not own any vehicles and the largest movie house — Netflix — does not own any cinemas. The digital economy has opened up new possibilities.
Back in 2010, many companies got on the bandwagon and pinned their businesses and sales online as they were afraid that the lack of an e-storefront would make them redundant in the digital economy. Many did not yield significant results.
Truth is, the biggest competitors are no longer local businesses. Going online also means setting up a business against competition from around the world. Businesses that are new to e-commerce often get swept away by established, colossal e-companies and entire e-commerce countries. It is simply impossible for them to compete in terms of scale, reach and marketing budgets.
Embracing a paradigm shift
Companies are now growing laterally — competitors are no longer from the same industry. Likewise, business growth is not limited to the same industry.
Unless a company is willing to venture into new growth spaces, which true digital transformation can bring about, they risk becoming forgotten and obsolete.
Now back to the question, how should organisations embark on digital transformation?
Or more specifically, how can you be the catalyst for that change?
Read Part 2 of our article, Digital Transformation in 3 Steps, for the answer to the above question.
Written by Hanson Ng