Digital Transformation is about Humanware tooDecember 11, 2023
Principles of reciprocity and likingDecember 13, 2023
- Companies need to address the digitization of their systems and processes to remain competitive in the market.
- Implementing digital transformation requires careful planning and integration into the business strategy.
- Digital transformation requires a cultural change and breaking the "status quo."
- Digital transformation provides numerous benefits, including increased employee satisfaction and adaptability.
- Examples of successful digital transformation include companies like Netflix, Airbnb, Tesla, and Amazon.
Companies have to address the digitization of their systems and processes to remain competitive in the market. Digital transformation requires cultural change and breaking the "status quo." It provides numerous benefits, including increased employee satisfaction and adaptability. Examples of successful digital transformations include companies like Netflix, Airbnb, Tesla, and Amazon. Implementing digital transformation requires careful planning and integration into the business strategy.
Digital transformation is a process that cannot be avoided and will affect all aspects of our lives.
Rapid changes in the business world have set a clear ultimatum for companies and leaders: it's high time to get serious about digitizing their systems and processes to remain competitive in an increasingly turbulent market. Global giants are taking radical steps towards digital transformation, and the benefits are indisputable—from increased productivity to job satisfaction. However, for leaders and managers, the concept of digital management remains a source of many doubts, preventing them from taking the first step towards digital transformation.
What is actually meant by the term digital transformation? Is it just moving operations to the cloud? What specific steps need to be taken? Do we need to design new jobs to create a framework for digital transformation, and is it necessary to hire a consulting agency? What parts of our business strategy need to change? Is it really worth it? These are the most common questions our clients ask us when they start the digital transformation process.
In this blog, we will deal with the concept of digital transformation and its importance. Additionally, we will provide a brief presentation of successfully implemented digital transformations of external and internal processes in companies across various industries. Our goal is to provide you with a clear picture of how digitization can improve your business and how you can adequately prepare for the changes it will bring.
What is digital transformation?
Digital transformation varies significantly from company to company, making it extremely difficult to give one comprehensive definition. However, generally speaking, digital transformation is defined as the integration of digital technology into all areas of business, resulting in fundamental changes in the way business is done and the way companies deliver value to customers. Almost all business segments are directly affected by digital innovations, including customers, competition, data, innovations, and values that companies bring to the market. We will delve into these segments in future blogs.
Digital transformation is more than technology
However, "digital transformation is not only about technology but about how we use technology to change the way we do business," precisely pointed out Jean-Philippe Courtois from Microsoft. Additionally, it is a cultural change that requires organizations to continuously challenge the status quo, experiment frequently, and accept criticism and failure as part of constructive feedback. This sometimes means that it is necessary to fundamentally rethink the way the company operates or even completely discard the outdated business processes on which many companies are built (especially in the Western Balkans) in favor of relatively new practices that are flexible and dynamic. Just as Peter Sondergaard from Gartner noted: "Digital transformation is a process that requires organizations to adapt to the speed of technological change."
After analyzing over 150 of the most successful companies, the MIT Management Review team points out that there is one thing that the best of the best—referred to as "Digs"—have in common, and that is that they combine digital activities with strong leadership to turn technology into transformation. MIT experts call this approach "digital maturity."
Why is digital transformation important?
Although there are many reasons to embark on a digital transformation process, the main reason is simple: company survival. The companies that survived the impacts of the COVID-19 pandemic (and even emerged stronger) are precisely those that transferred their processes to digital platforms, enabling smooth operation despite the turbulent market and newly created restrictions. Although all companies experienced disruptions in distribution chains, high pressure from regulatory bodies, and radical changes in consumer expectations, only those that successfully digitally transformed achieved enviable results at the end of each financial year.
The market demands digital transformation
Sandy Pentland, a professor at the MIT Media Lab, described how optimized automated systems in areas like supply chain management fail when faced with rapid changes in demand and supply—a reality that almost all organizations experienced firsthand during the pandemic. According to McKinsey's data, consumer habits are changing rapidly and are all geared towards digitalization. Rodni Cimel, global leader from McKinsey Digital, states that significant changes have been observed in a number of different industries, from food to marketing, and that an increasing number of consumers buy and pay for services through digital platforms. Also, organizations that have systematically approached digital transformation can provide a number of benefits to their employees, such as working from home and performance appraisal banners, which in turn increases their satisfaction. Therefore, the importance of digital transformation is undeniable and pervasive. There is almost no branch of human activity that cannot directly benefit from digitization.
Examples of digital transformation
Digital transformation can take various forms and directly depends on the industry in which the company operates, the current needs of the market, and the goals of the organization. This process permeates all aspects of business—external and internal.
External communication: examples of successful implementations
Digitalization is radically changing the relationship between the company and clients/consumers. For example, Netflix has created unrest in the ranks of production houses and distributors of video content with the introduction of a digital streaming platform, allowing the company to reach countless more viewers around the world. Moreover, digitization has allowed the experience of each viewer to be personalized and simplified, directly contributing to the dizzying success of this company.
Another example is the company Airbnb, which fundamentally transformed the way travel agencies operate. Instead of relying on traditional channels of communication between catering facilities and consumers, they created a digital platform for renting private facilities, apartments, via the Internet.
Similar examples are found in the auto industry, where Elon Musk's company Tesla is an example, or in the retail industry, where digitization has helped Amazon to be at the very top of the table of the most successful companies in the world.
Internal processes: examples of successful implementations
In addition to countless examples of successful digital transformation of external communication, similar success is observed in the field of internal communication and improvement of work and employee conditions. This can include automating routine tasks, introducing software solutions to better manage projects and teams, and using data to make better decisions.
One of the biggest performance boosters available on the market is brought to us by the Australian company Atlassian, and it refers to the digital transformation of project and knowledge management. For example, Spotify, Airbnb, and eBay use one of Atlassian's products, Jira Software, to track software development and manage projects. By using this system, companies are able to triple the effectiveness of their product development while having full control and insight during all stages of development.
Another high-quality example is a tool for improving internal communication, which is used by a growing number of companies, e.g., IBM and Target, and it's called Slack. Slack functions as a centralized place where colleagues can connect, collaborate, and share information in real time. Slack provides companies with an effective way to network employees: colleagues are divided by channels related to projects or topics. Using this system, many companies have improved their ability to quickly exchange information, solve problems, and make decisions, and to improve efficiency and productivity.