Digitally transforming your business might have been considered a bold move to date, but it’s quickly becoming a necessity for organizations to compete in the digital economy. When done correctly, it can put you in prime position to not just compete, but actually lead in your field in both 2017 and beyond. The important thing to note, though, is this: digitally transforming a business is not like flipping a switch. It takes time and involves an entire rethinking and re-envisioning of what that business is and what you want it to be.
In short, a business cannot go digital just for the sake of going digital, nor is it something into which the owner should simply dabble for a brief time. If you are going to make the transformation, there needs to be genuine value behind it.
Your transformation begins with a question every business-of any size-should be asking itself: “How can my industry and organization be disrupted by a new company that does it cheaper and more effectively?”
The decision to go digital should be based in three basic elements, which may seem simple but are extremely important.
As you start down your road to digitalization, or at least begin examining whether it is the right thing to do, your company can easily apply Michael Porter’s “Five Forces” just as it would to any other business decision. Porter’s Five Forces looks at competitive rivalry, bargaining power of suppliers, bargaining power of customers, threat of new entrants and threat of substitute products or services. All can be invaluable in reinforcing strength and exposing vulnerabilities. In particular, the threat of new entrants into the field is one area that needs close attention when it comes to digitalization. For instance, what often took years of research and development for a new competitor to join the marketplace can now be done more quickly and inexpensively in the digital realm because of the power of the cloud.
To continue on the path towards transformation, your next step is to complete an assessment which identifies business needs and key performance indicators, such as supply chain and customer relationships. From here, it is time to examine the state of data in the business and the intelligence which allows that data to be accessed at the right time. Tools such as predictive analytics are used to educate the entire organization on this essential information.
Once this has happened, the intelligence can be applied to the organizational processes-naturally in this area of business, process will drive results. This allows for workflows to be streamlined, barriers to be removed or reduced and operations to be simplified so they function with more speed and agility. Lastly, once everything is in place, performance can be gauged and measured and next steps can be taken to tackle new challenges and create new opportunities. This is what the digital transformation of a business looks like.
As an example of the value of going digital, let’s say there is a product-based business that depends on salespeople as its lifeblood. Chances are the relationships that mean the most to the customers are those built with individual members of the sales force. So when a certain salesperson retires, that relationship-using the old business model-could go away and the business is at risk of losing a valued customer.
However, if the company is well-established on a digital platform, predictive analytics could be engaged to better ingrain that customer with the entire company, beyond just that personal sales relationship. Orders could be placed ahead of time instead of having to constantly contact the one salesperson-that personal relationship with sales can and should still exist, but now the model has been augmented and expanded so the entire burden is not placed on just one person.
Digital transformation, predictive analytics and the Internet of Things–the latter of which allows for connectivity on all levels and much more rapid response to issues as they arise–represent the future of business in the United States and around the world. Companies are wise to consider starting the process sooner rather than later, but need to be advised that when they do, it is a complex process that must be done one step at a time and must be embraced organization-wide.