Going digital has become the talk of the town, and leading that, digital transformation has emerged as a game-changer in the modern economy. Digital transformation entails leveraging digital technologies in the various areas of the business to develop ML/DL solutions for organisations. But that’s not all. Digital transformation allows businesses to discover new opportunities based on technical innovations and to better their services & customer relationships based on insights. It marks a rethinking of technology and people to make data and business-driven decisions.
While digital transformation has been in the works for a while, the COVID-19 pandemic all but accelerated the growth that was supposed to take a few years and made it happen in a few months. Digital transformation has disrupted the business ecosystems by fundamentally changing businesses’ key strategies and methods. As a result, many high tech companies have reported a cost cut by 10 to 20 per cent after digital transformation and annual revenue growth of 10 to 15 per cent.
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Digital transformation is being widely adopted for better business insights and competitive edge by organisations globally, given its impact on various business aspects. Digital solutions enable organisations to capture and address the customers’ needs, be agile over competitive companies, foster innovation and create an organisational change to encourage new ideas.
Information as an asset is still in the “early adoption” phase for digital transformation, making data and analytics strategic priorities. Data and analytics are key accelerants for the digital transformation process, and companies are quickly adapting to make the change. Analytics is the key to using tons of data accurately, finding hidden inefficiencies and leveraging the data for digital transformation.
The six business pillars where digital transformation can be implemented
At the same time, an MIT Sloan report rightly points out that strategy is more important than technology when it comes to digital transformation. Technology is constantly evolving with complex processes, making it imperative for companies to come up with a robust strategy. Below are the five essential steps that organisations need to follow to ensure a successful digital transformation.
1. Defining a framework for your vision
The first step is to build a digital transformation framework based on your vision for the organisation’s future. The idea behind this step is to frame a clear picture of your goals and what you want to address with this digital transformation.
This step involves finding strategic gaps in your organisation, identifying challenges faced by the team on daily processes, deciding what aspects need a change and why the change is important. The organisation’s customers are extremely important, and the change will need to be thought of through the perspective of its impact on them. This could include envisioning the type of experience the organisation wants to provide the customers or their demands and how digital transformation can help meet them.
The framework will include a timeline for when the change will happen and how. Not everything needs to happen at once. Organisations can start by working on one department or automating the most outdated systems initially. It is integral to make a note of the interlinked workforces and systems here. For instance, if you upgrade an old system that has integrated with newer tools, the organisation needs to note how a change to one flow might affect different systems and create a plan on dealing with it.
2. Leaders should be a part of the transformation
This is a step that can make or break the digital transformation process. It is integral to involve the right leaders from the initial stages to assist with the planning and execution of the digital transformation. Many organisations opt to hire or engage a Chief Data Officer (CDO). A recent Gartner survey has revealed that 72% of data and analytics leaders are involved in digital transformation initiatives to create a synergy between a data-driven business and digital transformation. The survey also revealed that successful CDOs could translate data into business results.
It is also important for executive leaders and the board of directors to be fluent in the digital zone to ensure success.
3. Create a supporting team
Along with a leader, a successful digitally transformed organisation needs a tech-savvy team to support the transformation. This step entails readying the employees and different teams of the organisation to be onboard and ahead with the transformation. Along with the data science teams, the supporting job roles that need to be aligned include
- HR team to assist the employees in managing the changes
- Line managers to reinforce the changes and support to the teams
- Executors to monitor the changes and create feedback on the best practices
- IT to ensure the new technologies are well integrated with existing processes
Additionally, every member of the organisation needs to be willing companions and informed enough on the technology to sustain the business gains from the digital disruption. This can be ensured by creating a culture that supports digital innovation. This does not mean all employees need to be fluent in technology, but they should have an enhanced understanding of the technological vision.
4. Choose the right technology
It is important for companies to understand their business objectives and why they need digital transformation. Then, it is important to choose a technology based on those goals and visions. There are different types of digital transformation techniques, vendors, platforms and solutions in the market today. But organisations need to make sure they understand how these technologies align with their vision and choose accordingly. Leaders need to understand if the technology fills a gap in their organisation and is in accordance with its strategy.
These technologies can be chosen based on the needs of the organisation. Popular digital transformation services include dashboards for data visualisation, NLP, DL, AI and ML. These are supported by tools such as Python, Tensorflow, Docker/Containers, Kubernetes, and Cloud Services.
AI is one of the central enablers of digital transformation. Digital transformation strategies leveraging AI have enhanced speech, ease, cost optimisation and simplification of the process. AI/ML allows organisations to use their data efficiently, easing integrating different systems, automating several tasks, and smoother operations.
For instance, companies creating a product can leverage digital transformation with AI to sort through information and provide solutions for professionals in the various stages of the process. AI assists in the research, market study, and predictions beforehand and includes continuous real-time maintenance during the execution phase and monitoring & product forecasting nearing the delivery phase.
It is also possible to use a demo environment to test the changes before applying them to the entire organisation. Decision-makers can also take external expert help in this stage. It is essential not to skip any steps involved in this process.
5. Create feedback loops
Digital transformation is an ongoing process, and onboarding technology is just a starting point for the organisation’s future. Decision-makers need to create metrics based on their frameworks to track and measure the technology’s impact. It is essential to constantly monitor the impact of the changes, how positive they are, what gaps they are filling and what they are adding to the organisation through data analysis. These feedback loops will help organisations make necessary adjustments or redesign plans to ensure the best impact possible.
Lastly, strategy sufficiency is needed to ensure a sufficient ratio between ideas that become a success. Google-inspired 70-20-10 portfolio model of allocating resources is one of the most widely used techniques to allocate resources towards innovation. The technique suggests that 70 per cent of the organisation’s effort goes into optimising the team’s daily operations, 20 per cent on continuous improvement and the last 10 per cent on disruption and innovation. Therefore, a good strategy and an execution plan are essential to support digital transformation.
Data is an asset today, and digital transformation helps bridge the gap between idea generation and meaningful innovation. The coming years will be focused on using technology to harness the power of clean and integrated data to better decision making and grow businesses.
This article is written by a member of the AIM Leaders Council. AIM Leaders Council is an invitation-only forum of senior executives in the Data Science and Analytics industry. To check if you are eligible for a membership, please fill the form here.