At a Glance
- Digital transformation is essential for businesses to remain competitive and successful in today’s hyperconnected world.
- Organisations should embark on a digital journey to replace legacy systems, gain a deeper understanding of their customers, drive innovation, and improve overall competitiveness.
- Identifying gaps in your current digital transformation journey can be daunting and complicated by the historical precedents that exist such as expectations and skills.
Digital transformation (DT) is reshaping the fundamentals of how businesses operate. This shift involves a re-evaluation of internal systems, customer interactions, and beyond, with a focus on unlocking the full potential of technology. However, achieving full digital transformation does not happen overnight. The transition starts with digitisation, progresses through digitalisation, and finally reaches DT.
How the organisation matures…
Digitisation refers to the process of converting analogue information locked up in physical documents into a digital format. At this stage, it is about organising the data. Once the information has been digitised, the process moves on to digitalisation, where the digitised information is used to work more easily and efficiently. Technology is used to help automate and streamline processes and reduce manual effort.
The final stage for an organisation is to transform the institution as a whole. Successful digital transformation requires a series of deep and coordinated changes in culture, people, and technology that enable new educational and operating models to change an organisation’s processes, strategic direction, and value proposition.
Why organisations should embark on a digital journey
Technology has permeated every aspect of business operations in today’s hyperconnected world. This makes DT a critical strategy for business survival and success. Those who ignore the transformative power of technology risk being left behind. Here are compelling reasons why embarking on a digital journey is critical for any organisation:
Replace legacy systems with cutting-edge technologies
Although more than two-thirds of global organisations continue to rely on legacy systems, the looming risk of performance issues or complete system failure cannot be ignored. The inefficiency of these legacy systems is evident in their limited ability to meet the demands of modern business.
When an organisations commits to digital transformation by replacing or modernising legacy systems, it not only reduces the risk of operational inefficiencies, but also improves overall organisational efficiency, and increases productivity.
Enables deep understanding of the digital customer
Approximately seven out of ten, or 67%, of customers use multiple channels to complete a single transaction, according to a Salesforce report on “the State of the Connected Customer”. These customers also expect a seamless experience across all touchpoints.
Successful digital transformation can reveal the behaviour, habits, and psychology of the modern customer across different online platforms. Businesses can use this insight to increase the satisfaction of existing customers and attract new ones.
Foster innovation
Digital transformation, driven by advanced technologies and data analytics, enables businesses to gain a deeper understanding of industry trends, patterns, and untapped opportunities, which they can use to create new products or services. As a result, the pace of product development is accelerated.
Improves organisational competitiveness
Legacy systems can be inefficient, expensive to manage, and prone to downtime. Moving to modern technologies provides a competitive advantage. For example, using cloud computing rather than relying on costly onsite technology infrastructure enables highly scalable operations. It also reduces IT infrastructure costs and increases efficiency.
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Understanding the trajectory of a digital transformation journey
Implementing digital transformation in organisations offers clear benefits but success depends on effective execution. Given that organisations have unique needs and goals, as well as varying levels of digital maturity, the digital transformation journey will be different for every company.
Nevertheless, understanding the stages of digital business is essential t effectively navigate this transformative landscape.
1. Business as usual, status quo: This is where organisations begin their DT journey. Here, companies should assess the current state of the organisation, including technologies, processes, and cultures.
2. Present and active: This stage is about experimentation across the organisation. It also involves encouraging creativity and improving the digital skills of stakeholders (e.g., employees).
3. Formalised: As experimentation becomes more deliberate and the most viable initiatives become clearer, those responsible for digital transformation in an organisation begin to seek leadership buy-in. The goal is to formalise viable ideas.
4. Strategic: Once DT initiatives have the support of leaders in an organisation, the next stage is to develop a strategy. Different departments and teams within the organisation can work together to create strategic plans for transformation.
5. Convergence: In this stage, an organisation forms a team dedicated to digital transformation. The team will set DT goals, guide the strategy, and implement systems to support transformation initiatives.
6. Innovative and adaptive: After implementing digital transformation initiatives, leadership establishes a system to monitor new technologies in the industry and market trends. This proactive approach ensures that the company remains adaptable to changing economic conditions and technological advances.
If your organisation is embarking on a transformation journey, can you identify your organisation’s current position? It is important to remember that DT frameworks go beyond mere elements and stages; they revolve around vision, purpose, and determination.
No easy way to achieve digital transformation: Leave it to the experts
Digital transformation is essential for organisations seeking to achieve sustainable success and profitability. Although the upfront costs of upgrading or replacing legacy systems can be significant, the process of digital transformation opens doors to new opportunities that can be beneficial in the long run.
Despite the fact that around 80% of companies have completed their digital transformation, there is still room for improvement. This is because at this stage, many organisations encounter challenges such as budget and schedule overruns. Operations can also be disrupted if changes within the organisation are not properly managed.
Identifying gaps in your current digital transformation journey can be a daunting task. This task is further complicated by the historical precedents that exist – the roles and responsibilities, expectations, and skills.
Many factors go into a successful DT journey, and bringing a fresh perspective and a thorough approach is why Renoir is often engaged by organisations. With over 25 years of experience in DT programmes, we help organisations maximise their return on investment by identifying opportunities across the value chain and providing practical solutions.
What sets us apart is our team of experts in change management, who ensure that any new culture or initiative is embraced throughout the organisation. We take projects through to full adoption using our behavioural and cultural change methodologies.
I need experts to assess our existing digital transformation initiatives.
