The intensive development of digital technologies is changing the face of the global economy. Many companies are looking to move their business processes to a digital environment in order to increase sales and reduce transaction costs. However, to really improve the efficiency of commercial activities, it is important to use a real digital transformation, distinguishing it from a similar concept of digitalization. As part of this phenomenon, entrepreneurs can create and distribute products that are truly valuable to customers.
Digitization and digital transformation: key differences
Digitization is the application of digitized information to simplify established ways of working. This approach allows you to upgrade your business, i.e. increase the profitability of the enterprise and significantly reduce costs. But it does not provide an opportunity to detach from competitors. The company maintains the traditional character of the product, production process and distribution channels. In other words, a figure optimizes the activity of an economic entity, but does not make it the dominant of the market.
Digital transformation is a deep implementation of digital technologies in order to change business strategy, marketing approaches, corporate culture, customer experience, external communications. It allows you to move to a qualitatively new level of doing business, open up new streams of income. This process is usually accompanied by the development of a digital platform for communication with other market participants. As a result, the company stands out favorably among competitors: its product is much more interesting for consumers, and production and sales are much more successful.
Characteristics of digital transformation
1 Orientation of culture to digital technologies
Every aspect of a business must be viewed from a digital value perspective. An entrepreneur can develop his own digital solutions for different purposes - automating stereotyped operations, reducing production costs, improving customer service, etc.
Research firm Gartner coined the term Continuous Next specifically to refer to this policy. It is a special mindset in which companies become flexible to change and continually seek digital development paths.
2 Design thinking
This concept is understood as a creative approach to the generation and implementation of ideas. The main goal of the method is to go beyond stereotypes and create something truly valuable for potential customers.
Before moving to digital transformation, a general meeting of all stakeholders (management, managers, users) should be held to identify problems, goals, opportunities and further develop viable solutions. It is advisable to test the finished idea during the design sprint.
3 Effective personnel management
When creating any digital solution, the doubts and fears of each employee must be taken into account. Otherwise, digitalization can cause corporate chaos, as it changes the usual roles of employees. The implementation should take place gradually, with the obligatory elimination of the fears of the collective.
4 Focus on data
Most digital transformation initiatives are centered around data. That is why the success of implementation, first of all, depends on the entrepreneur's knowledge of their location, opportunities for enrichment, methods of using analytics and artificial intelligence.
5 Focus on quality
The main task of digitalization is to improve the quality of the business, in particular the products or services offered, the experience of the personnel, the image of the organization. To maintain a high level of quality, it is necessary to implement the project consistently, check the results at each stage of implementation, improve the procedures used, make fine adjustments and turns.
Digital transformation in promising business sectors
In the construction industry, digital technologies are most actively introduced into design. The new standard for building projects is the 3D BIM model. The future object with all its nodes and communications "comes to life" on the screen so that the client can visually evaluate it in terms of quality and reliability. With this approach, the customer becomes a full participant in the construction: he can make adjustments throughout the entire process of work.
For construction companies, the BIM model is just digitalization, since it helps to reduce errors by only 5-10%. For designers, this technology is a digital transformation: the abandonment of flat drawings significantly reduces the time and costs of project development.
The strength and safety of each car is tested using crash tests. Sometimes, to identify all the weak points of the model, you have to break more than a dozen cars. To reduce the number of full-scale tests, instead of real vehicles, their digital counterparts are used, and the car from the assembly line is taken only for final testing.
For the automotive group, this is digitalization, which helps to reduce the time and financial costs of testing. For crash test companies, this is a digital transformation that allows them to successfully outperform the competition.
For efficient customer service, large banks use a call center. Often its work is automated by means of artificial intelligence: not employees, but robots, are engaged in receiving incoming calls.
For the banks themselves, call center automation software is becoming digitalization. Thus, they will reduce the staff of operators and their labor costs, but they will not beat the competition. For the call center service provider, this solution will be a digital transformation that will make it a leader in its sector.
To choose the right digital transformation strategy, you need to follow modern digital trends, study the actions of competitors, scout projects and startups in your own business niche. The digitalization work plan must be regularly adjusted to reflect the emergence of exciting new technologies.