How to Survive 'Digital Darwinism'It's not a secret that digitalization and digital transformation are a fact of life, but there is still plenty of misinformation and misunderstanding going about. It's modern to talk about it, but buzzwords alone don't suffice.
30. 08. 2017 | Conference 2017
What Is Digital Transformation?
We have to understand that ‘digital transformation’ is not only a transformation in the sense of adopting new technologies. It’s a business challenge, demanding changes in the organizational culture, people, workflows, and business models. Digital transformation is also a process of developing new kinds of relationships with customers, understanding their needs, and much more.
‘88% of companies go through a digital transformation, but only 25% know WHY.’
Brian Solis, Chief Analyst, Altimeter Group
Two Examples of Successful Digital Transformation
McCormick & Company was established in 1889. They produce spices, herbs, and flavors for retail and wholesale markets. During their digital transformation, they create the online tool FlavorPrint, which recommends recipes based on the user’s taste. Users answer questions about their dietary habits, and the food they like or dislike. FlavorPrint uses these data to create custom recipe recommendations. FlavorPrint has been so successful that McCormick have transformed into an independent development company called Vivanda.
Domino’s Pizza was established in 1960 and became one of the biggest food chains in the United States. Today, they enable their customers to order pizzas from any smart device using the AnyWhere platform. Customers can enter orders even with tweets or emojis. They also have the Getting Home service, a voice-activated virtual assistant, which can parse conversations and make various types of order methods easier. The company faced hardships some time ago, but due to good management decisions, its digital transformation, and improvement of its products, it’s a modern-day success story.
Digital transformation cannot be achieved overnight. It’s a step-by-step process you have to follow if you want to succeed.
What about our business environment?
Almost every company can take advantage of digitalization.
Whether or not a retail store is ready for it, consumers have become ‘dependent’ on modern technology and they expect their retailers to keep up. Today’s digital consumer is a demanding ‘beast’. They want everything right now and more! Retail businesses who achieve digital transformation can reach a customer faster, because they can react to their needs more quickly, using online tools, smart devices, and ‘SmartBeacon’ technology to communicate with the customers in real time.
On the other hand, you have to face the supply chain challenges, which are of key importance and often far from being digitalized. Enabling delivery via services such as Amazon or CityExpress will boost your capacities. To always be one step ahead of your competitors you have to consider speed, time, and control.
‘The only wrong move you can make, when it comes to Digital Transformation, is not to make any move at all.’
Didier Bonnet, Senior Vice President & Global Practice Leader Capgemini Consulting, Author of ‘Leading Digital’
The Digital transformation of accounting firms involves the introduction of new technologies or upgrading existing IT infrastructure, things accountants are already aware of: cloud computing, big data, smart devices, etc.
This development allows you to reduce costs, analyze more data, reduce repetition, and implement automation. By adopting new technologies, you can focus more on your actual accounting tasks. The transition to paperless operations is therefore a necessity. Additionally, integrating the processes of your clients is another important step. In order to digitalize completely, accounting organizations have to upgrade existing business models and understand the work methods of their clients.
Common challenges you’ll face when attempting to transform digitally
Resistance to Change in People and Organizations
Keep in mind that that for 80-90% of people, change is painful. For employees not partial to change, changes will be an uncertainty, a challenge to their identity, and might potentially cost them their job. Managers rejecting changes will have to send advanced projects through countless reviews and will need countless assurances of the profitability of investments.
Lack of a Clear Vision
The vision ‘where do we want to be when we grow up digitally’ doesn’t just appear. It’s always possible to hit upon an extraordinary business idea, but it’s less likely to happen without putting some thought into it. If you’re still lost in the dark, you have to shine a light onto your ideas, study the market and your competition, and most of all understand the behavior of your customers. You have to adapt your new ideas to the vision of how your customer wants to communicate with you and how you’ll allow them to do that.
Outdated Technological and Developmental Processes
Companies trying to create adaptable and efficient digital experiences based on outdated technology are building on weak foundations. If your core systems were designed more than ten years ago, they probably require a major overhaul to be able to support a digital transformation.
Ineffective Customer Data Collection, Processing, and Storage & New EU Data Protection Directive for 2018
The root of digital success is customer data. Many organizations today have systems containing various types of data about their customers, but there isn’t a clear way to use, store or process them. Additionally, on 25 May 2018, new EU general data protection regulation comes into effect, which includes strong language on processing personal data of EU citizens, regardless of a company’s location. The penalties introduced with this legislation are significant!
Married to Your Legacy
Companies successful in bridging the digital divide understand that the world around them changes and therefore their potential clients change with it. Established business patterns that worked a decade ago might no longer be effective a decade hence. Uber created the world’s largest car fare service without purchasing vehicles, while eBay and Alibaba created some of the world’s most extensive retail channels without acquiring inventory.
STAYING IN YOUR COMFORT ZONE?
Seven Steps to Survive ‘Digital Darwinism’
Register for the PANTHEON conference!
Join us at the International PANTHEON Conference 2017 and find out the answers to the questions WHAT digital transformation is, WHY it’s needed, and HOW to overcome its challenges.
Realize your digital transformation is inevitable
It’s important to understand that your digital transformation is inevitable. Digitalization is not a fad, but a trend that cannot be ignored.
Define the digital transformation of your company
Adopt new technologies and upgrade your applications. Review internal and external operations and processes, thereby building a solid starting point for a successful transformation.
Prioritize the digital transformation
If you approach the digital transformation process with doubt in your mind, it is destined to fail.
Develop an organizational company culture and ‘digital management’
Understand that digitalization is not merely a tool for improving your business’s results, but an absolute necessity for the survival of your company.
Create and support a digital transformation team
Pick competent individuals, give them the right tools, and ensure that people in your company will know and appreciate their work.
Reevaluate the connections with your suppliers
Tear down the hierarchical relationships and promote partnerships based on trust and loyalty!
Recognize and evaluate the needs of your customers
Understand that the customer is in the driver’s seat when it comes to digital transformation.
- EUGDPR Portal. “The EU General Data Privacy Regulation”. http://www.eugdpr.org/eugdpr.org.html.
- Signaturit. “The 10 most common mistakes made during a digital transformation”. Last modified March 23, 2016. https://blog.signaturit.com/en/the-10-most-common-mistakes-made-during-a-digital-transformation.
- Signaturit. “7 steps to kickstart a digital transformation in any company”. Last modified January 12, 2016. https://blog.signaturit.com/en/7-steps-to-kickstart-a-digital-transformation-in-any-company.
- Howard Tiersky. “5 top challenges to digital transformation in the enterprise”. CIO. Last modified March 13, 2017. https://www.cio.com/article/3179607/e-commerce/5-top-challenges-to-digital-transformation-in-the-enterprise.html.
- Rob Petersen. “11 inspiring case studies of digital transformation”. Biznology. Last modified December 28, 2016. https://biznology.com/2016/12/11-inspiring-case-studies-digital-transformation/.