What is digital transformation
Digital transformation occurs when a company integrates digital technologies into
its business operations, adopting them as part of a cohesive strategy and culture.
Digital transformation can change how a business operates, engages employers,
interacts with suppliers, and delivers value to customers and other stakeholders.
Digital transformation in health care
As mentioned above, the shift from paper-based patient records to EHR has made
monitoring health concerns easier for patients and providers. Online portals also
help make virtual doctor’s visits more accessible in recent years. For example, the
company Doxy.me created a free web-based system designed for telehealth.
Clinicians can create an account and offer a personalized waiting room to
communicate with patients. Patients can click a link to “wait” in the room until the
clinician is ready. This service provides an easily accessible, secure, and safe virtual
platform for telehealth.
Digital transformation in entertainment services
Netflix started out as a DVD distributor and then pivoted into a streaming service. It
was a bold (but smart) move. Blockbuster stores were dying out, and people were
spending more and more time online. Later on, competitors like Hulu, Disney+, HBO
Max, and Amazon Prime would enter the market for a slice of the streaming service
pie.
Digital transformation in finance
Financial services have undergone a significant transformation in recent years,
enabling several forms of mobile banking. Consider the transformation from cash to
credit cards and automated teller machines (ATMs). Or, think about how touch-free
payments such as Apple Pay and CashApp have proliferated. Another notable
example is Wise (formerly Transferwise). This company created a borderless
banking application that allows businesses and individuals to send and receive
money in multiple currencies.
Digital transformation in manufacturing
Many manufacturers undergo digital transformation to create more lean, efficient
supply chains. Using predictive analytics and other forms of artificial intelligence
(AI), they reduce costs, maintenance, and consumption. For example, Tesla is known
for being a manufacturer of electric cars. It is the only car manufacturer that
provides updates that allow the car to improve safety and performance capabilities
remotely. It has also worked to produce more lithium-ion batteries at its
manufacturing plants, using digital technologies to increase year-over-year growth
[2].
What Is the Importance of Digital Transformation?
While every digital transformation initiative will have its own specific goals, the
primary purpose of any digital transformation is to improve your current processes.
Digital transformation is necessary because companies must evolve to remain
competitive. If you aren’t evolving, you’re falling behind.
Let’s look at a recent example highlighting the critical nature of digital
transformation – Southwest Airlines.
The digital transformation process in 4 phases
Digital transformation efforts look different from industry to industry. The process
can vary slightly depending on customer expectations, business models,
and organizational culture. However, the overall digital transformation process can
be broken down into four phases:
1. Early stage: The first stage of the process includes planning, cultivating the
necessary partnerships, and testing the organization's capabilities. Business leaders
develop the approach and select the tools or digital innovations they want to
implement.
2. Mid-stage: During this stage, business leaders choose focus areas like business
processes, digital products, or key roles within the organization. The digital
transformation strategy is defined, along with key performance indicators (KPIs) that
help measure success.
3. Growth stage: The growth stage in a digital transformation project emphasizes
scalability. It focuses on adopting new business processes, products, and protocols
across the organization. Change management is introduced during the third stage of
the transformation process.
4. Mature stage: The final stage in a digital business transformation is centered
around continued innovation and improvement. A strategic approach to governance
should also be defined during the mature stage.
Key components of digital transformation
Digital transformation is rooted in the use of digital technologies. Four main types of
technologies commonly drive digital transformation — analytics tools, mobile apps,
platforms that support shareable capabilities, and social media.
These categories (which can evolve as technology evolves) cover many different
digital tools, such as:
Cloud computing. Cloud computing is a broad term that refers to the
delivery of computing services via the cloud, aka the internet. So, instead of
accessing computing services through software downloaded to your
computer or other digital devices, you’re accessing it on the web. Examples
of cloud computing services include file storage, data backup, disaster
recovery, and collaboration tools. For example, a business that uses an online
storage tool like Dropbox is using a cloud computing service.
Big data analytics. Big data analytics is the process of identifying patterns,
correlations, and trends in big swaths of raw data — from scientific study
results to customer surveys. Data analysis tools use statistics techniques like
clustering to make meaning out of this data. For example, a business can use
big data to analyze customer information to get a better idea of customer
profiles, wants, and needs. This is something a market research agency might
do, for instance.
Internet of Things (IoT). IoT refers to the technologies that allow devices to
communicate with one another, creating connected systems that businesses
can use to maximize efficiency. Everyday examples of the IoT include smart
home devices, like security cameras, lights, and thermostats — as well as
wearables like fitness trackers and smartwatches. Businesses can use IoT
data to gain insights into how customers use their products. For example, a
fitness wearable might use information to upsell customers on products to
improve their health, like exercise plans, resulting in a better user experience.
Artificial intelligence (AI). AI refers to a machine’s simulation of human
intelligence processes. AI can be used for various purposes in business, from
automation to data analytics and natural language processing (NLP). AI is
often used in businesses for customer service tools like chatbots — which are
already used in several industries — and from hospitality to e-commerce.
Automation. Automation refers to the use of technology to perform
repetitive tasks, minimizing the need for human intervention. Automation can
be applied to various business processes, such as managing employee
schedules, payroll, and customer relationships. For example, an e-commerce
store can automate sending a follow-up email to customers asking them to
review products they ordered.
Robotics. Robotics is a type of engineering that involves the design and
creation of robots for various purposes. Robotics can be applied to all kinds of
industries, from health care to fitness. For example, the manufacturing
industry uses robotics to perform monotonous, repetitive tasks. And in the
agriculture sector, farmers can use tractors and harvesters self-guided by
GPS.
ORGANIZATIONAL CHANGE
What is organizational change
Organizational changes are those that have a significant impact on the organization
as a whole. Major shifts to personnel, company goals, service offerings, and
operations are all considered different forms of organizational change. It’s a broad
category.
Before you can design your change management strategy, it is important to
determine the type of organizational change. This helps execute the right change
management plan for the best possible results. Knowing the type of organizational
change will also help you choose the right change management tools.
Why Is Organizational Change Management Important?
Organizational change is a business necessity. Employees leave, and new
employees are hired, new teams and departments are created as the company
grows, and businesses adopt new technology to stay ahead of the curve.
The key to successful, productive organizational change is the way you manage it.
It’s vital to keep employees in the loop and ensure that they understand what the
changes are and how employees will be affected.
Types of organizational change
Strategic change
Organizations implement strategic changes to their business to achieve goals, boost
competitive advantage in the market, or respond to market opportunities or threats.
A strategic change includes making changes to the business’s policies, structure, or
processes. The upper management and the Chief Executive Officer often bear the
responsibility for strategic change.
People-centric organizational change
While all changes affect people, people-centric types of organizational change
include instituting new parental leave policies or bringing in new hires. When
implementing a people-centric change, the leadership must bear in mind that
employees will naturally resist change.
A people‐centric change requires transparency, communication, effective
leadership, and an empathetic approach.
Structural change
Structural changes are changes made to the organization’s structure that might
stem from internal or external factors and typically affect how the company is run.
Structural changes include major shifts in the management hierarchy, team
organization, the responsibilities attributed to different departments, the chain of
command, job structure, and administrative procedures.
Circumstances that lead to structural change include mergers and acquisitions, job
duplication, changes in the market, and process or policy changes. These changes
often overlap with people-centric changes as they directly affect most, if not all,
employees.
Technological change
The increasing market competition and constantly evolving technology lead to
technological change within organizations. Technology change often involves
introducing new software or systems to improve business processes through SaaS
change management. However, technology project goals are often improperly
defined and poorly communicated, which scares and frustrates your employees and
ultimately leads to resistance.
Technology change management is all about identifying new technology and
implementing a digital strategy for improved productivity and profitability.
Unplanned change
Unplanned change is defined as a necessary action following unexpected events. An
unplanned change cannot be predicted but can be dealt with by effective change
management.
Remedial change
Remedial changes are reactionary. This type of change occurs when a problem is
identified, and a solution needs to be implemented. As these changes are designed
to address an issue; they call for immediate action.
Reactionary change may not be ideal, but it’s inevitable. The benefit of the remedial
change is that judging its success is quick and simple with just one question – was
the problem solved or not?
