According to a recent IDG study, 89% of organizations have adopted or had plans to adopt a digital-first strategy however only 44% have fully adopted this approach.
Business Leaders have developed confidence in digitalization and its capabilities. The question has moved from "Why to adopt digital?" to "How to adopt digital?".
What does “digital business” mean to organizations today?
The IDG survey covered a broad range of industries including high tech, manufacturing, financial services, government/non-profit, education, healthcare, and retail. A quick look at what does Digital-business mean for organizations:
Organizations have various priority expectations from their digital journey. All of these objectives require a smart combination of technologies to achieve their intended results. Some are proven while others are developing at a rapid pace. Strong digital strategy and reliable external partnerships will help in identifying the right tools.
What are the main roadblocks organizations face for digital transformation?
There is a swarm of digital options to select from with life-changing claims. It just adds to many challenges already associated with such a huge transformation. It is important to remember that a solution that may work for your competitor may not work for you. The investments required to adopt a product and train the team are huge, it is important to take your time and make a considered decision.
Additionally, it is imperative to remember that a business is made by its people and any change of this level will need a human-centric approach. There is a huge business and cultural challenge which comes along with the digital strategy. This is fundamental to the success of any transformation and should be integrated at the strategic planning stage.
Both technology and organizational change management must be given strategic importance.
How are Digitally mature companies achieving success?
So, the most important question - how? Deloitte's insights researched the connection between the digital maturity of an organization, its financial performance, and its best practices. The study divided 1200 organizations from 6 industries as
Organizations that scored in the top 25 percent of the impact distribution were classified as “higher maturity”
Organizations in the middle 54 percent were classified as “medium maturity”
Organizations in the bottom 21 percent were classified as “lower maturity”
Digital maturity’s impact on financial performance comes from enabling improvements in efficiency, revenue growth, product/service quality, customer satisfaction, and employee engagement—as well as by promoting a greater focus on growth and innovation. The study finds that there is a strong correlation between the digital maturity of an enterprise and its net revenue and net profit margin. Benefits such as improved product quality and customer satisfaction contribute to better financial performance. Others, such as reducing environmental impact and increasing workforce diversity, are increasingly seen as part of companies’ broader social responsibility.
Digital Transformation enables not only faster and better performance but also the possibility of innovations that were not possible before. Cost savings and efficiency are the low-hanging fruits, in some way. Digitally mature companies aim higher to boost growth and innovation to fulfill digital transformation’s potential.
Following 7 digital pivots came up as the key to propel the digital transformation strategy for digitally-mature organizations:
Let us look at the best practices from the digitally-mature organizations for each of the pivots:
The key takeaway is to integrate digital strategy into your business model. Higher-maturity organizations had a significantly higher likeliness to having digital business models in place than lower- or medium-maturity ones.
Where do you begin your digital strategy?
The core of the digital strategy has to be built around the preferences and behavior of your customer. Customer thinking stands out as a core skill.
62% of organizations say delivering an excellent customer experience as measured by customer satisfaction scores defines success as a digital-first business
This methodology enables purposeful innovation leading to tangible results through digital transformation. Without this, the strategy can lose clear focus.
The top ways to integrate customer thinking into the business model are:
Apply intelligent customer engagement strategies in real-time. Use digitally advanced tools to get closer to your customer and bring in the human connection
Create more robust buyer personas breaking the traditional molds of generic demographics like age, profession, and location. Connect with your consumer closely on an emotional behavioral pattern
Use advanced data analytics to gather deep insights and map customer journey closely. Identify minor and major touchpoints to create seamless experiences
Digital transformation has been around, but still, many organizations face challenges in the execution. Technology is evolving at a rapid pace and it is certainly not easy to implement a change of this scale. Today, it is evident that the companies who have been early adopters are reaping tangible financial benefits as elaborated in Deloitte's insights. Investments in digital are rising - at more than three times the rate of IT spending overall. The key to successful transformation is to digitally enable the business model which is built keeping the customer at the core. Invest in intelligent partnerships with digital innovators, whether internal or external, to future-proof your organization.
Author: Pranjali Apurva, Chief Innovation Druid, BLVCK PiXEL