We’d define ‘Digital Transformation’ as a series of consecutive results that a company achieves through continuous technological improvement. However, we believe that it’s not enough to simply introduce modern IT systems and customised software to keep your business growing. Technology integration is just a small part of the necessary changes.
So what do you need to start a successful digital transformation strategy? In our article, you’ll find the answers as we overview the main digital transformation drivers and provide useful tips to follow on the way to digital transformation.
Digital Transformation Steps
Digital transformation is a step-by-step process. To succeed, companies implement new approaches to process management, look for modern custom software solutions, and keep an eye on strategic planning. This set of actions is also directed at better understanding the business potential and ways for future development.
Below are the four steps that we’ve identified for a seamless digital transformation.
Step 1. Define goals and growth points for your business
First of all, it’s necessary to define your business goals and objectives. Answer the questions: what do you want to achieve and what is your development focus? To answer these, you need to:
- evaluate your existing strategy;
- outline the directions of your company’s growth.
It will help to understand which segments need improvements and changes so that your business continues to develop and adapt to changing market conditions in the long term.
Step 2. Find a partner to help define a roadmap for development
Next, you need to determine a roadmap for service and product development. At this stage, you will need to find an agile software development team and a reliable Product Owner / Project Manager from the technological side. A software development team will help you to:
- correctly assess tasks;
- specify deadlines;
- plan teamwork.
By working with a professional Project Manager, you will get an opportunity to not just manage the creation of your bespoke software solution but also get a solid bridge between your company’s representatives and the agile software development team.
If you have a Product Owner / Project Manager on your business side, it’s great. This specialist will be able to convey your company’s requests, while the specialist from the IT side will help to find the optimal solution for your individual goals and objectives.
If you don’t have such a specialist in your company, no worries, but we highly recommend to involve one from outside then. For instance, at NEKLO we provide expert DevOps services. Take a look, we can help you to support innovation, address new market challenges, and continually improve the processes during your business digital transformation.
Step 3. Assess your business processes through an audit
At this stage, it is important to assess your business’ current state. This involves:
- Audit of business processes;
- Formation of target business operations;
- IT audit.
At this stage, you can turn to us again for assistance. NEKLO provides business analysis services to help bridge the gap between your current business state and emerging technologies.We will help to specify the development strategy and a reasonable digital transformation path.
Step 4. Continuously implement new solutions
After the analysis is done and the custom software development processes are finished, it’s time to launch your digital solution and trace how this type of digital transformation impacts your business.
However, we’re convinced that digital transformation is not a one-time initiative but an ongoing process. Companies need to keep moving to new levels as:
- the market changes rapidly today;
- audience demands are growing;
- new trends and technologies are being developed.
By constantly implementing digital transformation processes will definitely help to stay abreast (and ahead) of competitors and adapt to new conditions at a lightning speed.
Digital Transformation in Numbers, Trends, and Success Stories
The digital transformation for businesses today is no longer a matter of choice, but a necessity. Digitalization continues to rapidly replace traditional practices. Below we’ve collected the numbers that illustrate this fact as well as some vivid digital transformation examples to get you inspired.
Numbers on those “not ready” yesterday and evolving today
1. According to Accenture, 68% of companies in the world announced the first steps on the path to digital transformation, named their steps implemented, and even solutions that drive their strategy for development.
Almost 40% of companies claim they are ready to completely change the existing business model or to adapt it as much as possible to the prevailing market conditions if the necessary resources are available.
2. Based on the stat data published on the PWC website, 85% of enterprise CEOs that have embarked on an end-to-end or phased digitalization said they were willing to spend more time on the process 2 years ago, as “there was no clear reason to accelerate and competitive incentives remained stable.”
Now, most are convinced that the acceleration in any digital transition effort is obvious and critical to maintaining the sustainability of the business.
3. According to CBInsights, only 25% of the world’s companies have a clear understanding of the new digital touchpoints for business, market, and consumer. As the leading companies believe, today the software necessary for digital transformation has been upgraded and has become adaptive enough to open literally any opportunity. Even for newcomers on the market, no matter the industry.
Facts on the prepared for the digital transformation era in advance
Amazon Business is the best example of how a company can:
- transfer all customers in one gulp to personalized online service;
- study their priorities and wishes with the help of AI-based software;
- open “live” stores, but with a fully digitized self-service functionality;
- leave all the cons of offline trading and the competitors far behind.
Special attention should be paid to the “Amazon” B2B model, based on the “full-pool” principle for “digital clients”. It includes:
- free two-day delivery of orders worth $ 49 or more;
- exclusive smart price discounts;
- millions of products with a focus on individual recommendations;
- system integration purchases;
- tax-free purchases for specific qualified customers;
- common and affordable payment methods;
- automated order approval and reporting processes.
Plus, Amazon provides special services for business digitalization and recommendation cases for corporate clients. It is the success that is hard to repeat, but borrowing experience is a must.
In 2012, Audi shook up the global auto industry with a completely new way of selling cars – an innovative digital showroom concept called Audi City. The solution allowed customers to get acquainted with the entire catalogue of the Audi model range in stores located in the city centre, where the creation of large showrooms was impossible.
At Audi City London, in the first year after the transformation of the showroom, sales increased by 60% compared to the traditional Audi showroom, which previously occupied this site.
The Ford company demonstrated a specific, but important experience in resource optimization – it was completely restructured and reorganized into a kind of internal confederation of regional business centres and associated IT departments. All of them moved in the same vein, but with individual budgets for the implementation of optimal IT solutions, depending on their location and other factors. At the same time, Ford cut the overall IT budget by as much as 30%.
However, the goal was not to cut costs but to take the resources that were associated with maintaining fragmented and complex legacy systems and free them up for innovation. All these measures combined have made the company flexible in the market and brought the budget to invest in innovative projects that have received widespread worldwide recognition (Ford SYNC, MyFord Touch).
GE’s digital wind farm today is a unique adaptable wind power ecosystem combining turbines with the digital infrastructure of the wind power industry. GE’s previous solution, Wind PowerUp technology, has already been installed on 4,000 units and has helped to increase the profitability of each turbine from 10 to 15%. The new digital wind farm technology promised 20% efficiency gains that could benefit the energy industry for $ 50 billion.
The Glassdoor job-finding platform covers more than 450 thousand corporate clients in more than 190 countries around the world. The company used data analytics to research the US labour market. As a result, the assembled portfolio of companies with job offers surpassed the American market for relevant services by 115.6% as a whole.
The Lego company was close to bankruptcy in 2004, but risked restructuring through digitalization and focused its remaining resources on new revenue streams in the form of digitally promoted films, as well as mobile games and mobile apps.
In 2014, LEGO’s profitability was already almost 40%, and the revenue from the first film was about $468 million while the production budget made only $60 million.
This is the case when digital transformation helped not only gain a foothold in the market and increase sales but also imbued the specifics of consumption to ultimately reorient the business model to study the habits and priorities of customers. The company launched an analytics application to provide consumers with the best coffee and exceeded their expectations with the obtained financial results.
All of Nespresso’s digital initiatives are backed by a cloud-based direct customer engagement solution. It serves as an innovative platform with a complete sales service capable of handling the entire purchase cycle: price formation, pricing, and orders. All this allowed the company to penetrate deeper into new markets, scale and improve business performance with the expected financial return.
Where others have tried to win the competition with a standard mobile app, the company has built an end-to-end consumer platform based on a loyalty program. The key innovation is the Mobile Order and Pay application. This is a strategy focused on the client, not on service as usual. It aims to meet the basic needs of a particular consumer:
- Avoiding the queues;
- Convenient and familiar payment gateways.
Besides, the app collects and analyzes huge amounts of user data, allowing it to track customer habits and preferences. Combined with an extensive loyalty program, this approach has made Starbucks the market leader.
Digital transformation is not a one-time action. It is a systematic and constant digital development of a company. It is important not only to implement new tools and systems but also to align them with strategic imperatives, change approaches, create new business models that will allow you to benefit from the applied technologies and make effective operational decisions.
As a custom web application development company, NEKLO is ready to help any business willing to update and innovate its processes. In case you wish to digitize your business activity, contact us through the form on our website, and our specialists will tailor a digital transformation strategy right for you.