Digital transformation can be traced back to the 1970s when businesses realized they could use computer-related designs and manufacturing to transform their course of action. The digital transformation process has passed through various phases to reach where it stands now. It started with using computer programs and applications in business activities, followed by enterprise resource planning in the 1980s and customer relationship management in the 1990s. E-commerce and online banking then became popular in the 1990s and social media emerged in the mid-2000s. Businesses initiated digital transformation to ensure an excellent user experience.
Difference between Digitization, Digitalization, and Digital Transformation
Digital transformation is the process that integrates digital technologies in all areas of businesses to transform the ways they perform and interact with customers.
Digitization refers to converting data, texts, pictures, and sounds into digital form. Previously, businesses stored and processed data on paper, which took a lot of time and effort. Additionally, editing and sharing the data with colleagues and potential clients took a lot of work. Converting the data into digital form has made the process much easier.
The data, text, pictures, and sound that we digitized in the former step can be processed by the computer called digitalization. It makes processing the available data much more convenient as it will be just a click away. Digitalization does not change how businesses work and perform. It only makes it more convenient to utilize the information. There is no fear of losing the data; it can be easily retrieved with clicks and organized correctly. With these advancements in technology and conveniences, it provided people started to look for new ways in which technology could be utilized.
Digital transformation entirely changed the course of action in which businesses performed. In the digital transformation era, business firms took a step back to rethink and re-plan the course of action for businesses. It included everything from data management and business planning to customer interaction. We live in the digital transformation era, so it is easy for us to comprehend how technology is reshaping our lives.
4 Main Areas of Digital Transformation
There are four main areas of digital transformation which are:
1. Process transformation
Business transformation is not an overnight process, and there is no one size fits all approach. To transform your businesses, you first need to identify the goals and objectives you want to achieve. By identifying the objectives, you can design a strategy that may expedite your journey toward your success. It also enables you to find the right solutions that work for you and your business and monitor your success.
2. Business Model Transformation
As mentioned earlier, identifying the goals and objectives is the most vital part of success in your business. The business and corporate world is continuously changing and evolving. Business setups must transform their models and working strategies to stay atop the graph. It means creating new products, plans, and pricing that match the current trends. If businesses do not upgrade their products and strategies, then soon, there is a chance that they will become obsolete.
3. Domain Transformation
Domain transformation refers to the transfer of data and operations to the cloud. Most organizations and businesses are looking for ways to transfer their data to the cloud because of its storage capacity and improved data security. Before moving data to the cloud, organizations first have to evaluate whether the applications work well in the cloud. There also needs to be a proper mechanism to transfer data to ensure that no data gets lost during transfer and is safe and secure.
4. Cultural Transformation
One main area of digital transformation is cultural transformation which is also the most difficult to achieve. With the integration of new technologies in the business, it is also essential to change and transform the work culture. Culture is the set of beliefs, behavioral patterns, and norms that takes time to change. Organizations need to be dedicated enough and patient to witness the long-lasting transformation in their work culture.
3 Components of Digital Transformation
There are three main components of digital transformation:
Process Optimization
Optimization is an essential component of digital transformation. It mainly involves the IT sector modernization. Optimizing the technical and non-technical processes allows business workflows to be smoothened and made more efficient.
Focus on Customer Experience
The idea of digital transformation revolves around the optimized customer experience. Digital transformation will enable customers to use the websites and applications of the companies, make purchases, and give valuable product feedback. Around two-thirds of companies compete based on customer experience.
Empowering Employees
Digital transformation allows employees to the maximum. It constricts their manual and tedious labor and transforms it into more efficient and speedy execution, which also takes less time and effort. It also enables employees to deal with customers more efficiently.
Top Trends in Digital Transformation
Trends continue to change and shift with the upcoming and more advanced technologies. Here are the top three trends adopted due to digital transformation:
Hybrid work
Hybrid work has become a leading trend in the post-pandemic world. Organizations offer employees the ability to work on-site and from the comfort of their homes, or any location of their choice. It has only been possible due to digital transformation.
Intelligent search
Intelligent search is also called natural language, cognitive, and AI-powered. It enables the users to retrieve information or data from any source and locality. It has made knowledge sharing and data sharing for the workers, especially in hybrid settings.
Customer Data Platforms (CDPs)
The primary objective of digital transformation is customer satisfaction and excellent customer experience. Companies have started using different software to achieve this purpose. Customer Data Platform (CDP) is software that collects the data of its customers from many sources and organizes it into a single and coherent view of every customer. Various types of data, including behavioral data, transactional data, and demographic data, can be gathered using this software. The information collected eventually aids businesses in making decisions and making amendments accordingly.
Digital transformation is a modern necessity that enables organizations to collaborate more efficiently using appropriate digital tools. Harvestr is one of those tools where different teams within the organization collaborate to build successful products.