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Over the past decade, we have seen a huge influx of applications and digital products come to market that aim to streamline existing services, departments, companies, or even entire industries. One of the primary goals of these products is often to improve the customer experience and, in turn, gain the upper hand with competitors. Another important goal is to make processes more efficient, effective, and often more profitable. This wave of digital transformation is already producing exciting results for those embracing it and is perhaps the biggest business threat currently facing those who have yet to embrace it.
You’ve probably heard a lot of talk about digital transformation (and disruption) but it’s more than just a buzzword in 2021 — it’s a modern-day reality. But what exactly is it and how can you begin to implement it in your organization?
Digital transformation is a business mindset that places a focus on using technology to improve services or workflow. It’s important to distinguish this definition from that of digitization, as the two are often incorrectly used interchangeably. Digitization is the act of turning existing products or services digital, as we have seen so many businesses do throughout the COVID-19 pandemic. Digital transformation can include digitization but focuses primarily on evaluating systems and services with a digital-first mindset to see where improvements can be made.
Digital transformation should be front of mind for every organization for one simple reason: competition. If you’re not using a digital-first approach, odds are you will eventually be replaced by a competitor that is. Digital transformation has the capacity to help you scale, improve workflow, remove errors, and add value for your customers, donors, and team members. Organizations that fall behind, or grow complacent in this regard, are at risk of losing market share or becoming obsolete in the face of advanced competition.
No industry is immune from the need for digital transformation; it is the rule and not the exception. To see an example of this, we can look towards the wonderful world of finance. Prior to 2014, customers looking to invest had the option to use the services of their bank or a financial firm. Then came transformative startups – two great examples are Wealthsimple and Robinhood – who made this process simpler, faster, cheaper, and easier for their customers. Now, banks and firms who grew complacent in their offerings and over-confident in their market share are left scrambling to find ways to offer comparable services for their clients. Even traditionally “old-school” industries like law are beginning to see threats emerge in the form of apps like Willful that allow users to create legal documents without a lawyer. The pace of digital transformation will vary between industries, but its importance never does.
Look ahead and predict how you may be disrupted by technology and find opportunities for innovation in the current version of your organization.
Digital transformation is often an idea that needs a champion: someone who can rally decision-makers behind them and fundamentally buys into the belief that digital is the top priority – and a disruptive, necessary medium. Do you want to be the disrupted or the disrupter? This worldview and mindset matter, as does a true belief that you must continuously change and improve to remain competitive.
Once you have this internal champion for digital transformation, it’s time to create a plan and make it happen. We find that breaking this process down into phases makes it more manageable:
Take a step back and look at your organization from a macro level. How do you deliver your products and services? In the future, how might this change? Look ahead and predict how you may be disrupted by technology and find opportunities for innovation in the current version of your organization. Try not to get hung up on things like budget or feasibility in this stage — those can come later. For now, you’re looking for big picture items that have the largest potential for digital disruption. Think: what digital-first version of what you do would scare you if it came to market?
Complete a gap analysis to connect the dots between your current state and your digitally transformed, desired end state. What needs to change for your organization to transform? This requires vision, analysis, and refinement – but by doing so, you can determine what steps need to be taken to help you get from point A (where you are now) to point B (where you want to be). These steps become your rough, multi-phase plan for digital transformation. Don’t forget to rough out business cases, finances, in-house capacity, etc. so that you can budget for external resources, new hires, technology costs and the like as needed.
The final phase in this process is to begin the implementation of your digital transformation plan. Breaking this process down into phases can help to ease risk and financial pressures while making the internal process more manageable. Digital transformation does not have to totally upend your current products and offerings, either. It’s a good idea to start by assigning a team to test drive a few select products/services and take it slow. Once you see what works you’ll have a better idea of where your time and energy are best spent.
Digital transformation is less of a series of prescribed actions and more of an overall mindset shift as an organization. Your efforts will require ongoing collaboration and active listening to be successful. You may have a vision in mind, but you will need to test the assumptions and versions of that vision with your existing or new client base and team. After all, no one can predict the future — validating predictions is a worthwhile group effort. Your internal team will be a valuable resource to lean on for ideas and feedback as you work through your plan and try new things.
Remember that this process is continuous; you will need to constantly evaluate your organizational processes and products to look for weak spots. The way we see it, digital transformation is a cornerstone of the leaders in their respective fields – and less risky than sitting on one’s laurels, hoping past successes will continue unchecked into the future. The ideas that come out of a disruptive, digital-first mindset will be the ones that carry your organization to future success.