How Should You Prepare Your Organization for Digital Transformation?

Every organization in the business world, irrespective of the industry, has understood that they need digital transformation in their business model to survive and thrive in the cutthroat business environment. Digital transformation will help businesses not only produce better and more but also sell more. Digital transformation opens up the gates of efficiency and volume sales for the business. Companies can digitally transform by −

  • Selling their goods online

  • Ensuring that they can hire and make the employees work from across the globe and thus gain the best talent and save up on operational costs.

  • Produce more and better with technology and automation.

  • Can get rid of manual and tedious tasks that require no thinking, among others.

  • They should expand their target audience and market their products better.

In this article, we will be describing the various steps that a company should take to ensure that the organization is ready for the digital transformation of business and some failure cases where organizations were not able to adapt to the digital transformation because of a lack of planning and understanding. 

Digital Transformation

Simply put, digital transformation means ensuring that the organization can eliminate time-consuming manual labor and adapt to changing technologies. Companies are going digital across all four pillars of the marketing mix, i.e.

  • Product − ensuring mass production of goods because of automation and digitally transformed goods

  • Price − determining the price through consumer data, competitor data, and other readily available factors on the internet

  • Place − Applications like Flipkart, BlinkIt, and Amazon has come up with platforms ensuring that goods can be transferred from storage units to consumers’ doorsteps.

  • Promotion − digital mediums like social media platforms, websites, browsing platforms, and others

Among the various steps that businesses should take to prepare for digital transformation are

  • Alignment of business strategy and digital transformation − Companies should go for technological solutions that are aligned with their business strategy and requirements and not the ones that are the latest or most trending. Most businesses fail in their digital transformation efforts because they are unable to achieve this alignment. For example, if you are a medium-sized organization with around 2000–5000 employees altogether, it does not make sense for you to have different software for payroll, recruitment, learning management systems, and performance management. These are all the functions of the human resources department, and one application with the basic features can help you sail through, but if you are a big organization like Tata or Reliance, you need to have different systems for all the different functions because of the sheer volume of employees working in the organization.

  • Define your business problems and issues − Before you begin looking for a market solution to assist your company in becoming digitalized, you must first decide on the aspect. Which aspect of the business do you want to digitally transform, and what will be the impact of the same on customer experience, the day-to-day operation of the business, and the working of employees? For example, if the company wants to bring in the chatbot system for customer support, some relevant questions the company can ask itself could be, "Approximately how many customer inquiries does the company get on a daily basis?" Are these inquiries silly or something more complicated? Will a system that helps with basic query resolution reduce the number of inquiries the customer support executives get? Would I have to remove certain staff, or can I stop hiring for this team after the installation and others?

  • Be aware of poor processes − Before digitizing, it is important for the business to understand the problems that digitalization will solve and, along with that, identify the malpractices that were practiced previously. If the company fails to get a helicopter view of the workings of the business, the wrong processes will snowball, leading to myriad poor practices being followed and a lot of corruption in the system.

  • Champions of Change − It is time to identify resources who are eager for change and want to be a part of it. The organization will get a lot of lash back when it has to decide to change because people do not like change. They may revolt in terms of lesser productivity, finger-pointing, and others. Here, the companies have to ensure that the operational employees are ready for change and are adapting to it. It is very critical to the digital transformation journey of the company.

  • Choose wisely − It is not recommended for organizations to digitalize completely. Companies should focus on gradual changes. digitalizing one aspect and then another. This will ensure that employees do not feel lost, and they can understand the difference that digitalization is bringing and come into support of it. Selective choosing will also ensure effective utilization of the money involved, and this will also ensure that the digital applications integrate with each other.

  • Regular coaching and training − Not every individual is tech-savvy and an internet buff. For the successful implementation of the digitalization process, it is mandatory for the company to provide employees with training sessions. Regular training sessions to refresh memory and help employees better utilize resources will ensure productivity. Employers can also ensure that employees have assistance while adapting to technology in order to sail through transformation.

  • Corporate digital awareness − companies would also have to conduct awareness workshops regarding the various privacy issues, data breach issues, and phishing issues that the employees might face while working for the company. Cyber and data security is very critical for the business, and employees must realize the importance of the data that they have on their laptops.

Companies That Failed in the Digital Transformation

  • Hewlett-Packard (HP) − the company is famous for its iconic logo on laptops, desktops, printers, and others. The company wanted to have a unified ERP system for its work. It was estimated that the project would take three weeks to complete, but the company lost $160 million due to lost revenue and delayed orders. What went wrong here is that the company was not able to sync its old data into the new system and had no manual way to dispatch the orders from the old system to the consumers.

  • Hershey's − This is an America-based brand famous for chocolate syrup, cakes, cookies, and other delicacies. In 1996, the company wanted to digitalize its supply chain management, and it was estimated to cost them $120 million. The leadership pushed the operator to complete the entire digital transformation process in 30 weeks when the original time was 48 weeks. In order to be on time, a lot of tests and systems were compromised, and as a result, the company had to bear a loss as revenue went down by 16%, $100 million in orders were left unfulfilled, and share prices went down by 8%. 

In both failed cases, the company was not able to plan better. They skipped important steps of the digital transformation journey and had to bear unthinkable losses. They not only lost money, but they also created a toxic working environment for their employees. Companies have to set their goals before deciding upon digital transformation and also align them with their business needs. What works better is not what the leadership thinks but what the frontline operational workers think.