Digital transformation has been and always will be about innovation. After the dot com bubble of the 1990s, businesses had to re-visit their growth strategies. Before then, growth strategies had a relatively simple design. They typically focused on market penetration, consolidation, and adjacency growth -- in that order. Simpler times had simpler approaches. Today’s markets are far more advanced. Consumers are well aware of marketing techniques, and the average American person encounters between 4.000 to 10,000 ads every day. These numbers far surpass pre-1990s advertisement statistics, mainly because people are now surrounded by technology at every moment of their days. What does this mean for the future of businesses? Growth will need to come from more than just a three-step strategy, and any success will have to include a digital transformation component. Digital transformation does not have one set pathway -- and must have far more than three steps -- because technology is so diverse. Therefore, getting started with a successful digital transformation campaign should always begin with an evaluation of company goals.
The Different Facets Of Digital TransformationThe term “digital transformation” can be confusing. It suggests a linear transformation -- one with a set starting point, one-way track, and single finish line. Instead, digital transformation can encompass one or several of the following components. Business Process transformation refers to the change that takes place in your company’s technical assets. This might include advancing data, analytics, machine learning, and other business technology. At surface value, this seems like the right place to start -- technology evolves to become more user-friendly, provide better customer retention statistics, and increase the probability of profit. However, since technology has so rapidly grown over the past decade, the changes made to business processes will likely be more intricate and shorter-lasting. So, while business process transformation is beneficial, it isn’t always the best place to start. Business Model transformation focuses on changing an industry’s nature rather than just the cogs in the industry’s machine. For instance, casual dining restaurants like Olive Garden and Outback Steakhouse started curbside delivery years ago and eventually added apps into the equation. 2020 saw a noticeable rise in app-oriented curbside delivery, for obvious reasons. While app-ordered meals are part of digital transformation (on the business process side), they aren’t changing the nature of the delivery. We could instead look at Airbnb or Uber for business model transformation, who changed the very nature of travel and hospitality to better fit with Millennial culture and values. Domain transformation goes one step beyond changing an industry. It asks an existing company to branch out into a different sector, changing the business entirely. One excellent example of a company that embraced domain transformation was Google. Google, of course, has been wildly successful for quite some time in the tech industry. However, their foray into phone manufacture highlighted the company’s technical prowess and opened them up to new areas of revenue. Cultural or Organizational Transformation involves taking a dying industry and re-examining the organizational values to fit with the modern consumer. Kodak is an excellent example of this type of transformation. They were and still are the top name in photography, even though the need for physical film is almost obsolete. Today, even though nearly everyone has a camera in their pockets at all times, Kodak is still used by aspiring and professional photographers alike since Kodak expanded its industry to include and transform the nature of digital photography. As you can see, there are several different ways a company can shift its focus and maintain a successful digital transformation strategy. Once your business is at a point where digital transformation is imminent, where do you go next?