Stages of Digital Transformation

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Most businesses are hesitant to invest in digital transformation without knowing whether the investment will be worthwhile. Even so, when done strategically, digital transformation can streamline business operations and improve revenue in the long run.

Speed is the ultimate driving force that modern organizations bank on to gain a competitive edge, penetrate new markets, and sustain market leadership. That said, the digital transformation journey involves multiple stages of development. Implementing technology in your business processes alone doesn't qualify as digital transformation. You need to retool your business's entire operational workflow to attain digital transformation. This post will walk you through the digital transformation steps.

But first, a quick definition of what digital transformation is.

What Is Digital Transformation?

Digital transformation refers to the realignment of technology or new investment in technology, business processes, and models to drive value for employees and customers to effectively compete in the ever-changing digital landscape.

A digital transformation initiative can require the examination and reinvention of all aspects of your business, from organizational charts to employee skill sets, to workflows and supply chains, to value proposition to stakeholders and customer experiences.

A successful digital transformation can yield ongoing business benefits: It builds the skills and infrastructure needed to take advantage of the rapidly evolving technologies that can confer a competitive edge. Digital technologies and processes also enable businesses to adeptly respond to the current and evolving customer demands.

Simply put, digital transformation positions businesses to thrive in a future where technology is the primary economic driver.

Six Stages of Digital Transformation

According to Brian Solis (principal analyst at Altimeter who studies digital technologies and how they impact businesses and society), digital transformation is one of the most critical trends for businesses today. He further states that organizations would have to go through the following digital transformation phases in their journey:

1. Business as Usual

In this first stage, businesses continue operating the way they've always been operating–without insights into their customers' desires and perspectives. They follow a tried and tested method with no room for experimentation. They do this because of a rigid mindset.

An excellent example of this is Blockbuster and Netflix. Despite the popularity of Netflix becoming apparent, Blockbuster refused to switch to an "as a service" model and was therefore eventually pushed into obsolescence.

To transform your business digitally, you'll need to move away from the rigid mindset and embrace a flexible approach.

2. Present and Active

At this stage, businesses have recognized the need for digital transformation and may even be experimenting with various technologies to bring themselves even further along this path. Even so, their efforts aren't organized and various departments/business units are approaching the problem in different ways. Unless a business develops a sound strategy to move from the chaos to a more streamlined approach, the likelihood of its digital transformation bearing fruits is minimal at best.

Your strategy should focus on handling various touchpoints and improving specific business processes to enhance the effectiveness of your business during this stage.

3. Formalized

Upon moving to the formalized stage, your willingness to experiment with new technology increases to the point of it becoming almost intentional and habitual. You also start making bolder decisions that could transform your organization. When experimentation becomes habitual, you'll tend to conduct them more confidently, leading to a higher success rate. You might need executive support at this stage to get all the resources you need to complete this stage of digital transformation.

Keep in mind that it's at this stage that you may run into roadblocks created by company culture. To move past this, adjustments should be made to the company culture.

4. Strategic

Once you reach the strategic stage, it means that you have managed to overcome the bottlenecks created by executive buy-ins and entrenched work culture, and you've moved towards developing a strategic roadmap. Ensure that you factor in all the things that could hamper your progress towards success.

Individual groups and departments have recognized the power of collaboration and are sharing actionable insights that can benefit the business as a whole. At this stage, investments are planned, roles are defined, and tasks are assigned accordingly.

5. Converged

Businesses that have made it to this phase of the digital transformation process have developed a specific, targeted team of innovators tasked with guiding the business down the path of digital transformation. Ensure that your team focuses on both the organization's and customer-centric goals. They should also manage business processes accordingly.

At the converged stage, a new organizational structure starts to emerge—expertise, roles, processes, models, and systems that support transformation have all been set in place. You are all set to transform your business digitally and reap the benefits this comes with.

6. Innovative and Adaptive

This is the last stage of the digital transformation process. Here, your efforts start to bear fruits. Business executives see the benefits of digital transformation and agree that change is the only constant. It becomes an integral part of your business—they develop an entirely new ecosystem that identifies trends and acts on them with the help of technology.

Initially, the new ecosystem may be limited to a few business processes, but with time it will be implemented at a larger scale across the entire organization, offering insights that enable businesses to make informed decisions and take the right actions at the right time.

Conclusion

One of the biggest challenges businesses face in their digital transformation journey is the rigidity of business toward changing their company culture. To remain competitive in this highly competitive world, businesses need to embrace technology. Businesses that follow a proactive approach when developing new technology not only survive but also thrive in today's dynamic world. Collectively the above steps serve as a blueprint to guide businesses towards a purposeful and advantageous digital transformation.

Need More Insight on Digital Transformation? Techendo Can Help

For more information on digital transformation and insights on what measures to take to get the most out of your digital transformation initiatives, contact us today.

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