When someone mentions the Industrial Revolution, what do you think of? Are you imagining cities covered in coal fogs and gritty steel machinery packed into factories — or are you thinking of your own business in 2021?
In truth, we are all in the midst of the fourth industrial revolution — though the revolution today doesn’t concern coal, oil or nuclear power. Today’s revolution is all about the digital transformation. What does that mean, especially for your business? Read on to find out.
Digital Transformation Is the Integration of Digital Technologies
In the most general terms possible, digital transformation occurs when a company integrates technology into all areas of a business, which results in change to fundamental operations to include how the company delivers value to customers. Digital transformation also tends to involve a cultural shift within a corporation, as the integration of technology pushes younger methods of approaching problems and a distancing from more traditional business processes and practices.
While this general definition might be helpful in understanding the outlines of digital transformation, the truth is that every digital transformation will look different for every company. Integrating technology is an incredibly subjective process that requires intimate familiarity with all aspects of a business — from its existing structure and processes to its staff, products and target audience. Business leaders eager to start their own digital transformation should strongly consider enrolling in a digital strategy course to ensure they make the right technological choices for their company.
Typically, digital transformations begin with asking “Why?” In effect: How would integrating technology benefit this particular business? Some viable answers include:
Improving the customer experience. Technology can provide companies with invaluable insights into customer behavior and give customers greater access to company services.
Reducing internal friction. Many manual processes take too much time and effort, and differences in practices between departments can drastically reduce efficiency. Technology smooths all of this friction to make business move faster and better.
Elevating profitability. Though a digital transformation will cost more initially as the company adapts to new technological services, technology should reduce expenses and increase value over time.
Once that initial “Why?” receives an answer, business leaders can begin to select the digital technologies useful for accomplishing their goals. It is during this step, the designing of the structure of the transformation, that businesses begin to differ from one another. For example, physical retail companies stand to benefit significantly by adopting an ecommerce platform to sell their wares online, but service-oriented businesses have less need for a digital storefront. In contrast, there are some technologies that nearly all businesses benefit from. Cloud computing allows for the easy storage and management of business data, and cybersecurity is essential, considering that an inordinate number of businesses suffer cyber attacks every year.
No two digital transformations are identical, but there is one aspect of digital transformation that is true for every business…
Companies That Ignore Digital Transformation Are Doomed
As the 21st century has progressed, it has become increasingly critical that businesses adopt digital technologies, and the COVID-19 pandemic has proven that businesses lacking support from digital technology are not well positioned to weather economic storms. After a year and a half of health and economic crisis, businesses have fallen into one of three categories: failure, endurance and supreme success. The businesses that have not only survived but thrived had completed their digital transformation before the pandemic hit; meanwhile, overwhelmingly, businesses lacking digital technologies or insufficiently leveraging them did not fare as well.
The COVID-19 pandemic won’t last forever, but it will be a defining event for businesses in this century, not least because of how clearly it demonstrates the importance of digital transformation. Nascent businesses must build digital design into their business plans to meet the demands of an increasingly digital consumer base, and businesses that have survived the pandemic thus far need to hustle in the integration of digital technologies before their traditional models are thoroughly disrupted by something faster and better.
Your business might not immediately cease to exist without support from digital technologies, but it will endure a slow march toward obsolescence. The sooner you understand digital design and prepare for a digital transformation, the better.