Rohit Prabhakar

I build agentic revenue systems for Fortune 50 companies

Digital Transformation, Benefits, and Possible Trends in 2021

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Digital transformation means different things for each organization, and that’s why some organizations are in the planning phase, some in the middle of implementation and some are struggling with the very concept. This digital change is not limited to large organizations but small businesses and start-ups are also welcoming and adapting to the current changing market conditions to stay competitive. Technology has changed the way we interact, talk, meet, and change the way we work and this blog will discuss digital transformation, benefits of digital transformation, and some transformation trends to watch out for in 2021.

Digital transformation

The digital transformation for a business improves business processes, business culture, and customer experience by adopting new AI technology to meet changing business and market requirements. This change of business with new AI technology in the current scenario is known as digital transformation. A business needs to integrate areas within the organization – from tools to apps or Softwares, workflow, customer engagement, employee skills, etc., changing how companies operate in the modern world and delivering the best to its customers and stakeholders. 

There is no single technology or software for a business to move forward with digital transformation. Digital transformation is all about continuous improvement of the businesses processes, experimenting new ways of doing business, and adapting fast to stay relevant in this current digital world. In simple words, changing the overall business ecosystem to improve performance and efficiency of the organization is called digital transformation. 

Benefits of digital transformation

Digital Transformation

Increased efficiency

One of the main reasons businesses are opting for digital transformation is that it provides increased efficiency by getting rid of commute time, time spent on administrative tasks, and searching for information that can be achieved quickly with technology. This saved time can be used to complete other studies, which will result in increased customer service, better product quality, improved workflow, and information management. 

Increased customer satisfaction

The most significant advantage of using artificial intelligence and cloud computing has improved customer satisfaction as businesses have customer-specific information that can be analyzed to improve the products and services to serve better. One such example of digital transformation is on-day delivery, which is possible by analyzing consumer behavior and enhancing business to match the requirements.

Getting an edge over others

The businesses that have opted for digital transformation have already improved profits, and digitizing workflow has helped their business get an edge over those businesses that still follow traditional methods of doing work.

Some of the benefits of digital transformation for a business:

  • Saving valuable time by providing easy and quick access to information.
  • Protecting the environment by switching from paper to digital documents.
  • Easy access to information even from a remote location wherever and whenever.
  • Improved internal as well as external communication and increased collaboration at all levels in the organization.

Possible digital transformation trends to watch in 2021 

Digital Transformation Trends

In this digital age, businesses have started shifting their focus from the physical to creating a digital presence to remain future-ready and in front of their competitors. Some organizations are in the planning phase, and some started their digital transformation service. The pandemic has also helped the organization to realize the importance of digital transformation, and a wave of new working methods is introduced that have become new normal for businesses. Here are some digital transformation trends to watch in 2021:

5G technology

The pandemic has shifted the work culture across the globe. The need for faster connectivity has grown with work from home, video conference, and digital collaboration became an essential part of our lives. COVID-19 has increased our dependence on smartphones, tablets, and intensified the demand as workers left their offices in well-connected areas to suburbs and beyond, which are not well connected. 5G has become a crucial piece of organizations and they can’t bear to be disengaged looking at its futuristic advantages. The value of 5G connectivity increased as the whole world sees its direct implication on work, schools, and our homes.

Application Programming interfaces (APIs)

Cloud is one of the most popular digital transformation trends that companies have adopted to make consistent business improvements. Application programming interfaces (APIs) are becoming a crucial part of this transformation trend. APIs are actively assisting organizations that are opting to change old storage infrastructure to micro-services. These APIs are reducing the data storage needs and help in giving a collaborative experience. Opting for these advanced technologies will help them analyze one big digital piece of information stored in one place, helping them take critical business-decisions and increase their ROI.

Automation in workspace

The post-pandemic has increased the importance of automation, robotics and artificial intelligence, providing an increasingly cost-effective solution for both in-house and outsourced business activities. Automation is the only thing that will ensure an organization’s smooth working when the employees are unable to be present physically in the office. It gives the advantages of cost reduction, increased efficiency, more precision, higher customer experience, and process flexibility to a business, which is one of the crucial reasons why companies will most likely invest in this in 2021. This digital trend has gained momentum as businesses increasingly look for affordable solutions for both small and large organizations.  

Work from Home

Organizations like Google and Facebook have extended their work from home till mid-June, and many organizations, both big and small, are adapting to this new flexible work approach. Economies are gradually resuming, and employees are returning to their organizations; many organizations choose to permit remote work options for employees as a flexible work approach. WFH provides opportunities to save office space, equipment, supplies, and utilities as the employees work from a remote location. The other advantage of why this trend can continue even in 2021 is that it helps increase workers’ morale and productivity as they have their schedule to manage the work that can be monitored by using workforce management tools.

Final thoughts

The pandemic has given businesses time to think and analyze the possible future if the same trends will continue even in 2021. Organizations are searching for better ways and technologies that provide them an edge over their competitors and make their business future-ready. Post-pandemic time is going to be crucial for organizations as most of them will be in the transformation or adaptation phase under the new market conditions.

Definition of Digital Transformation, Digitization and Digitalization

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I came across three words related to transformation in the digital age; Digital Transformation, Digitization and Digitalization. These words were quite confusing especially Digitalization hence decided to explore the definition of digital transformation and real-life meaning. Here is what I learnt in the process and will love to hear your thoughts and feedback.

Digital Transformation

Digital transformation is the practice of leveraging emerging technologies to build new business systems, business models, consumer & employee experience, or to change current ones to address increasing industry and market needs.

Definition of Digital Transformation
Definition of Digital Transformation

Digital transformation goes beyond conventional systems such as distribution, marketing, and customer support. Instead, digital transformation starts and ends with the way you think about customers and the way you engage them.

Definition of Digital Transformation, Digitization and Digitalization

Since all of these words have “digital” in them, they must be the same. Wrong. These words define and describe three different things and are not interchangeable. Let’s take a brief look.

Digitization

Digitization is the transition from analog to digital. Not that long ago, businesses had paper accounts and ledgers to keep track of their activities and transactions. The business data was analogous, whether handwritten in ledgers or typed in documents. You dealt with physical documents, such as papers and binders, Xeroxes, and faxes, if you wanted to gather or share information. Digitization is the process of converting information into a digital format as per TechTarget

Another great example is our videos in VHS to CDs or DVDs and audio in cassettes to CDs and eventually MP3. Computers became popular, and several corporations began turning all those paper and physical documents into digital data archives. The method of transforming material from analog to digital is called digitization.

Digitalization

This one is very confusing for me at least. For some, it means Digitization and for some digital transformation.

As per my understanding Digitalization enables and improves business processes by leveraging digital technologies e.g. APIs, big data, cloud etc. Digitalization is not about changing the way you do business or creating new business models. It is about making everything quicker and easier now that the data is readily available and not stuck anywhere in a rusty folder in a file cabinet or a homegrown database server.

In the example of customer support, Digitalization has fundamentally improved operation by allowing consumer information simple and fast to access via the device. The simple customer support approach did not shift, but as scanning paper ledgers became substituted by inserting a few keystrokes on a computer screen or mobile app, the procedure of answering a query, looking up the appropriate records, and providing a response was far more effective. It has not changed how you provide support by using new platforms like social media etc.

As per Gartner Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.

Closing thoughts on Definition of Digital Transformation

Definition of Digital Transformation vs Digitization vs Digitalization

Digital Transformation, Digitization and Digitalization are all steps in the right direction at different times with different outcomes and value. While Digitization initiates the journey, Digitalization accelerates the business systems and makes it easier to access information. It is Digital Transformation that enables the end to end game that every organization needs to win it’s customers, employees and investors.

Recommendation

The companies who are just happy with Digitization or Digitalization are the ones that will not be able to compete and stay in business for the long term. Even if you are not competing with Amazon, Uber or Delta but your customers and partners are learning what good CX looks like and they expect the same from you!

Go Directly for Digital Transformation as Digitalization is partial and digitization is too basic. Digital transformation strategy and tactics will enable all you need for hacking growth via great digital experience and business models.

Leading Digital Transformation (Step 5)- Empower and Remove Barriers

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Removing Barriers

Image Source: NYTimes

The purpose of this stage is to overcome barriers to Digital Transformation. It is crucial to remove barriers to change, change systems or structures that pose threats to digital transformation. These barriers could be structure, skills, systems and supervisors. Three main best practices for removing barriers to change are:

Educate & Engage

When major changes are initiated we need to think about new behavior, skills and attitudes that are required in the new world. A good training with right kind of experience enables digital transformation in a big way. Always remember that encouraged and empowered employees make an enterprise win!

Inform & Negotiate

Every transformation will have it’s fair share of problem stakeholders. A huge category of such problem stakeholders can be influenced directly and indirectly. These stakeholders are not just against the change but also have huge organizational influence. There is no way that your change will be successful without including them in the process. Understanding the real needs/fears of such stakeholders is very critical as you try to negotiate with them to be the supporters of your change.

Every time after a successful negotiations I feel like this

Sucessful Digital transformation Negotiation

Ignore

Some of the problem stakeholders are completely against the change but don’t have huge influence on the organization. The best strategy for such stakeholders is to give them very high level information and keep them out of your routine. You may like to negotiate with such stakeholders but that may not be the best use of your time!

Related Articles:

8 steps to digital transformation

Leading Digital Transformation (Step 1) Creating Sense of Urgency

Leading Digital Transformation (Step 2) Build a Guiding Coalition 

Leading Digital Transformation (Step 3) Develop Vision & Strategy 

Leading Digital Transformation (Step 4) Communicate and Enlist volunteers

Leading Digital Transformation (Step 4) Communicate and Enlist volunteers

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“Change happens when it is done by the people and not to the people!”

communicate vision to enlist volunteers

Enlist Volunteers

In step 2 we talked about building a guiding coalition. Now is the time to take participation in Digital Transformation to new levels by enlisting volunteers. It is just like software moving from Alpha to a beta stage. The intent is to have more adopters who can participate, provide live feedback and become the change agents.

Raise a bigger force of people who are ready, willing and urgent to drive the Digital Transformation change. The other intent of this step is to make more co-authors of this Digital Transformation change. As more people will get engaged in the earlier stage hence they will become the true carriers of the vision and message. In order to expand use the power of communication.

Communicate Vision

The single biggest problem in communication is the illusion that it has taken place. -George Bernard Shaw

Communication seems to work best when it is direct and simple. Simple communication only comes through great clarity of thought plus courage to keep it simple. Even when this is a Digital Transformation All jargon and technical language must be avoided at any cost while you communicate vision.

Tip: If you are originally from technology background like me, this may be an area of improvement.

A picture is worth a thousand words

Well chosen words can make it memorable, even if it has to compete with hundreds of other communications for people’s attention. Always remember logic makes us think, emotion drives us to act. Emotion can also come from analogies, stories, or concrete examples that illustrate what success looks like while you communicate vision.

I am guilty of over communicating the technology infrastructure we plan to bring and invest into. Every time I did that I have seen faces in the room who leave without getting the vision of Digital Transformation.

Tip: Communicate vision in terms of business benefits and that too in a simple language that even a grandmother can understand. Analogy and examples are a great tool for that.

Metaphors have a way of holding the most truth in the least space. -Orson Scott Card

We should use all the vehicles available to communicate vision. The message should come from all different channels. Big meetings and small, memos and newsletters, formal and by the coffee machine interaction – all are effective for spreading the message. We should continue to do this repeatedly as ideas sink in deeply only after they have been heard many times. If you are a marketer, you very well understand how many impressions lead to conversion. It hardly happens with just one impression!

You and other key players should live the vision in real time. Everything that is being done by the key team should be aligned to the vision and strategy for the Digital Transformation. Even repeated attempts to communicate vision cannot help if you and your key team are not acting as per the vision and strategy. If there are any inconsistencies, those should be addressed immediately and communicated.

“Swallow your pride and always be ready to accept that you may not be right” – Your Truly

As Digital Transformation lead, I have sometimes avoided two-way communication as I was afraid of a stakeholder not adopting my vision. Over these years I have learned that two-way communication is always more powerful than one-way communication. Two-way communication may suggest sometimes that we are on the wrong course and that vision needs to be revisited. Swallowing our pride and reworking the vision or strategy is far more productive that heading off in the wrong direction or with a wrong strategy for Digital Transformation.

The more we elaborate our means of communication, the less we communicate.- J. B. Priestley

Previous Articles:

8 steps to digital transformation 

Leading Digital Transformation (Step 1) Creating Sense of Urgency 

Leading Digital Transformation (Step 2) Build a Guiding Coalition 

Leading Digital Transformation (Step 3) Develop Vision & Strategy

Leading Digital Transformation (Step 2) Build a Guiding Coalition

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Guiding Coalition

Building a Guiding Coalition

Assemble a diverse alliance of enthusiastic people with power, credibility and influence to think, design and support digital transformation. This alliance is what John Kotter refers to as build a guiding coalition.

It is a Coalition and not a Team for digital transformation

A coalition is a combination or alliance, especially a temporary one between persons, factions, states, etc . This alliance has a wide representation from
  • different silos/business divisions/departments
  • diverse background and different expertise
  • different organizational levels
The digital transformation coalition mostly starts small and becomes bigger over few months.

The coalition is to guide the digital transformation

This group should have the intellectual ability to design the digital transformation. The individuals should be able to understand the need for digital transformation. They should be able to help you create strategic vision. Members will share excitement with others and make them interested in this effort. They are the change agents that will help you enlist the volunteer army for the change.
“You win by working hard, making tough decisions and building coalitions” – John Engler

Perfect candidates for digital transformation guiding coalition

  1. Early Adopters: These individuals are opinion leaders who listen to new ideas and are open to trying them. They are socially connected in the organization and have credibility. They are key to adoption of digital transformation due to credibility and influence.
  2. Executive Stakeholders: It is critical that one of the early adopters is from the executive team. Positional strength besides credibility and influence is must for digital transformation success.

Avoid these

  1. Don’t engage Innovators in this group. They are the ones who are first to embrace the change, are bright, enthusiastic and open to new ideas. Unfortunately they lack social influence and credibility. Their inclusion in this step may lead to quick death of digital transformation.
  2. Avoid late adopters or laggards until you have created few wins.

This post is part of series of post on Digital Transformation.  You can read Step #1 of Digital Transformation at https://rohitprabhakar.com/sense-urgency-digital-transformation/

Leading Digital Transformation (Step 1) Creating Sense of Urgency

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Sense of Urgency

“Sense of urgency is not the natural state of affairs. It has to be created and recreated.”
– John Kotter from his book “A sense of Urgency”
 
Leading Digital Transformation at any level requires an ability to create an atmosphere of urgency. An atmosphere that can motivate and keep the team focused on a daily basis. Only in that atmosphere digital transformation becomes an urgent and highly needed change.

Why to create sense of urgency?

Without a sense of urgency, desire loses its value. — Jim Rohn
 
It will spark the initial motivation to get things moving and then keep the momentum going for digital transformation.
 

Who should you work with to create sense of urgency?

Ideally you should work with the top leadership and then it should come from top to bottom. This is only possible if currently a tornado like situation exists in your company.
 
Realistically, you will have to work with early adopters both at your level and some at senior leadership level. These are people who:
  • Trust you and your motives,
  • Willing to understand your vision for digital transformation to some extent,
  • Willing to work with you and
  • Have a good influence inside the organization.
I will talk more about this group in my post next week.
 
Please don’t go overboard and try to convince everybody. Start with creating sense of urgency with few who are critical and important to your digital transformation change.
 
Objections, low trust and demotivation are common to this phase. During this phase I hear things like:
  • Someone already tried this few years ago and they failed. Good luck!
  • This is going nowhere as we have seen similar things many times.
  • This organization will never do it that way.
  • We are already invested in IT and I cannot understand why we need a digital transformation.
Thanks to such advisors as it helps me to identify them as not early adopters.
 

How to establish sense of urgency

(all examples are from digital transformation of marketing use case)
 

Only crises, potential crises or big opportunities can help create a sense of urgency.

 

Identify crises/potential crises and use data to define the threat:

Here are some of the examples that you can focus on:
  • Examine market and competitive realities: Your competitors may already focusing on digital transformation. Best place to get this data is:
  • their job sites,
  • competitive analysis platforms like SimilarWeb,
  • SEO platforms like BrightEdge,
  • conferences where your competitors may be presenting digital insights e.g. MarTech
  • Vendors in your industry as they may be also serving your competitors.
  • Risk of disruption: Do I need to talk on this topic?? A good book on this topic is Digital Disruption: Unleashing the Next Wave of Innovation by James McQuivey
  • Understand and quantify the risk of privacy or legal lawsuits: At large companies organizational and data silos may lead to vulnerability from privacy lawsuits. The case for digital transformation is worth alone just to handle this risk especially if you are in the European Union.
 

Identify major opportunities and define opportunity using the power of data:

The best place for marketing teams is to start with an opportunity assessment of all your digital properties. It is easy and can be achieved in 3-6 months. Tag all your digital properties with same analytics tag so that you can understand:
  • How the traffic flows within and outside your digital ecosystem
  • Type of customers/prospects that frequent your digital ecosystem
  • Identify some high value prospects
  • Identify the associated opportunity if you are able to properly engage them across all digital properties
I have seen this analysis work wonders and can alone help you get the buy in for digital transformation from the top executives.
 
Other sources of data for identifying and defining the opportunity are surveys/voice of customer, cross sell, up sell, cost savings from platform, agency spend etc.
 
Try to focus on opportunities that needs short timeline and has a strong ROI. I will talk more about this when I write about generating short-term wins.
 
This article is Part 1 of the 8 posts that I promised to publish in my recent post:

8 Essential steps to digital transformation

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I wish we could just call it business transformation but in the world full of buzzwords and keywords I will also call it digital transformation. Digital transformation is just a business transformation in the digital age. Some also call it digitization and digitalization (Read how they are different).

Leading Digital Transformation

  Digital transformation is less about technology but more about the transformation of business models, customer experience, employee experience and the overall business. The major success of the digital transformation projects is dependent on how well the organization adopts digital culture like Agile, Data lead decision making, failing fast, customer centricity and adoption of emerging technologies like Machine Learning, RPA and other branches of Artificial Intelligence across all departments.

The following is a framework that I have been successfully using to bring digital change for over a decade at large organizations:

  1. Create a sense of urgency
  2. Build a guiding coalition
  3. Develop a vision & strategy
  4. Enlist a volunteer army
  5. Enable action by removing barriers
  6. Generate short term wins
  7. Sustain acceleration
  8. Institute change

Some of the key points related to digital transformation success that senior leaders like CIOs, CTO, CMOs, CDOs and most primarily the CEO should keep in mind are: 

  1. Transformation of customer and employee experience will eventually lead to big business growth in revenue, profits and retention.
  2. Think about Customer Lifecycle Experience and not just Lead to Cash
  3. Don’t limit this to just Technology Transformation like the transformation of backend systems like ERP, CRM alone. Technology transformation should enable digital technologies in every part fo the organization.
  4. You must involve experts to not just produce Digital Strategy but also the execute the transformation
  5. Pricing and servicing models must be analyzed, simplified and revamped to support transformation at scale.
  6. Business processes must be minutely looked into to make execution easier and enable continuous optimization
  7. Leading indicators on Digital Transformation should start becoming visible in 2nd year while ROI of the investment should start in 3rd year for most programs.
  8. The digital transformation that is siloed to Marketing and Sales will never lead to long term business growth
  9. Always keep Amazon effect in mind
  10. Embrace long term mindset as most digital transformations are long term projects. At any organization bigger than $1Bn in revenue I will expect this to be 3+ years of effort.

Few years ago I was introduced to John P Kotter’s book on leading change by my mentor Mr. Andy Burtis who was Mr. Kotter’s student at Harvard Business School. Since then I have adopted his format as it matches what I have been already practicing and gives a better structure to my approach. If you like reading books, I highly recommend his book “Leading Change”.  

Leading Change by John Kotter
leading change by John Kotter