Why Digital Transformation Isn't A Fad!
If you are a manager, CEO or business owner, then you are likely to have heard the term 'Digital Transformation'. Over the past couple of years the phrase has become a catch-all that encompasses everything from setting up a website to opening an online store to a complete overhall of business processes. Whilst so many buzzwords have come and go, the phrase digital transformation has quite successfully stuck around, and has become something deeper than the terminology that came before (yes, that includes web2.0!). It's probably because digital transformation is much more about business strategy than digital alone.
In fact digital transformation now sits at the heart of our changing business landscape, and is at the heart of many new businesses. For example, according to the latest research by Forbes, 55% of startups have already adopted a digital business strategy compared to 38% of traditional enterprises. The results are clear indicators that businesses are beginning to take a digital-first approach. It's paying off too. According to the same Forbes research, start-ups are reporting an average increase in revenue of 34 %, with all enterprises increasing revenue by 23%. These are figures any business leader (in any industry) should be paying attention to. Unlike a few years ago, where this would be pinned on the role of websites and social media to reach new audiences, the reality is far more pragmatic (and potentially a bit more boring than memes). That's because much of the increased revenue has been generated because of simplification, increased efficiency and customer experience - i.e. digital transformation has made life simpler for staff and customers alike.
The truth is, it's no secret. You can see this around you everyday - from Amazon to Uber. Selling products and services remotely is not as hard as it once was. It's not just about Business-to-Consumer (B2C) businesses. Business-to-business processes have probably changed more in the background without us even noticing. If you work in a corporate business, you may have already have experienced at least some form of digitalisation in your procurement and finance departments, from electronic invoicing to submitting expenses via Apps. Whilst there is always resistance to change, the truth in most cases will have been the introduction of software and mobile tools is likely to have made everyone's jobs easier.
This is changing how we behave too. Every day we hear news of how much time people are spending online, for example The Telegraph recently reported a fifth of 16-24 year olds spend an average of 7 hours online a day. That's quite staggering when you think about it, but it also means that during that time they probably aren't looking up from their mobile phones for long enough to look at your shop window to remember your logo. It's no shock that millennials prefer to shop online, but it's spreading to every generation. It's had an impact on high streets everywhere, shops are closing down and nothing is there to replace them; well, not in the real world - in the virtual world it's a different story. This trend is only likely to get worse. For businesses everywhere it's a stark warning: get online or lose out to your competitors, no matter how big or small your business may be.
The lesson for leaders is that digital transformation is not something that can be passed over to the management team to deliver alone. Setting the strategic direction of the business is down to the leadership, and that includes the digital transformation strategy. Many businesses are already getting to grips with this, with research by Futurum finding in their recent 2018 Digital Transformation Index that over half of the senior executives interviewed (C-level other than the CEO) were actively leading their company’s digital transformation efforts, with nearly 50 percent said efforts are being led by CEOs or Board members. So even if you aren't quite there yet as a CEO, if you want to be a leader, you need to know understand how to deliver a digital transformation strategy because you may need to one day.
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