Digital transformation is the process of making established ways of working more efficient and effective. It’s not about building an entirely new digital product suite on top of your existing offering—digital transformation works from the inside out. By transforming the way your company operates, utilizing digital tools and information to make processes more straightforward and efficient, you can offer better experiences for your customers, faster.
What is digital transformation?
Many companies hear the words “digital transformation” (sometimes referred to as DX) and imagine creating an app to support their existing service or taking their retail business online. Ta-da! Digital transformation.
But an app or external digital tool isn’t enough to make your business competitive and change how you interact with your customers. The key is in the second word.
Digital transformation is a transformation of the way your business works. It’s about transforming your infrastructure with digital tools that revolutionize how you do business and interact with customers.
The importance of digital transformation
In a post-pandemic world, companies should be focusing on all digital opportunities for scalability and flexibility. As we’ve seen, an organization’s ability to quickly adapt to supply chain issues, changing customer expectations, and time to market pressures make the difference between success and failure. The stakes have never been higher.
But these changes have been a long time coming. As Dion Hinchcliffe, VP and principal analyst at Constellation Research, wrote in 2019: “The top IT executives in today’s rapidly evolving organizations must match the pace of change, fall behind, or lead the pack. That’s the existential issue at stake in today’s digitally-infused times, where bold action must be actively supported by out-of-the-box experimentation and pathfinding. This must be done while managing the inexorable daily drumbeat of operational issues, service delivery, and the distracting vagaries of the unpredictable, such as a major cyberattack or information breach.”
Hinchcliffe goes on to say that a seamless customer experience is “the most important discriminating factor for how a business will perform.”
Developing a digital transformation strategy
While the specifics of digital transformation will look different across organizations, there are four constants that leadership should consider when putting together a digital transformation strategy.
- Org Transformation
- Having your organization rally around a customer-centric approach is one thing; instituting the operational and process change to accomplish it is another. Digital transformation isn’t a one-and-done, and everyone needs to buy in to make changes that last.
- Move away from big releases and embrace continuous improvement. This process empowers you to correct customer pain points and release features that meet established needs—while looking ahead for market opportunities.
- Human-Centered Approach
- By setting up effective user feedback loops, you can pair data with business objectives to establish a multi-year roadmap based on evidence, not guesswork.
- Adopt and Integrate Emergent Technologies
- Data should be independent of your platforms to evolve existing systems and incorporate emerging technologies that align with positive customer experiences. Your teams should be trained to evolve your technology over time to align with your company’s strategy.
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The role of UX in digital transformation
Any digital project should always have humans at the center. The user’s experience (UX) is a non-negotiable consideration in digital transformation. Working this way ensures you’re building features, content, and functionality that people need.
Research centers the user experience as you work and is an ongoing, iterative process crucial to successful digital transformation. Understanding your users, being thoughtful about the things you’re designing for them, allowing your customers to have input into the process and letting their needs drive the innovation; building a culture of learning and collaboration that leads to better experiences for users and better business outcomes.
When researching, your team needs to answer two crucial questions:
- Who are our users?
- What problem does our application, product, or feature solve for them?
Implementing digital transformation across your organization
As daunting as the name may sound, you don’t have to start with an enormous overhaul when you’re thinking about implementing a digital transformation strategy. You can start small. Implementing a focused digital change in your processes can garner results that can fuel more extensive organizational changes.
Understand where you are now. Get the lay of the land and then decide what you want to build. Explore facets of your service design to understand your end-to-end process. Map your customer’s journey, how they interact with your business at various stages of the customer lifecycle, examine your digital (and non-digital) touchpoints to find sources of friction with your customers.
Where are the pain points and issues that tell you where to go and what to transform?
How your company benefits from digital transformation
Digital transformation makes your business more efficient and effective. By transforming from the inside out and utilizing digital tools and information, you can offer better experiences to your customers. It’s a process that builds over time and makes your organization more dynamic and ultimately more effective.
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