Digital Transformation: Can You Afford to be Left Behind?
There’s been a lot of talk about digital transformation for some time now, but do you really know what it’s all about? Too often buzzwords start to be used without people fully understanding what they mean – and what the implications might be for their business – so let’s start with some basic definitions.
What is Digital Transformation?
Digital transformation is a process of profound change within a business, aimed at maximising the opportunities presented by digital technologies in a strategic way. A key element of business transformation is Business Process Management (BPM), which involves taking a systematic approach to making working practices more efficient and adaptable. What it boils down to is leveraging technology in such a way as to make your business efficient and, perhaps more importantly, agile in the face of change.
Arguably, underpinning the whole concept of digital transformation in the 21st century is the Internet of Things (IoT), which utilises internet connectivity to allow ‘smart’ devices to talk to people, applications and each other.
Winners & Losers
Let’s look at some examples of businesses that got digital transformation right … and wrong.
Buy-in to digital transformation has to be led from the top, and acceptance throughout the organisation is fundamental to its success. Take Kodak: the company was at the forefront of digital technology, and by 2003 it was one of only five major players in the digital camera market – and yet it was losing money.
Kodak’s main problem was that it was resistant to change. The company was so stuck in the old mindset of selling consumables that it couldn’t even begin to fathom how to leverage the opportunities presented by the new digital technology – one that it had itself helped to create. Instead of transformation, there was stagnation … and then bankruptcy.
Not too dissimilar to Blockbuster Video, which reacted far too late to the rising popularity of online video streaming services like Netflix, stubbornly standing by its in-store rentals and DVD-by-mail business model until it inevitably collapsed into bankruptcy.
You might have expected companies like Kodak and Blockbuster to be ideally placed to take advantage of digital transformation and innovation. You might also have thought a more traditional company – like Burberry – wouldn’t be. And yet Burberry turned a strategic process of digital transformation to their advantage, having pursued an eight-year process prior to posting record profits in 2014.
Digital technology was leveraged throughout Burberry’s entire business, from supply chain to store layout, with digital initiatives instigated and overseen by chief executive Angela Ahrendts, prior to her departure to become head of retail at Apple. And Burberry aren’t the only luxury brand to have embraced digital transformation – Harrods and LVMH (Louis Vuitton / Moët Hennessy) have taken similar steps.
Business Process Optimisation
If that’s enough to get you thinking about how you can benefit from a process of digital transformation in your business, then a great place to start is with your document management. It stands to reason that it’s faster and more efficient to call a document up digitally than to go to a dusty basement and search for it. You won’t have the headache of remembering to put it back in the right place again afterwards, either – a paperless system will take care of all that for you.
If you’re interested in taking the first step towards evolving your business processes and workflow, please get in touch with our expert consultants who will be only too happy to offer no-obligation advice and suggestions.