The use of digital technologies in business has a long history. At the same time, the approach has changed over time, and with it the form of implementation of new technologies.
The challenge: similar terms with different meanings. For example in the prime example of digitization vs. digital transformation. A historical digression:
Digitization of data (digitization ) The essence of digitization is simple: the transfer of information from paper documents, as well as photos, video recordings from an analog to a digital format.
Automation. Their purpose is to organize both convenient storage and simple information retrieval, as well as quick data exchange between employees. The focus is on improving process speed and reducing paper costs – in the sustainable service of the environment. Not least for the consolidation of data in one system: Many ERP systems ( Enterprise Resource Planning ) work according to this principle.
Digital business transformation: Digital transformation is a much more complex concept than digitization and automation. Once the company has switched to electronic documents, digitization is complete. Do all employees use the introduced system? Then the automation was also successful. The digital transformation is not an easy exercise, because not only new technologies are required here. Rather, the digital transformation also means the development of a restructuring of the company ‘s activities – and their implementation. With this reorganization, the company should be able to react quickly to changes and adapt flexibly to new circumstances.
Prerequisites For Digital Corporate Transformation
During the pandemic, many shops had to convert to online shops almost overnight , or restaurants suddenly had to master the art of home delivery of groceries. These are good examples of how a company can get creative and discover new revenue streams instead of passively waiting for the pandemic to end. That doesn’t sound so new, because it was always the intention of a good businessman to find and develop new ways. Nevertheless, companies should have the essential prerequisites for a successful digital transformation:
- The entire workforce must be interested and have a great deal of willpower.
- Standing still is not an option. You can’t work with the same patterns for years. You have to be willing to try new things.
- Business models must be flexible and changeable.
- It is necessary to actively test everything new.
Phases Of The Digital Transformation
First, it’s important to understand whether your business even needs such a transformation, and does so at this point in time. You shouldn’t do it just because it’s “in style”. Rather, you need to find out what your goals are, what your goals are. These should be specific and, above all, understandable. Avoid vague descriptions such as “improve the efficiency of the business.”
It is best to relate them to specific processes in the company:
- Increasing the speed of processing incoming invoices
- Reducing the delivery time of orders to the customer
Most importantly, we don’t recommend trying to transform everything at once. That usually doesn’t work. Firstly, it ties up a lot of resources and secondly, before proceeding further, it is advisable to first evaluate the usefulness of changes using the example of an area of activity.
In the first step, goals and the object of the transformation are worked out. In the second step, it is necessary to appoint those responsible – not only on the IT side who are responsible for the technical component, but above all on the commercial side. For example, if we modernize the work of the logistics department, then constant contact with the management of this department is essential so that the changes become reality not only “on paper”, but also in reality.
And finally, in no case forget to track the result. To do this, it is best to select the parameters in advance that you want to use to evaluate the effectiveness of the digital transformation in your company. By defining such parameters, you initiate the transformation. This is the only way to determine where you are moving, only in this way to “do digital transformation not just for the sake of digital transformation.
Reasons For Digital Business Transformation
The main reason behind the digital transformation of companies is to maintain and improve their competitiveness. Everything is developing rapidly and change is taking place so quickly that companies have to face completely new requirements in order to be successful in the future. That means you have to “keep your finger on the pulse”, seize the opportunities that are presented to you by the development of technology.