Machine learning, artificial intelligence, cloud computing — the race to digital transformation is underway in virtually every industry.
Digital transformation is an intentional integration of digital technology into all aspects of a business. The result is fundamental change that affects how an organization operates, how employees function in their roles, and how customers interact with the business.
No longer a "nice to have" or a "someday" goal, digital transformation can be a matter of survival. Sixty-seven percent of business leaders see it as integral to their company's success.1 Frankly put, organizations have two choices: evolve or risk becoming obsolete. With these odds in mind, 87% of business leaders have made digitalization a company priority.2
But digital transformation is more than just replacing processes with technology. It requires rethinking processes and using technology to make them work better for employees, customers, and other stakeholders. Executed properly, digital transformation positions businesses to adapt quickly to a changing environment and new technologies.
Minimizing or eliminating physical paper in favor of digital documents and processes, automating systems, and implementing end-to-end digital customer interactions are just a few ways to improve business operations. Digitizing these operations ensures all information and intelligence like pricing, product availability, logistics and financial data are connected.3 That's why traditional back-office functions like accounts receivable, accounts payable and IT are critical foundations of digitalization.
Digital transformation simplifies daily tasks.
Forty percent of knowledge workers spend 20% to 30% of their week on document-related tasks.4 Digitalization and automatic electronic workflows give workers access to information faster and more efficiently. These real-world benefits have tangible bottom-line implications, including more employee bandwidth and lower operating expenses.
Digital transformation strengthens data security.
Digitalization means sensitive information can be stored in the cloud or on secure servers. Documents are no longer stored in file cabinets, exposed to damage or physical theft and misuse. And unlike paper documents, electronic documents can be encrypted in case they fall into the wrong hands.5 Finally, digital transformation fortifies and standardizes security practices, applying them to systems and processes across the organization.
Digital transformation increases productivity and efficiency.
Automated digital platforms enable employees to access critical organizational information instantly. They offer a more efficient way of working, speeding up processes so teams can spend their time on more productive activities. In fact, digitizing, automating, and optimizing document workflows reduces costs by more than 35%, time spent on document-related tasks by 17% and errors by almost 52%.6
Digital transformation offers greater data insight.
Electronic workflows provide more visibility into information and processes from within the company, which facilitates more collaboration and better decision-making. Standard data fields and validation minimize data gaps or incorrect entries that could otherwise require more time to correct or cause issues with auditing.
Digital transformation is exciting and energizing for a company and its stakeholders, but the reality is, up to 70% of digital transformations fail.7 It's critical to be aware of these common pitfalls that could sink your digital transformation efforts.
Moving too quickly can be costly.
Organizations that jump in too fast and move too quickly risk investing time and money into tools that don't address their organization's needs or missing critical steps in the transition process. It's costly and damaging to morale to have to backtrack and start again.
Lack of training minimizes benefits.
If employees don't have proper training and education on the new digital platform or tools, they won't use them correctly or won't use them at all. As a result, your company will never realize the maximum benefits of digitalization.
Employee resistance can cause implementation failure.
Digitalization can make employees uneasy. Fear is understandable when change is introduced, especially technology changes. Employee resistance is most often to blame when a company’s digital transformation efforts fail.8
Failure to update processes will reduce efficiency.
Even the best technology is worthless without the right complementary processes. Organizations that attempt digital transformation without identifying, analyzing, and documenting all the numerous processes used won’t be able to optimize those processes for efficiency.
Lack of management buy-in can derail efforts.
Of course, no amount of employee support will save a company's digitalization efforts if it lacks support from the c-suite. Business executives provide leadership and set project budgets – and lack of both can doom digitalization efforts. According to employees, the most common obstacle for digital transformation is the CEO.9
Proactive steps will clear the way for success.
The decision to digitize your operations shouldn’t be forced or rushed. Careful consideration and some tips will help to accomplish your goals for making the shift.
Clearly define your objectives. Take the time to answer the "why?" and "to what end?" of digital transformation for your organization. As you progress, regularly monitor your path to make sure the outcome gets you closer to meeting those objectives. If it doesn't, be prepared to pause and re-evaluate.
Be sure leadership and managers are firmly on board. Recruit and develop change agents who understand the objectives and can communicate them throughout the organization and answer any questions that others may have.
Communicate candidly and regularly. Articulate the rationale, scope, and timeline for change to all stakeholders. Begin communication early so they can prepare and keep them abreast of any changes along the way. This is a situation where over-communicating is preferred to under-communicating.
Be sensitive to employee concerns. Employees might be hesitant about digitalization and concerned about how it will affect their roles. It’s often a challenging mental shift to jettison long-held processes in favor of new ones. Make sure the lines of communication stay open — both up and down the org chart — so you can assure employees that the changes being made are to help them do their jobs, not to replace them.
Despite the compelling business case, many organization's digital efforts falter. The level of commitment, investment and work required to realign a company is extensive, but the value of digital transformation is clear: Improved operational efficiency, faster time to market, and the ability to meet customer expectations all give businesses a competitive advantage in the market.
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