Digital transformation helps companies secure a competitive advantage through improved productivity, greater customer loyalty, happier employees and a larger bottom line. It’s the foundation on which companies build more value for their customers. In the past, digital transformation may have been considered an IT project, but the reality is that it ripples throughout every part of the business.
Digital transformation has become more critical during the pandemic as companies are challenged with working remotely and delivering on customer expectations without missing a beat. One study found that over half of IT decision makers (59%) reported plans for accelerating digital transformation efforts when previously, only 15% of companies were prioritizing digital transformation.
As companies move forward, they need tools that support the delivery of what their customers expect, whether it’s faster, more connected experiences or getting the products they need delivered at record speed.
Why is digital transformation important?
Digital transformation helps your company secure a competitive edge that delights your customers and streamlines back-end operations. For example, you may need greater traceability across a product’s life cycle, the ability for employees to collaborate in real time or greater visibility into risk management. It’s the strategy that underpins your decision about what tools are essential. A few benefits include:
Improves the customer experience.
Even if you’re using the tools to develop better products, a digital-first culture has a direct effect on the customer experience. And improving the customer experience is key, since 86% of buyers are willing to pay more for a great customer experience. During 2020, the customer experience overtook product and price as the key brand differentiator.
Builds a stronger employee experience.
Most companies know that employees are their greatest asset, and by providing your people with the tools they need to do a better job, you create a more engaged and efficient workplace, which translates to happier customers.
Digital transformation helps you optimize existing processes and make them more efficient. You can streamline workflows, improve digital processes, automate time-consuming tasks and overall make your workplace more efficient.
Creates greater profitability.
Research shows that 80% of organizations that completed digital transformation reported improving profits, and 85% reported improvements in market share. On average, leaders forecast 23% higher revenue than that of their competitors.
Improves agility and productivity.
During 2020 companies learned that agility wasn’t important; it was essential. Tools that support digital transformation help your company innovate faster, streamline workflows and improve productivity.
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How can companies embrace digital transformation and achieve better results?
Developing a digital transformation strategy, or revisiting an existing strategy, is a good place to start in creating more agility and success in your plans. What tools will help you meet digitizing requirements or, if you’re developing products, meet complex product requirements? Consider doing the following.
Define what it means to your company.
What is your desired outcome once your digital transformation strategy is deployed? It’s all about the end game, so define your goals well upfront. Consider examining the people, processes, data and technology that you use now, and then align those elements with your goals. Where are the gaps? Are you struggling with efficient collaboration? Is product development inefficient? Identify the areas that matter most.
Foster a digital culture.
Digital adoption comes from the top down. Share your strategy with employees, and get buy-in. How will their jobs improve due to the changes, and how will they be able to serve customers better? Share these details to get everyone on board.
A key goal for any digital transformation strategy should be to provide value. How does the strategy serve your overall business vision? Do you need to streamline processes, drive greater revenue or develop larger customer value? You need a baseline and the ability to successfully measure those changes while staying agile.
It’s critical to stay fluid enough to adjust to fast-changing market conditions and respond quickly. Rigid KPIs need to give way to more flexible and agile requirements that have room for iteration. Adaptive design allows you to pursue more frequent changes to transformation strategies and thereby generate the best results.
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Avoiding Common Pitfalls
As you define your strategy, it also helps to be aware of a few potential pitfalls so that you can avoid them. For example, more technology isn’t always the answer. Success lies in adopting the right technology. Consider these common pitfalls:
Failure to define a digital transformation strategy.
Digital transformation must start with a vision, and adoption of technologies and tools must directly stem from that vision. How can the technology support the goals and objectives?
Not asking the right questions.
Asking the right questions can help you shape your digital transformation strategy. For example, what do you truly need to better meet customer demands? Do you need to streamline complex product development through improved collaboration? Do you need real-time collaboration to improve workflows? Look at overarching goals and narrow down the tools that make accomplishing those goals easier.
Lack of leadership support.
Digital transformation isn’t a “one and done” project but instead a living, breathing process of iteration. It requires leadership support in continuously revisiting the strategy and making changes as needed to improve the strategy.
Creating strategy in a silo.
The IT department may have largely been responsible for digital transformation in the past, but that is no longer the case. It’s a cross-functional project that affects leaders, as well as employees, from all parts of the business.
Moving Into the Future with Greater Success
Digital transformation is a critical element on the path to the future. Few businesses will stand the test of time without a strong plan to adopt beneficial technologies, such as those needed to digitize requirements management and complex product development. For example, as product development processes become more complex, traditional document-based requirements management has shown its age and limitations. This alone is a powerful opportunity in digital transformation strategy.
However, many organizations haven’t upgraded their requirements and risk management processes to keep pace with innovation, putting them at risk for slow development cycles, costly changes and regulatory recalls. Identifying opportunities such as this will help your company adopt digital transformation with great strength and success into the future.
Check out Part II of this blog series, “How Jama Connect Can Help with Digital Transformation.”