Digital transformation is a common buzzword these days, but what does it really mean? When technology has had an impact on every area of a business, that business has experienced a digital transformation. This process includes all of the following:
- Leadership and employees
- Business processes and operations
- Customers and their experience
- How effectively and efficiently the business runs
- Interactions with partners and vendors
At its essence, digital transformation occurs when a company is willing to review itself (or work with an outside partner to perform a review) and determine where it can most effectively use technology to improve the way it functions. When the business deploys that technology in a way that has a positive effect, it experiences a digital transformation.
Digital transformation involves four primary areas: people, processes, customers, and offerings.
First, a company’s people are at the heart of the business and also at the heart of that business’s digital transformation. Getting buy-in from all stakeholders is vital, from company leadership to front-line employees, so that everyone feels invested in the plan and its success. Technology should be thought about in a way that empowers all a company’s employees to have the information and tools they need to serve customers most effectively.
Second, optimizing processes is a huge part of digital transformation because optimization supports a business’s people, allowing them to work smarter and focus their time and talents on high-value tasks. Technology that can automate and alleviate repetitive tasks reduces the chance of error and allows employees to shine.
Third, engaging, delighting, and surprising customers should be a business’s primary focus, and a successful digital transformation will allow that to happen more easily. With the right technology in place, a company can deploy targeted campaigns, test personalized messaging and offers, track results, and optimize future campaigns, constantly improving the customer experience.
Fourth, a business should continually look at its product or service offerings through the lens of digital transformation. Technology improves rapidly, and innovation happens quickly. So what improvements can a company make to its offerings? To determine this, businesses can be proactive in assessing their offerings, anticipating their customers’ needs and wants, and harnessing the available technology to improve their products or services
In many situations, artificial intelligence (AI) should be a part of digital transformation. Why? Two words: big data.
Every day, businesses collect a staggering amount of data—personal data, transaction data, demographic data, behavioral data, and so on. Multiply those bits of data for each person who browses and each person who buys, 24 hours a day, seven days a week, and one can easily see how the amount of data produced can quickly become overwhelming. Looking at this customer data as a whole and discerning any kind of meaningful pattern or trend is nearly impossible.
This is where AI comes in. AI is perfectly suited for analyzing massive amounts of data and identifying patterns and trends within it. Although it might not be able to reveal the why behind a specific pattern—for that, the trusty human brain is needed to draw conclusions—it can pinpoint, for example, the segment of a business’s customer base that is most opportune for growth
Numerous trends have emerged in the realm of digital transformation, from AI and machine learning to multi-cloud architecture. However, we see the following as three of the top trends for the year ahead:
- The continued democratization of technology: The more people within an organization who can use technology to accomplish their goals—without IT intervention—the more effective and efficient that organization can be. As vendors continue to focus on delivering innovative solutions that enable non-technical users to take advantage of highly complex technology through intuitive, user-friendly, self-service interfaces, employees will be empowered to autonomously make smarter decisions.
- An upswing in customer data platforms (CDPs): Businesses today collect an incredible amount of data about their customers at a variety of touchpoints—in stores, via call centers, through email, online, and so on—but aggregating all this data into a 360-degree view of the customer has been difficult. This is where CDPs can help. CDPs provide a single source of customer information, allowing business units across an enterprise—from customer service to marketing and sales—to have a holistic, comprehensive view of a specific customer’s every interaction with the company at their fingertips. We expect investments in these platforms to continue to grow.
- Automation: Savvy businesses are always looking for opportunities to use technology to optimize processes—not only can it help streamline operations, but after the initial investment, it can also reduce costs and enhance productivity. We anticipate that companies will continue implementing technology to automate parts of their operations that will allow employees to focus on higher-value, more important tasks.