Digital transformation is at its best when implemented purposefully and methodically, avoiding the negative repercussions of forklift overhauls and disruptive paradigm shifts.
Modern businesses in every industry have realized the power of technology. “Digital Transformation” has landed on the roadmap of many corporations. The phrase is popular, but some business leaders have confused what it really means for their companies. In the past few years, digital technology has grown in leaps and bounds.
No longer contained to IT improvements, digital can be used to improve every aspect of today’s business operations and value propositions. It’s not surprising why some business leaders think digital transformation necessitates large investments in technology, total paradigm shifts from traditional to digital processes, and company-wide disruptions. Working with our customers through many digital transformations, our team at Zappix has found the best, most successful transformations aren’t massive overhauls, but often are purposeful, methodical shifts transforming the most beneficial aspects of businesses over time. New research from Harvard Business Review has validated our experiences:
“To be sure, in some cases such a paradigm shift is involved. But our research and work suggest that for most companies, digital transformation means something very different from outright disruption … more often than not, transformation means incremental steps to better deliver the core value proposition.”
— Harvard Business Review
Small Steps For Big Results
Many business leaders make the mistake of looking to companies with radical technology adoption as examples of digital transformation innovators. This process of launching brand new technology solutions to address brand new customer needs and largely pivoting a brand’s value proposition and business model doesn’t apply to most companies. These large paradigm shifts are costly and can be very disruptive to employees having to learn new systems, IT needing to manage new processes, and customers having to adjust to new interfaces and value propositions.
For companies not built for these rapid changes, the resulting disruption can cause more harm than good. HBR looked at the case of TUI UK, a travel agency, for better insight: “…experience suggests that attempts to replace multiple complex, mission-critical systems all at once nearly always end in disaster. Instead, in the words of Jacky Simmonds, who was part of the [TUI Digital Transformation] leadership team, ‘the key was to envision the ideal customer journey and then see how it could make business sense through a digital lens.’”
Unlocking Successful Transformation
TUI’s digital transformation success stemmed from their plans for gradual adoption of technology purposefully brought in to develop and improve the core business values they already centered their business around. This is key. Digital transformation shouldn’t change the value chains of most businesses. The best value for companies committed to digital transformation comes from using new technology to increase efficiencies, improve experiences, and streamline processes that are directly connected to their business.
HBR suggests businesses focus on improving customer experience (CX) and reducing costs. They found, “Managers who believe that digital disruption requires wholesale reinvention of the core business end up running in a thousand directions. But if the challenge is simply to better address their customers’ jobs to be done, they will most likely focus on the technologies that have the greatest effect on their customers (such as customer experience or relationship synergies) or their core capabilities (such as cost synergies).”
Evolution, Not Revolution
Digital transformation shouldn’t disrupt your entire business model. New and emerging digital technologies like Visual IVR, chatbots, and other on-demand solutions should be implemented methodically to complement and enhance existing value propositions, customer experiences, and employee tasks. Done well and implemented over time, digital transformation can make big strides in efficiency, cost, and CX. When business leaders begin approaching digital transformation from an evolutionary instead of a revolutionary standpoint, we’ll start seeing real success.