Digital transformation strategy: 3 pillars + 6 tools + 5 tactics (2023)

Yet another expression of the times, digital transformation, in spite of the popularity that this concept is having, cannot be seen as a fad or a marketing trick to sell applications and courses.

The reality is that in a world where more and more people are born connected, thinking your business in purely physical terms is already totally impossible, and it’s been some time. What about the future?

Digital transformation has frightened some entrepreneurs and managers, who try to understand what it is and imagine that its implementation is highly complex.

In fact, the tools and methodologies are there, just research, create a Benchmark, analyze the characteristics of your company and set priorities.

An action plan like any other, but with very important strategic consequences.

To help demystify this concept and show that much of what must be done, for sure, has already begun in an unorganized way in your business, we have described in this post some fundamental concepts of digital transformation. It’s only the beginning of the discussion on this topic, which we intend to extend in a series of posts.

Also see: Management models of organizational change recognized by the market.

But do you understand what digital transformation is? Check out this video to find out.

The 3 pillars of digital transformation

The first step in understanding which areas will be impacted and what the effects of digital transformation on your business will be, is to understand on what basis this changes the way you run the business and interact with your audience, your collaborators and partners.

Thus, 3 pillars stand out:

1- Customer Experience Digital Transformation

An example that has already become classic is the customer who questions the seller within a physical store if he can discount certain merchandise because the customer has just seen on the internet that the competing store sells the products cheaper.

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Thus, sales channels, ways to advertise products or services and attract and engage consumers, points of contact, language and even prices and product and service attributes are affected by digital transformation, as the public, increasingly, becomes immersed in the virtual universe and feeling very happy inside of it.

2- Operational Process Transformation

This is another point that many forget. Digital transformation is not just about providing a better customer experience through virtual shopping channels and agile customer service, integrated with social networks.

Process modeling should be able to deliver increasing value at each stage of the chain, and this can be achieved through a better flow of information, collaboration and teamwork, elements in which digital transformation can assist in a very practical and assertive way.

3- Business Model Transformation

The sum of the two pillars above may help to be attentive to business model transformation, not only in the sense of changing the very way in which your organization produces and delivers value to the market but also to what the competition can do in that sense, using digital transformation for this.

A whole vehicle GPS industry was virtually dismantled with Waze, and the hospitality and urban transport sectors were strongly shaken by initiatives such as AirBnB and Uber.

Your company may even want to generate “disruptive innovation“, but, in addition, it must be attentive to the steps of competition, mainly indirect, and defend itself against threats.

See more: The theory of disruptive innovation: Revolutionize and create new markets.

6 digital transformation agents

Among the most used technologies in digital transformation, we can mention:

1- Social Media

The use of social media in a much more inclusive way than merely delivering content relevant to your audience, but, for example, monitoring customer interactions to detect trends, desires and even respond to crises more quickly.

2- Cloud Computing

Already widely adopted by most companies and the general public, especially with the use of SaaS applications (software sold as pay-as-you-go services), this technology is essential to promote more integration and team work.

3- Remote access and mobility

Wherever a collaborator, customer, vendor or partner is, they can interact with your company by having a mobile device and an internet connection.

This opens up a huge range of possibilities that your business needs to explore.

4- Big Data

Perhaps the most complex digital transformation elements, it should not be overlooked. There are already Big Data solutions with Freemium and paid subscription models on the market.

See also: 5 awesome process simplification ideas

5- Internet of Things

Also known as IoT (Internet of Things), it comprises a number of devices that have embedded technology, such as sensors, buttons, etc. that are capable of connecting in the cloud and transmitting data and events.

Here’s an example of IoT:

6- Artificial Intelligence

Artificial Intelligence is the ability of a machine or software to develop human-like thinking, including the ability to set standards, experiment, perceive, and make decisions intelligently.

Self-guided cars, cognitive computing, chatbots and many others are examples of the current application of this technology. See examples of artificial intelligence uses in the series below:

Activators of digital transformation

A survey conducted by the site Digital Transformation, has uncovered a lot of important data about the future of this trend in organizations. But, at this point, we’re going to focus on one important concept: activators of digital transformation.

These include:

• Agile Methodology
• API Management
• DevOps
• Identity-centric Security

Let’s understand a little more about each of them:

Agile Methodology

We talk about it a lot on our blog. These methodologies originate from the agile manifesto and fit in perfectly with digital transformation in the sense that they seek to develop products and services that deliver exactly the value that customers seek.

They do this in an incremental way, through iterations that guarantee that with each new functionality implemented, it’s tested, approved and only then continues with more innovations.

See more on our blog: One of the authors of the manifesto criticizes Agile and Scrum methodologies

API Management

APIs are Internet protocols that enable the communication and exchange of data between different cloud-based tools.

When these APIs are “open,” this allows independent developers, or even large companies, to integrate their solutions with those of other organizations, establish automated routines, new business ideals, and especially more productivity for businesses.

An incredible example of an API-based platform is Zapier. It allows, for example, that an email be sent when someone includes a line in a Google spreadsheet, or that a contact is created in Mailchimp when someone fills a form in TypeForm, etc. Here are some apps that can be connected to Zapier based on public APIs:

DevOps

Basically, it’s about integrating the development teams with the other company IT professionals, providing more quality and agility in the deliveries, in addition to generating safer and more reliable results.

Identity-centric Security

A measure designed to give more security in the use of applications and tools and in the more reliable exchange of information storage.

To implement it, users need to identify themselves in different ways and through more than one point of contact.

With these 4 facilitators, digital transformation can flow more quickly and securely, however, few companies are adequately familiar with these technologies, as shown in this graph presented in a survey and based on data from Coleman Parkers Research:

In short, only 56% of organizations consider themselves to be advanced Agile users, 39% DevOps, and 37% APIs. Only identity-centric security has more satisfactory numbers: 64%.

See more interesting data in this document:

By 2020, the customer experience will exceed price and product as the key differentiator of the brand. 86% of shoppers will pay more to have a better experience.

(Video) Operational Excellence through Process-led Digital Transformation

CEI Survey

By the end of 2017, 70% of Fortune 500 companies will have teams dedicated to digital transformation.

Cost index

Digital transformation, according to Coleman Parkers research, increases employee productivity by 39%, operational efficiency by 38%, and improves employee recruitment and recruitment effectiveness by 70%.

5 Myths about digital transformation

In an interesting video by Niall McKeown, which you can check out here, he lists 5 myths about digital transformation.

Let’s explain each of them:

1- Digital transformation means improving IT systems

Digital transformation has much more to do with strategy and new ways of thinking. The goal is to adapt companies to an ideal way of competing in the midst of a digital economy. And incredible as it may seem, changing technology is not enough, you have to know how to choose the right new technologies, and use them in the right way to generate innovation and sustainable competitive advantage.

2- Digital transformation means improving the operations of the company

There’s a big difference in being good at what you do – having a company operating very well – whether with the help of technology or not, and having a good strategy.

An appropriate strategy is one that allows the organization to make the necessary changes to stay competitive in a sustainable way. This is what digital transformation must focus on.

3- Digital transformation means broadening the use of digital marketing

Digital communication is very important for digital transformation, but people often overestimate it. There are three components that should work in an integrated way to create a partnership between leaders, employees, consumers and partners, among others, that communicate a competitive advantage:

1. Communication
2. Technologies that facilitate the quick creation of solutions
3. The effective presence of a leader who supports and believes in transformation

4- Every digital transformation strategy is good

What makes a strategy good? In fact the question should be: what makes a strategy bad? And the answer is simple: a misconception of what strategy is.

Moreover, a good strategy is one that identifies one or two fundamental points in the situation analyzed, one that will introduce more efficiency in obtaining results and one that should be the focus of all efforts, actions and resources.

To do this, follow 3 steps:

• Diagnosing an organization’s problems
• Define appropriate policies to address these issues
• Act consistently in pursuit of this

Sometimes a digital transformation strategy may not be consistent with your business problems and therefore you shouldn’t adopt it.

5- Agile, Lean, Sprints, the 5 forces of Porter etc. create digital transformation

Not exactly. These are development methods, not strategy-building tools. These are ways to deliver an already defined strategy, notcreate one. They are strategic agents.

The key is to create new competitive advantages, test them, create those solutions and deliver them in the form of technology. So start with the strategy, not with the methods you use to deliver the solutions it needs.

5 tips for your employees to support a digital transformation strategy

In 2016, the famous cosmetics brand L’oréal grew no less than 33% of its online sales after implementing a series of efforts to qualify and increase the knowledge of its more than 14,000 employees on its digital transformation strategy.

Yes, there was also a strong media investment in digital channels, but according to the Harvard Business Review, the motive behind this success is due more to the involvement of employees and their empowerment in a digital transformation strategy than to the greater exposure of the brand on the internet.

For the authors of the article, the success of a digital transformation strategy is not in technology, but in the way companies communicate, organize and empower their collaborators.

To do so, they suggest 5 approaches that we’ll look at in more detail in this post.

Also read: Company digital transformation process: 5 key steps

5 Ways to Empower Your Employees for Digital Transformation

There’s now a consensus in the market that there’s no way to build a successful business if it doesn’t embrace a digital transformation strategy.

In this sense, many organizations are investing heavily in technology. But is this the way?

It takes more than that, your company must enable its employees to take advantage of the best of digital transformation. This benefits the company’s customers, who already immerse themselves in the digital environment.

1- Commitment of leaders

The first stepis make it clear to the organization that a digital transformation strategy is a senior management decision.

Therefore, you should demonstrate this through firm actions, plans and the creation of strategic groups in digital transformation. All of which signals the commitment of the organization in this regard.

2- Bring your employees closer to consumers

More and more companies are trying to sell directly to their end customers through the internet.

But companiesthat with distributors and retailers often don’t thoroughly know the buying habits and behaviors of their consumers.

Therefore, a digital transformation strategy in this sense can’t sum up the creation of digital sales channels.

You must promote the use of new BI technologies and analytics. Monitor user behavior, whether in sales channels, social media, or other online contact points. This way, you get the information you need about your end-user’s wants.

3- Provide employees with the means to be more agile

Nowadays, with the rapid evolution of both technology and consumer behavior, organizational change processesneed to keep pace.

So, the easiest way to achieve this is with the automation of processes and the creation of dashboards that allow an agile and real-time monitoring of sales, access to blogs and social networks, opening of e-mails, consumer comments and other indicators.

Therefore, the culture of quarterly or even monthly meetings to evaluate the performance of actions and projects and define new strategies no longer makes sense. Decision making should be much more agile.

4- Don’t forget the “employee experience”

Some companies are going beyond the concept of customer experience and introducing the design of the “employee experience”.

Therefore, the goal is to identify the motivations, expectations, and behaviors of employees to attract and retain talent.

So, tools likedaily journey maps, persona creation, and research data, allow companies to positively transform the employee experience.

5- Long-term learning

Finally, without training and learning, there’s no way to help your employees face the challenges of digital transformation. And this should be done in innovative ways that fit the profiles of new employees, such as the use of gamification, for example.

See more: 5 Digital Transformation Strategy Examples

Does your organization have a Digital Transformation strategy?

Share your progress and participate in our research. >> Participate in Research

Digital transformation strategy can begin with continuous process improvement, aided by cloud-accessible tools. See a testimony from André Antivilo, who has used HEFLO, an intuitive and cloud-based process modeling tool, with surprising results:

“HEFLO allowed me to learn about process management in a general way, through a free and modern platform. With an open mind for innovation and customer feedback, the team meets demands and gives constant updates. An Excellent online tool ” –André Antivilo

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