So what exactly is digital transformation?
That’s a big question, and people have been debating it and contextualizing it differently for about a decade or more now. In the most general sense, “digital transformation” means that you incorporate digital approaches into the full ecosystem of your business. Typically this is going to mean some mix of using cloud, using data better, using an element of AI and machine learning, and more. It takes your processes from “manual and on-site” to “automated and from-anywhere,” both for your employees and your end users.
Some believe there are four main areas of digital transformation. What that means is that when you digitally transform your business, you are shifting the processes (internal), the model (external), the domain (external, i.e. where you compete), and the culture (internal). The last one is where a lot of organizations have problems, often because you have four or five different age generations in the workplace, and they will respond to technology and change differently. It can be hard to shift the culture to very technology and development-heavy if the population is a bit older, but it’s not impossible.
Now, the good news is that if you consider cloud to be the first brick in the digital transformation process, about 91% of all businesses and 94% of enterprises use some amount of cloud. So while it sometimes seems companies are lagging on these digital transformation efforts, many have at least begun the process.
The seven ways to consider digital transformation
We look at digital transformation through seven key areas, and the next series of posts on this blog will be about each area. Those are:
- Data and analytics: You need a good handle on information that is relevant to your business, whether that’s coming from sensors, customer transactions, apps, AI platforms, or other sources of data. Data is the new oil. If you don’t have data, you cannot really compete in modern business.
- Customer experience: This means end-to-end, omnichannel CX. What are the different ways a customer can engage with you? What platforms? What channels? How are they treated on each channel? How does the process go from first contact to them becoming a buyer?
- Innovation: Obviously, innovation is key to driving so much of business. We’ve seen this in every sector for generations, but a recent example is challenger banks in finance.
- Tech Stack: What are you using internally and what are you using that faces customers? And who are you working with to make sure it’s being used right?
- Upgraded systems/processes: In order to “digitally transform” your business, your processes (internally, with employees and contractors) need to reflect a new way of doing business and an embrace of the tech stack. Externally, you need to make sure your systems are easy and intuitive to use for an end user. No one likes to land on a website or app and think it was built in 1994.
- Up-skilling and re-skilling: What do your workers need to know to remain relevant and competitive in terms of where your business is heading? Do you need to bring in outside expertise to buffer what you have among your employees? Where are the skill gaps and knowledge gaps? Does Martha in HR not know how to access the cloud?
- Leadership and culture: Sometimes companies try to “digitally transform,” but their culture remains very old-school and manual, and focused on seat time, and paper copies, and on-site storage, and all that. Your culture and how your leaders discuss the work needs to change as you become more digitally-integrated.
How does digital transformation apply to outsourced software development?
In a million different ways. Most notably, though, a lot of companies will use an outsourced software development provider to help them throughout the digital transformation process: making sure their systems are upgraded, making sure their customer experience is coded right and intuitive, and helping the existing team to change the culture and drive innovation.
We actually do this often with clients.
If you’d like to know more about selecting the right software development outsourcing partner: We’ve put together a checklist of factors to consider.