Digital change or Digital transformation

Digital Transformation

Digital transformation—a buzzword often discussed but rarely fully understood. In practice, companies struggle to get a comprehensive view and control of the concept, frequently due to a lack of digital knowledge or a failure to prioritize ‘digital.’ Many companies lack a clear understanding of what digital entails and the different stages of evolution involved:

• Automation: This represents the shift from analog to digital, focusing on the past, converting previously analog processes to digital.

• Digitization: The second level, aimed at the present, enhances value from existing products and services.
   
• Digital Transformation: The most discussed but most challenging level, oriented towards the future. Even when there’s enough knowledge and tools, efforts often focus on the ‘digital’ aspect rather than true ‘transformation,’ resulting in missed opportunities. True digital transformation involves creating new value from innovative propositions.

Often, companies fixate on either automation, digitization, or digital transformation. Yet, these developments are essential for delivering added value to both internal and external customers. Many organizations claim to be undergoing digital transformation, but only some genuinely are.
 

A Matter of Strategic Importance

Businesses are generally aware they need to engage with digital strategies. However, many struggle with execution, often relegating digital initiatives to IT or marketing departments, treating them as isolated projects. It’s crucial to understand that digital transformation isn’t merely about applying digital tools to the business but recognizing that your organization exists in an increasingly digital world. It’s a mindset shift, transforming your strategy and company culture.

From digitization to digital transformation

Many organizations are currently in the phase of digitizing processes. However, this is not yet digital transformation. True transformation means delivering new added value through digital means. For example:

• An internet-connected battery charger with a data dashboard providing valuable insights to the consumer, offering new added value.
   
• Smart lamps controlled via an app, with additional services like voice control or geo-fencing, creating new business models.
   
• A company that uses user data from distributors to recommend products, ensuring maximum relevance for end users.

Digital transformation is an ongoing process with no end point. This doesn't mean that projects can't be defined with a clear start end end point. Companies with vision and execution capabilities will address past issues through automation, engage in the present through digitization, and, ideally, take the leap towards future transformation.

Customer Experience: B2C and B2B Differences Narrowing

A key element of digital transformation is achieving excellent customer experience. In B2C, customers are informed about their orders, updated on loyalty points, and receive personalized offers. These experiences are driving expectations into the B2B domain. The same person placing an order at Picnic (dutch supermarkt retailer) or Bol.com (dutch e-tailer, part of Ahold) in the morning is also the buyer or engineer at your client company.

How to Start?

TRIMM frequently addresses questions about how to initiate digital progress. Budget, knowledge, and resources are limited. We split this into external and internal aspects. Customers and their needs form the foundation. Despite having a solid customer connection, there’s often more to learn. TRIMM typically begins digital projects with a customer experience journey assessment, revealing areas for improvement.

After external analysis, we look internally to see if the organization has the people, processes, and tools to meet current and future customer needs. The strategy then integrates these findings, determining digital maturity and setting a path for success.
 

Organization, Process, Technology

Implementing digital tools inevitably raises organizational questions. Technology changes impact processes, often revealing inefficiencies. Organization, process, and technology are interconnected. An integrated approach is essential, where organization is the base, processes form the structure, and technology is the keystone. Well-functioning foundations are crucial for technology to be effective.

Align IT and Business Interests

As digital transformation gains importance, alignment between IT and business becomes critical. Their priorities often differ: IT focuses on continuity, stability, security, and availability, while business prioritizes rapid value delivery, impacting IT landscapes. Clarity in transformation goals fosters understanding and cooperation, facilitating shared objectives.

Embrace Mistakes

Organizations often experience lengthy transformation processes, hindered by sunk costs and resistant cultures. To limit potential failures and achieve quick results, keeping projects small and iterative is advisable. Adopting agile practices and a learning mindset can accelerate and improve digital transformation.