The changing behavior of customers and the increase of innovators who disrupt the market and compete with traditional players, driven by the many new digital technological possibilities, create tension.
Companies use digital technology to create value; to give customers a better experience, for smarter and faster collaboration and agile, secure and efficient organization, and business processes with the integration of existing Information Systems.
But are we talking about digitalization or digital transformation?
These words are often used instead of each other. The fact that many regard these terms as interchangeable illustrates the confusion about what they entail and the effort to build a clear vision and an executable strategy.
Digitalization is the process of using digital technology to optimize the efficiency of business processes. Digitalization is often a step-by-step improvement or an adaptation of an existing and non-digital process.
Digital transformation is a digital-first approach and focused on change. It leads to the creation of entirely new markets, value creation and new ways of doing business. Moreover, it includes the entire company, not just a certain process or a specific function.
Although digitalization and digital transformation are certainly not the same, they do have everything to do with each other.
The biggest obstacles to Digital Transformation
In many organizations Digital Transformation does not lead to achieving the objectives. The larger and more complex an organization, the more difficult it is to change. In general terms, managers know the new technological possibilities and see the need to transform, but it often goes wrong during implementation.
On the one hand, this is due to the lack of support, not only at management level, but also among employees. On the other hand, it has to do with the lack of a clear strategy and approach. Digital transformation is often too vague, too large and too unclear. Where do you start?
Digitization as a prelude to digital transformation
Kien advises to start with the improvement and digitalization of important customer processes, for example the fulfillment process. Subsequently to develop a vision and roadmap - partly based on the experience of digitalization - for further digital transformation. In a sense, digitalization can be seen as a prelude to digital transformation. Important topics to pay attention to are:
Process thinking and cooperation Process thinking is very important. Ensure that the most important customer processes are end-to-end transparent and under control. Take into account the complete delivery process so that employees and the various business partners (suppliers, customers, logistics etc.) can collaborate better
Culture and agility Develop the business architecture (organization, processes, IT, etc.) so that process changes can be carried out quickly and in a coordinated manner. In combination with a company culture that focuses on continuous improvement, the company can adapt quickly to changing circumstances, such as market developments, customer expectations, or legislation.
Leadership and technology In which technologies organizations invest is important, but how they use these investments to change the organization is the key to success. Digital technology alone is not enough, good leadership is the lever that transforms technology into a true transformation.
Do not wait for your competition
Below are some of the findings from studies conducted by Deloitte, eFocus, Forrester, and Gartner.
10% of the organizations have digital transformation on their boardroom agenda
87% of the CEOs believe digital transformation is crucial
25% of organizations lose market position due to “digital business incompetence”
40% of organizations do not survive the digitalization
By 2020, 26 billion “things” are digitally connected and 75% of the organizations are fully digital.
Analysts expect that the innovations and disruptions of the past 10 years are just a prelude of what awaits us in the coming period. Time passes quickly and your competitors never sleep. Do not wait and get started, but work from a structure and vision.
For organizations that want to continue with digitalization and digital transformation it is important to know what their starting position is. This starting position determines which steps must be taken to achieve the desired results. In addition, a roadmap will be necessary in order to get started with the right focus and objectives. Kien has developed an assessment for this.
If you want to know more about Kien’s assessment, please contact Kien!