Digital transformations are becoming increasingly common in business, but they can be challenging for enterprises with many employees distributed throughout the world.
While they have bigger budgets and more resources, these companies must still strike a balance between innovation and cost savings. This guide explores the benefits, challenges, steps, and real-world examples of enterprise digital transformations.
What is enterprise digital transformation?
An enterprise digital transformation is the process of integrating various digital technologies across an entire organization. The specific technologies involved are constantly changing, but their ultimate purpose is to optimize a company’s daily operations and improve employee experiences. Digital transformation has long been an option for enterprises, but it’s now essential for remaining competitive.
Understand what is enterprise workflow automation as well
What are the key areas of enterprise digital transformation?
By definition, enterprise digital transformations change the way businesses work. Note that this is not the same as changing what businesses do. The end goal is not to replace processes or technology for the sake of shaking things up.
To stay within the confines of an organization’s product or service creation and keep the goal focused on making processes work better rather than replacing them, digital transformations target three key areas, which are as follows:
Digital transformation helps businesses understand their customers in greater detail, generally through the use of technology that drives customer growth and creates more customer touchpoints. Lower lead times and higher quality products mean far more satisfied customers as well.
Automating repetitive work – a cornerstone of digital transformation – frees up employees to have more frequent, meaningful interactions with customers, which builds long-term business relationships.
Internal processes get a huge boost from digital transformation. Implementing or increasing automation is a great way to speed up and standardize operations. Collecting data to monitor process performance in real time enables more effective, agile decision-making.
Digital transformation augments an organization’s existing products and services with digital offerings that typically include global shared services.
Discover the main digital transformation KPIs you must track
Enterprise digital transformation benefits
The potential benefits tend to relate to operational improvement in several forms, such as more meaningful customer insights, better decision-making, and scalability. The following benefits provide more detail on the improvements digital transformation can provide.
More detailed customer insights
Data collection is a major component of digital transformation, whether it’s structured data like customer information or unstructured data like social media posts. The ability to use the right data at the right time is the greatest benefit of digital transformation for many enterprises, as it’s the key to obtaining deep insight into customer behavior.
Acting on these insights allows organizations to deliver customer-centric services that increase customer loyalty and retention.
Business profitability and flexibility
Digital transformation directly impact an organization’s bottom line, often by using a hybrid cloud. In this architectural model, the cloud provides the data needed to make business decisions, while an on-premise data center stores the data needed to provide quality multimedia.
A better customer experience
A dramatic improvement in the customer experience is often one of the most obvious benefits of digital transformation. The insights provide organizations with the ability to make targeted changes to their products and services based on their customers’ needs and specifications.
Data-driven decision-making (DDDM)
Big data is a crucial component of digital transformation, especially for larger enterprises. The importance of analytics also increases as the number of customer interactions grows, allowing a digital transformation solution to gather data and integrate it into daily business operations.
Once this process is complete, data begins to have value for more members of the organization than just the directors. It then becomes actionable research, providing a comprehensive view of production, customer service, marketing, and finance.
An empowered global workforce
Digitization provides human-focused benefits, such as helping an enterprise’s workforce achieve the work/life balance they desire. This process makes work styles more flexible, which is particularly useful during the current transition to remote and hybrid working arrangements.
Today’s global workforce needs to work from any location – across multiple platforms – and perform more tasks on their own. For example, customer support agents should be able to contact other members of their team without going through an intermediary, which has been standard practice in the past.
A digital workflow infrastructure should offer protection from future events, such as changes in market conditions, customer demands, and unexpected disasters. For example, the digital technologies an organization implements should offer robust storage.
Components of successful digital transformation
For a digital transformation to be successful, processes are mapped, objectives are identified, workflows are streamlined and optimized, and software is chosen to best suit the objectives. Once all of these have been accomplished, however, there is still much work to do. To truly succeed, a business’s digital transformation should include:
IT infrastructure upgrade
Digital transformation often begins with upgrades to the organization’s infrastructure, especially mobile networks, data storage, and cloud computing.
Once completed, these improvements can provide users with access to tools across multiple devices and platforms that increase efficiency, reduce maintenance costs, and increase user satisfaction. A CIO or CTO should typically lead this initiative and measure progress with appropriate key performance indicators (KPIs).
The use of digital tools to optimize existing processes is another key component of successful digital transformation. These tools often include 5G cellular networks, artificial intelligence (AI), and the Internet of Things (IoT) devices.
While the simplest form of operational digitalization involves replacing analog tasks with digital ones, it may also require an organization to redesign its IT infrastructure, as addressed above.
The digital marketing aspect of a digital transformation helps an organization secure new customers by profiling clients and building brand awareness. It’s a good opportunity to cross-sell to existing customers on new features like increased security and shorter lead times, as well. The resources this process requires include AI, an omnichannel presence, and clean data.
The cost savings and efficiency acquired by a digital transformation opens new opportunities for growth, which can disrupt an organization and its markets. Leveraging these possibilities requires innovation in both business and technology as the enterprise shifts to new areas of business.
The CEO and/or the head of sales often lead these initiatives, as they require research, validation, and significant investment.
Enterprise digital transformation path
A digital transformation doesn’t just happen; it requires detailed, intentional preparation beforehand and close tracking once implemented to make such big changes work smoothly. The journey to digital transformation includes the following stages:
Gauge the current business state
It’s critical to begin by examining your organization’s software that performs tasks such as customer relationship management (CRM), productivity monitoring, and ticketing. It’s customary for businesses to integrate at least some of these functions into a unified communications platform.
Narrow down the strategy
Reduce the options for implementing a digital transformation by identifying key business scenarios and customer demographics. These criteria can help determine the most important technologies to use for reaching customers, such as live chat, email, or phone. A clear understanding of what your target customers want will help ensure the digital transformation meets their needs.
The KPIs you select are crucial for assessing your customer’s response to a digital transformation, the efficiency of business operations, and the return on investment (ROI) of this process. Common KPIs to consider for a digital transformation include the following:
– Business sustainability
– Cloud application deployment speed
– Customer lifetime value (CLV)
– Hours saved
– Outbound marketing performance
– Operational improvement
– Workforce productivity
– Rate of innovation
– Revenue from new digital services
Deploy in phases
Deploying a digital transformation in phases is a best practice that allows team members to gain experience with smaller or more straightforward facets of operations first. Mistakes and miscalculations are inevitable, and it’s a good idea to learn from less impactful ones before experiencing them on the scale of a business-wide project.
Monitoring is the final phase of digital transformation and continues as long as the enterprise is digitalized. Repeated tests and recalibrations may be necessary as you and your teams get the measurements of results exactly right. Analyzing data in real time is crucial for avoiding a failure that requires the initiative to be rolled back, an unfortunate but fairly common occurrence. Important KPIs to monitor include:
- Customer experience results (surveys)
- Employee productivity
- Customer support tickets closed
- New revenue from digital investments
Digital transformation challenges
The challenges of implementing a digital transformation are significant and become more so as an organization’s size increases. The combination of many departments, employees, and locations makes this process particularly difficult for global enterprises. It’s important to know what to expect when endeavoring to make an enterprise digital transformation. The biggest challenges to overcome along the way may include:
Deciding when to implement
Finding the best time to implement digital transformation is often the first major challenge businesses encounter. Set up an implementation plan in advance to minimize the transformation’s impact on customers and ongoing projects. It’s best to choose a relatively slow time of year, as well as a time when the majority of your tech team plans to be in the office.
If your business ships lots of deliverables at the end of each month, for instance, it’s probably a good idea to avoid planning a tech shift for that time. Government contractors might choose to avoid the fall, as October signifies the end of the government fiscal year.
Resistance to change
The sheer size of a digital transformation project for an enterprise is often sufficient to discourage many CFOs, CIOs, and CTOs. As a result, they often stick with the current communications platforms and on-premises data centers until an external event such as a pandemic pushes them into moving forward.
Employees, especially those who have worked at a business for a number of years, may have misgivings about digital transformation. The fear of learning new technology or being replaced by it entirely can lead them to staunchly oppose the coming changes. Understand that they are stressed and apprehensive; it’s also important to assure them that they’ll get the training they need and that, in the end, their work lives will be better.
Staying on track
Regulatory compliance considerations often have big impacts on digital transformation schedules, especially in industries like finance and health. For example, enterprises conduct assessments and set standards to determine legal and occupational compliance risks and sign contracts with vendors promising to mitigate those risks.
A digital transformation project needs a relatively aggressive timeline due to the many tools it may be implementing. The large workforce and international nature of many businesses also mandate strict time management. Back in the process mapping and planning phase, the timeline should be established, with milestones, for employee training and product implementation.
Contracts pose another common challenge for enterprises undergoing a digital transformation. Each implementation will have its own set of conditions, such as jurisdiction and ownership rights.
These services are often contracted on the provider’s terms, so enterprises lack negotiating leverage in these agreements. Inflexible scope can be another issue, as service contracts often define the project’s scope from the beginning of the contract term.
Successful digital transformation in the real world
Examples of digital transformation include digital tools to improve the customer experience like mobile applications, websites, and portals. These efforts can also dismantle the data silos that prevent business leaders from fully understanding how customers interact with their company’s customer service department and marketing initiatives.
Walmart has recently undergone a digital transformation to remain competitive with other grocery retailers offering online ordering and delivery services. Their latest success is allowing customers to order goods with voice command devices like Google Home. Walmart has also added a visual delivery service that allows customers to see exactly when their groceries have been delivered.
Take the first step toward your digital transformation
Many enterprises are implementing digital projects, especially those involving AI and machine learning. Pipefy’s no-code BPA solution allows teams to complete their projects with fewer delays by automating repetitive tasks that allow them to focus on more complex problems.
Our customizable databases can import data and integrate it with existing software to eliminate human error. We’re especially excited to announce our new Pipefy AI feature that creates processes for customers by simply telling our chatbot what they need. Get started with Pipefy today to find out how we can help you with your digital transformation.