Small Business Stands Strong

Does Your Business Need a Digital Transformation?

Many businesses are lagging behind or missing opportunities when it comes to digital technology.

Tanner Simkins

Entrepreneur Leadership Network VIP

Founder and CEO of Complete SET Agency

November 11, 2020 6 min read

Opinions expressed by Entrepreneur contributors are their own.

As technology constantly and rapidly changes, many businesses find themselves unable to keep up with the advances. The reality is that digitalization promises to change the way that businesses operate, and a 2019 McKinsey Digital Quotient survey found that 93 percent of executives believe that taking advantage of digital technology is essential for accomplishing strategic goals. Digitization brings new opportunities, improves processes, expands production and many other benefits. Leaders need to work to develop the right systems, structures, and expertise to welcome digitization with open arms.

What is digital transformation?

Digital transformation is defined as “cultural, organizational, and operation change of an organization, industry, or ecosystem through the smart integration of digital technologies, processes, and competencies.” When thinking about this in terms of your business, don’t focus on the coolest new tools or systems, but instead focus on how the right technology can benefit your customers and team and add value to your business.

Digital technology is simply the tools, systems, and devices that can generate, store, or process data. Utilizing this type of technology leads to increased automation, increased efficiency, and reduced costs. Further, it helps to drive innovation and enables teams to more effectively scale systems and grow their business.

In the current environment, some of the most important digital technologies for businesses to consider are automation, artificial intelligence, advanced analytics, the Internet of Things, and augmented or virtual reality. The reality, however, is that these key areas are constantly evolving and developing, making digital transformation an ongoing process, challenge, and opportunity for businesses.

How to prepare for a digital transformation

Because a digital transformation inevitably involves new systems, processes, and skills, it can be daunting for many leaders and teams. Embracing new technology involves a willingness to disrupt current processes and to develop new ones. This can be uncomfortable and challenging, and it’s important for leaders to acknowledge that from the outset.

For many businesses, a digital transformation means completely rethinking systems and processes in order to embed technology throughout them. From the start, leadership teams need to be willing to make these major changes in order to take advantage of new tools.

In addition to making this key mindset shift, leaders should think through their structure, people, and processes in preparation for a digital transformation. First, consider the structure of teams and think through the changes that would help support a digital transformation. For example,

Is there a chief digital officer?
should there be a chief digitalization team to lead changes?
What key structures are most in need of changes?

Next, leaders need to think about the people that will lead this transformation. Should your business develop skills internally, partner with talent externally, or do some combination of the two?

Finally, it’s important to think through processes and what changes are needed. During this analysis, consider how your processes are meeting expectations in the digital world - for example, is there 24/7 availability, real-time fulfillment, consistency in practices, are systems error-free, and is there personalized treatment?

When considering processes, it’s helpful to determine how much disruption you’re prepared for. Are you ready for a sudden “big bang” style change or is a phased approach a better fit for your team

Thinking through these broad organizational issues prior to implementing a digital transformation plan will help to ensure that your leadership team and organization are poised for a successful transformation.

Tips for a successful digital transformation

Once you’re ready to begin a digital transformation, there are a number of things you can do to ensure that it goes smoothly internally and externally. Almost by definition, a transformation is going to lead to lots of disruptive, uncomfortable shifts. Being strategic about how you go about these changes can help to make this process smoother and more successful. Here are a few tips to keep in mind:

Don’t forget to prepare your team

Perhaps the most important thing you can do is to prepare your team. Whenever there are major changes, leaders should expect some pushback. It’s important to anticipate and proactively address this issue to ensure that your team is ready and supportive of upcoming changes.

A simple way to prepare your team is by being transparent about the planning process, goals, and anticipated shifts. Involving them in the process as much as possible will lead to increased buy-in and engagement from all levels of your team. Another key way to prepare your team is by offering learning opportunities and training to ensure that they have the necessary skills for upcoming shifts. Internal training and re-skilling will help to get your team on board and will make it easier to ensure your team has the necessary skill sets to work with new tools and systems. Finally, you can prepare your team by making sure that the leadership team is fully bought into, invested, and embracing new shifts.

Focus on utilizing the right tools

There’s lots of new, exciting technology that looks really cool. However, it’s important to resist the temptation to make changes based on the “coolest tools.” Instead, focus on your business, thinking through your culture, areas where improvement is needed, and key things you’d like to accomplish. With those things in mind, then find the right technology to fit your business’s needs.

Revise your business model

When considering what you want to shift or improve, it can be helpful to update your business model. Technology should be at the core of all systems and processes. If it’s not currently, it will be helpful to make changes to your model to put technology at the heart of things. When doing so, ask some key questions like where can new technology be implemented? How can technology change operations? In what ways will these changes impact teams and customers?

Taking advantage of digital technology will enable you to add value to your organization and stay competitive in your industry. While making key shifts in systems and processes can be overwhelming, with the right planning and preparation, leaders can help to ensure that things go smoothly and that their organization is able to take advantage of the many opportunities new technology offers. Even though it might be uncomfortable, leaders should resist the temptation to shy away from the latest technology and instead help prepare their team for a digital transformation.