Why is Digital Transformation Important for Your Business?
Digital transformation changes the way your business operates. From systems to processes and workflow to culture, it’s about taking a step back to revisit everything you do as a part of your business. This transformation brings together data across departments and helps you manage every aspect of your organization more effectively.
There is a significant role of ERP in digital business. Implementing the software system is the stepping stone towards your digital journey. It helps you take advantage of technologies such as artificial intelligence (AI) and machine learning (ML) to enable workflow automation and advanced data processing to bring out the highest potential of your business.
In addition to technology advancements, effective digital transformation also redefines your customer experience. It helps you build a customer-centric organization. The AI-enabled ERP software uses intelligent data analytics tools to track fluctuating buying patterns of your customers and accurately predict when they spike to avoid interruptions.
When you have a digital business, you are able to engage customers online, support them round the clock, and build their trust. The loyalty of your customers increases the probability of positive word of mouth, which improves the reputation of your brand.
Key Considerations for Building or Expanding Your Digital Business
Enterprises could pursue successful digital transformation by first creating a vision for their industry. For that, while building or expanding your digital business, you should:
- Use concept, capabilities, assets, and research to identify digital business efforts in your industry.
- Build a team of cross-function peers to develop a digital business concept for their departments.
- Compare your concept with your competitor’s visions to assess and ensure that it is more compelling. If not, determine ways to make the vision so compelling and advanced that it could challenge your competitors.
- Consolidate all your digital business efforts into one unit or coordinate them centrally. Bringing them together would accelerate exchanging ideas and reveal opportunities for combining multiple projects into larger, more coherent outcomes.
A Framework Methodology for Creating a Successful Digital Business Strategy
Implementing profound structural changes to support your digital business strategy enables you to execute a powerful vision for your organization. The best practice takes the form of an “industry vision”, which allows you to tilt the fundamentals of competition in your favour without limiting your digital business to narrow customer interactions or committing to projects of higher value.
To take this approach of creating an industry vision, you need to follow the three steps outlined below:
Step 1: Understanding the industry vision for digital business
An industry vision shows how your business would perform when digital technologies like AI and ML are used to their full potential to automate end-to-end operations. These smart technologies would help you make better and faster decisions while producing more at lower costs and fewer assets.
An industry vision consists of four parts: concept, capabilities, assets, and research:
Concept: An industry vision pursues fundamental change that would affect your business and operations in many dimensions.
Capabilities: To implement the vision, your organization needs a new set of capabilities to make the digital business work. These capabilities would require expertise and if you do not have them already, you need to find partners to help you achieve them.
Assets: As mentioned above, you would need a different set of assets to execute your business processes, including employee, information, and intellectual property (IP). So, hire people to do this work while they would need accurate data about all your operations and advanced analytical tools to analyse how your business is performing.
Research: Once your new digital business expands into new areas, you need to maintain a research program to continually experiment with new digital business possibilities.
Step 2: Taking inspiration from examples
You get a better understanding of what an industry vision for digital business entails by looking at the digital transformation initiatives of some of the large enterprises. None of these companies’ digital transformation efforts were brought to life all at once. They have built the industry vision gradually as they acquire the knowledge and ability to do so. These visions, once successfully created, change the way the industry operates.
Step 3: Choosing the right approach
There are four proven approaches to an industry vision; you can choose one of these.
1st Approach - Creating your own industry vision.
You could become the first in your industry to create a vision for digital business. With this, you would gain the advantage of setting the terms for competition in the industry.
However, when you go first, it also means that you need to wrestle with digital business challenges and would not benefit from other companies' experience.
2nd Approach - Creating an industry vision that supersedes your competitors’ vision.
Many enterprises from your industry are already pursuing a digital business vision. You could analyze and identify the most compelling vision visions and whether the enterprise has capabilities and assets to move faster.
Creating an industry vision that supersedes your competitor’s vision is easier to adopt but could be challenging for you to convince the research and business partners to support your efforts rather than your rival’s vision.
3rd Approach - Join your competitor’s industry vision and try to dominate it.
If another enterprise leads an industry vision that can’t be superseded, you could still lead your company to prosperity in digital business by providing a critical part of the vision. But this approach has a demerit. It allows your competitor to set the terms for the industry vision, which could leave your company vulnerable to being replaced if the enterprise develops or acquires a better solution.
4th Approach - Participate in the vision of the adjacent industry.
If you choose to focus on a layer rather than a whole industry vision, you do not have to limit yourself to native industry. You could find adjacent industry visions and join.
Are You Ready to Start Your Digital Transformation Journey?
An inspiring industry vision is the cornerstone of a successful digital transformation journey. Getting started calls for a clear understanding of your current business capabilities and a blueprint for actions required to be taken to make the change happen.
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