In recent years, we’ve seen the rise and a fall of a monumental number of businesses. It seems like businesses will rise to the top one minute, and be old news the next. This is a reality of the digital age, and only the businesses that can adapt to changes will survive in the long-term. Due to this, it’s important to ask; what separates the businesses of tomorrow and the businesses of yesterday? The difference is digital transformation.
Digital transformation is brought upon by all the rapid changes in technology. These changes make it necessary for businesses to change too. Those businesses that hold onto the past or refuse to change with the times get left behind. It might sound harsh, but you can actually learn a lot about running a successful business from digital transformation. This guide will explore not only what digital transformation is, but how you can use it for your business!
What is Digital Transformation?
Forbes contributor Erik Larson describes digital transformation as “a mass-extinction event for old corporations and a mass-creation event for new ones.” Although his outlook might sound bleak, it’s actually good news for forward-thinking companies willing to create change. For a simple definition, MIT (News - Alert) research scientist George Westerman defines digital transformation as “when companies use technology to radically change the performance or reach of an enterprise.”
Now that you understand digital transformation as it’s defined, let’s understand it in practice by looking at some prime examples. You probably already know many of the big players in digital transformation yourself. Just look at your favorite services and technology today! Then, think about things that you’ve loved in the past that are no longer around today. From video rentals to iPods, some things just no longer fit into our tech-advanced world.
For an easy example, let’s compare two companies. The first is Blockbuster. They started in the 80s as a powerhouse of movie rentals. They had stores all over the country and were a household name. That is, until Netflix came around offering DVD rentals by mail. This took Blockbuster down a peg, but it didn’t cause total destruction.
Netflix, a forward-thinking company, transformed digitally. They began offering streaming services to rival their mail-order DVD rentals. For a flat monthly rate, users could stream movies and TV shows to their devices instantly! In the meantime, Blockbuster didn’t change. They introduced no similar service of their own, and they quickly lost business because of it.
Netflix isn’t the only business to adapt quickly to new changes and propose solutions of their own. New companies offering new services are popping up all over the world. Businesses like deliveroo and uberEats are offering delivery services from restaurants that previously didn’t offer delivery options. Amazon offers 2-day delivery to Prime members, and even does same-day delivery in some areas. These are just a few of the companies transforming their industries. You can learn from their success to see how you can improve your own business!
How to Use Digital Transformation
Digital transformation isn’t something that’s limited to large, well-known companies. You can commit to searching for your own digital transformations, no matter how small your business is. It’s important to remember that in this wild west of the digital age, nothing can stay. Just because a method worked in the path doesn’t mean it will work tomorrow. Here are some ways to use digital transformation to grow your business:
Analyze Consumer Data
Understanding how to make changes that matter all starts with analyzing consumer data. The answers to complex consumer problems are clearly listed in their data. For example, U.S. based car dealership Carvana recognized a need for an easier car buying experience. This lead them to build a completely online, user-friendly car shopping platform.
Because Carvana utilized consumer data to make a disruptive change to the auto industry, they saw an 118% increase in revenue during Q1 in 2017. This is just one example of a business looking to their consumers to determine problems that need to be solved.
Collaborate for Change
You’re less likely to fix complex problems on your own. If you have a team of people under you, collaborate with them to determine new ways to solve customer problems. Discuss recurring issues, and work together to come up with promising solutions. Together, you’re likely to create something new and exciting! What type of innovation does your workplace value? Make change a reality, not just a promise. Gradual change is always happening on some level, but you can work with supervisors to make it factor of company policy at all levels. For example, there is even an online employee schedule maker for workforce management that has never been easier. Employer-employee collaboration is taken to another level.
Think Tech
There’s no denying the world is becoming a more tech-savvy place. From consumers to big-name companies, everyone has to make the switch to digital. You can start in small ways by transitioning from paper to cloud-based storage. If you can, think bigger.
You can see this in action over a decade by looking at one of the biggest companies in the world, General Electric. Over 10 years ago, GE took on the Ecomagination challenge to develop more sustainable technology. This was a gamble at the time, and clearly the right one since they’ve seen more than $200 billion back in revenue. GE took a big step for engineering, and an even bigger step for the future of clean energy.
Go Global
The world is becoming a smaller place. Today, companies are reaching further with their products and services than ever before. While things like export factoring and manufacturing costs used to get in the way of global initiatives, these are becoming more accessible and affordable in the digital age. This guide explains how export factoring works and how to manage it even as a small business, while things like 3D printing make it easier to build products for a growing world.
To see global outreach in action, look to the most well-known energy drink. Red Bull has earned a reputation of being everywhere at once, and this pays off in brand loyalty and revenue. Red Bull hosts events in every part of the globe, from Red Bull Indianapolis Grand Prix to the Red Bull Soapbox Race in Jordan, there’s nowhere you won’t find the drink that gives you wings. This international marketing strategy helps Red Bull earn its place as the top energy drink of today.
Look Ahead
Most importantly, your business needs to be looking forward. One of the biggest mistakes of businesses who fail is that they are too busy looking behind them, they don’t notice the changes happening right in front of them. Just because the tried and true worked in the past doesn’t mean it will continue working tomorrow. The businesses who succeed in the age of digital transformation are those who can constantly look forward.
Are you ready to use digital transformation to grow your business? Digital transformation has brought a lot of companies to the grave, but it’s also brought a lot of companies to the top. If you want your company to grow, you can’t be complacent. Your digital transformation might only be a few clicks away!
