For many years, embarking on a digital transformation was a “nice-to-do” for businesses. But digital strategies have become necessary with COVID-19, global economic downturns, and an explosion in technology such as AI and ML. Digitizing your business operations can improve productivity and operational efficiency, help you keep up with changing customer expectations, and introduce new revenue streams. So many companies are turning to digital transformation that global spending on services and technologies that will allow digital transformation is estimated to amount to $2.3 trillion this year.
But before your business takes on a digital transformation, it’s important to implement the right strategy to take you where your company wants to go. This article will dive into four digital transformation strategies to help you understand which is right for your business.
4 Types of Digital Transformation Strategies
- Business model transformation. In this strategic model, a business may be looking to completely revamp part of its operations or processes by digitizing a product or service that was previously delivered through other means. This strategy may be the right one for your business if you’ve identified an opportunity to change how consumers purchase or use a product or a service or keep up with competitors moving in a direction you also want to go.
For business model transformation, it’s important to avoid being reactive to a situation and consider your options first. Additionally, you may need to hire new staff with different skills or train your existing workforce to keep up with the new models.
- Cultural or organizational transformation. This strategy can be challenging to implement as it can impact not only the organization but the staff as well. A cultural or organizational transformation may be necessary if the company has experienced a change in leadership or a significant event, such as a negative industry reputation or a lawsuit. You can also leverage this strategy to change how your business operates and the expectations of your staff toward a more productive and positive workplace.
Digitization of internal platforms to enhance collaboration and the use of staff polls and feedback are just a few examples of how digital technology can enhance a cultural or organizational transformation. Similar to the business model transformation, it’s important to consider the long-term implications, such as training for new platforms and technology.
- Process transformation. The primary goal for this strategy is typically to make internal processes more efficient and simple. A business that undergoes a process transformation may be looking to reduce errors, time, and complexities by rethinking current processes. This could mean automating repetitive or mundane tasks so that staff members can focus on more critical work, which could also minimize errors. Evaluating the performance of your entire software suite will be essential to understanding what you need for a successful process transformation.
It may be tempting to do away with existing systems and get brand-new shiny technology when undergoing a process transformation. However, it’s important to remember that this may not be necessary and that new systems require time to be developed, implemented, and learned. Instead, consider what new updates or features your SaaS applications may have that could address your challenges. And don’t forget about downstream internal processes that could be affected by a process transformation. For example, revisions of the accounts payable process may change the invoice submissions process, affecting external vendors and customers.
- Domain transformation. If your business wants to enter a new market, then a domain transformation may be the right strategy. A few reasons why this might be the case are if competitors or new technology presents a challenge to continuing with a current strategy or if business leaders want to diversify the organization’s portfolio. Entering a new market is an excellent strategy for introducing new revenue streams and products or services. Amazon is one of the best examples of successful domain transformation, branching out from e-commerce to include a streaming service (Amazon Prime) and Amazon Web Services.
Domain transformation doesn’t mean completely abandoning your primary market, but it can be a smart way to leverage existing capital and explore new opportunities.
Right-Sized Digital Transformation
When it comes to digital transformation, one size definitely does not fit all. Whether a business model, domain, cultural, or process transformation is on your radar, it’s essential to carefully think about which one is right for your business. Consider your current goals and look ahead to the future before leaping into a digital transformation strategy.
And, if you need support in developing and executing your business’s digital transformation strategy, look no further than AscentCore. We build world-class digital products that help our clients achieve success. Reach out today to see how we can help your business.