In my first instalment, I talked about what digital transformation is, why it’s different from digitisation and digitalisation, and some of the reasons why it’s vital for future-focussed businesses in 2023 to get on board with it.
That’s the WHAT.
But what most business leaders really want to talk to me about is the HOW. HOW can they ensure that their digital transformation journey is successful?
One of the most important things to remember is that digital transformation is really business transformation. It’s not about bolting on new technologies to a business. It requires strong leadership and commitment to making fundamental changes right across the business.
Ready? Let’s look first at four driving principles behind a successful digital transformation journey, before I talk you through my new transformation framework:
1. The vision and ambition must come from the top, and be driven by the CEO and the rest of the C-level leadership. You can’t just leave it to IT or Marketing to sort out – although of course both will have an important role to play.
2. If it’s not already part of your business DNA, you’ll need to create a culture of decision-making informed by qualified data. That will allow you to see and track patterns in customer behaviour that could enable you to predict their future needs.
3. Do your research. You’ll need to understand what analytics will give you the insights you need, and what technologies will give you the maximum flexibility for the future.
4. Be ready to explore opportunities and create a business model that is more agile, lean and customer-centric.
If you’re prepared to adopt those principles, you’re ready to think in more detail about the roadmap for your digital transformation journey.
For 2023, Warren Knight developed a new digital leadership framework, showing all the key parts of a digital transformation journey and where to focus.
The first thing to notice is that it’s a circular process. Digital transformation isn’t a thing that you do, and then it’s finished. It’s a mindset, and constant process of innovation and change.
Let’s look at the key components.
1. Future thinking
Adopting that agile mindset is vital for your organisation’s future. It will inform how you approach key components of your business and keep driving you forward on your journey. Keeping up with how your audience behaves and the channels they prefer to use will drive your communication strategy, and keeping focussed on the future will ensure that you develop as a digital leader, an agent of change with a clear purpose and intention that permeates throughout the business.
2. Everyday innovation
For this to happen, it’s essential that your business is human-centric. That might sound counter-intuitive when we’re talking about technology, but really, it’s all about people. It’s about being able to get closer to your customers and understand their needs (ideally, before they do), and about building a culture that gives everyone a stake in collaborative problem solving – engaging in creative and critical thinking to identify what could be done differently and what technologies are need to support the change. You also need to be willing to reimagine your processes, and to assess what tools and methods you need for best practice and best value.
3. Competitive advantage
Achieving and maintaining competitive advantage is one of the key goals of your digital transformation. So, developing a clear digital strategy is a vital element. Understanding how technology is going to drive improvements in performance and revenue is vital to enable you to create your roadmap for your transformation journey.
Your decision-making will be data-driven, making use of all the business intelligence, data and analytics that digitalising your business will deliver. The actual technologies you’ll need to adopt will depend on your business, but you’ll almost certainly be using platforms which enable you to automate key processes, and which have the flexibility to scale in the future.
All of these elements will come together in your business model, which needs to encompass an agile mindset to enable you to continue to innovate, as well as a culture which supports your people.
Warren developed a new model whilst looking at how digital transformation has, itself, been changing. The start of the pandemic in 2020 accelerated change, and now, as we go into 2023, there are some clear trends emerging.
Digital transformation trends for 2023
1. Artificial intelligence (AI) and machine learning (ML)
Customers today expect efficiency and speed, and as AI and ML become more common, expectations continue to grow. AI systems come into their own when used to automate repetitive, manual tasks or retrieve information, and to enable 24/7 business operation. — Crucially, AI frees up employees’ time increasing capacity for innovation and impact.
Combining ML with AI drives continuous improvements and the more information it gains over time, the faster your ML system can uncover insights.
Linked to this, freeing up time from mundane and repetitive processes allows employees to focus on innovation and impact, and can also reduce costs. Software robots or development tools that automate code writing through intuitive drag-and-drop and pull-down interfaces complement your AI and ML systems.
3. Everything as a service (XaaS)
Most people are familiar with using the cloud to connect, collaborate, store and access information. For business this can dramatically reduce costs and enable scaling. Many businesses are also moving towards XaaS, where all their products and services are available as a cloud-based subscription.
4. Hybrid working
After forced remote working during 2020, many organisations began to bring people back into offices. As we go into 2023, many have realised that, with the right technology and tools, a hybrid work environment is the most successful for them. The convenience, flexibility and potential cost-savings it offers appeals to leadership and employees alike.
Keeping data (especially customer data) in the cloud and facilitating hybrid working makes protection even more vital. It only takes a single data breach to severely damage your reputation and destroy your customers’ trust in you.
6. Customer data platforms (CDP)
Collecting data across a range of platforms is great, but to really reap the benefits you need the right tools. A CDP unifies all your customer data into a single view, creating a real-time profile on an individual level. That makes it simple to gain insights and adapt your behaviour to get that customer conversion. It makes delivering superb customer service every time, not just a possibility, but the new normal.
To sum up, digital transformation is really business transformation.
It’s a continuous cycle and takes commitment and a clear, human-focussed mindset which starts at the top and permeates the whole organisation.
It’s not easy to get right, but done well, it opens up massive opportunities to grab competitive advantage and achieve future scalability.
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