For many organizations, changing established processes can be difficult. We know the old saying: if it ain’t broke, don’t fix it. This polarized thinking is problematic, though, because businesses are complex and processes don’t have to be ‘broken’ to be improved. Digital transformation is one of the most effective ways to update processes and drive efficiency to stay ahead in today’s competitive markets. In this blog post we’ll be focusing on the basics of digital transformation and exploring how companies can leverage technology to transform their business.
What is digital transformation?
Digital transformation is the process of using technology to radically change your organization. It involves an integrated approach to technology that fundamentally changes how you operate and how you provide customers with value. Instead of thinking of technology as a set of tools you use, you should consider it a core part of your business.
If this definition seems vague it’s because digital transformation is an enormous undertaking. It’s not about minor adjustments to existing processes but profound business-wide changes that impact every aspect of your organization, from strategies and business models to personnel and processes.
Understanding the Terminology
Before we look at what digital transformation means for businesses, it’s important to first distinguish between some key terms, specifically digitization and digitalization. These are often used interchangeably which can make an already difficult concept even harder to grasp.
Digitization refers to taking analog information and putting it in a digital format so computers can store, process and transmit the data. A simple example of digitization would be typing handwritten notes – turning text into a digital medium. In business, digitizing usually involves turning paper-based information into digital information. Consider customer relationship management (CRM) tools. Instead of keeping paper contracts and purchase agreements, a CRM solution can be used to generate, process and store these documents online.
This is where digitalization comes in. It involves adjusting business processes to include digital solutions and platforms, but simply implementing new technology isn’t enough. True digitalization refers to changing processes and operations to accommodate new technology. If we use CRM as an example, digitalization is the change to accounting, sales and customer service processes like billing, contract management and onboarding that comes from implementing a digital solution.
So, what do these mean in the context of digital transformation? Digitalization is used to describe projects, like adopting a CRM solution and adjusting processes to integrate this new technology. Digital transformation is distinct from digitalization because it involves several digitalization projects with a view to transforming the entire business.
As we pointed out earlier, the definition of digital transformation is very vague. Most people agree that it involves not only profound change and integrating new technologies across the business but developing change management strategies so companies are more agile and better equipped to deal with change overall.
What is the ‘digital’ in digital transformation?
Technology is the focal point of all digital transformation projects. Integrating more technology in day-to-day operations and using it effectively are the most important steps in the process. Trends in technology come and go, and the tools used in one industry can vary significantly from those used in others.
Typically, businesses want to incorporate technologies that help them collect and use the large quantities of data at their disposal. Everything we do today produces data and businesses that find ways to use that information effectively will have a clear advantage over businesses that don’t.
We already mentioned how a CRM solution can help businesses transform traditionally paper-based processes into digital ones but it’s by no means the only way businesses can go digital. Here are some other tools businesses are using as part of their digital transformation:
- Data analytics: Business intelligence solutions like Tableau are highly customizable and provide a low barrier to entry for data analytics. Dynamic visual tools like tables, charts and graphs make information easily accessible. Connecting multiple technology platforms enables users to combine data for real-time business-wide insights that help organizations make informed strategic decisions about their operations. Use cases range from finance and healthcare to retail and consumer goods.
- Cloud computing: Providers like Amazon Web Services (AWS) offer secure, reliable cloud hosting from many data centers around the world, enabling businesses to meet the needs of their customers no matter where they are. AWS gives users the control and insight they need to ensure performance efficiency and reduce operational costs. Cloud computing providers offer businesses the support they need to make the switch from on-premise hosting to the cloud.
- Marketing automation: Digital tools that support inbound marketing like MailChimp, Hootsuite and HubSpot are quickly replacing older outbound approaches to marketing and advertising such as print ads, billboards and mailers. That’s not to say these aren’t still used in marketing today, but many organizations have shifted their focus to digital marketing. With these tools they have access to user and performance data that helps them optimize their content and more easily calculate the return on their investments for higher performing campaigns.
Benefits and Challenges
The stakes are high when it comes to digital transformation. When done correctly, businesses can develop new competencies, increase operational efficiency, improve customer relationships, drive innovation and effectively use their data to identify new opportunities and increase revenue. With so many rewards, though, there are very real risks that often keep companies from embracing digital transformation.
Digital transformation connects more and more processes, people and tools, creating interdependencies that present challenges for organizations. If one thing breaks or fails, it can cause a ripple effect that impacts other parts of the business that were not traditionally linked. Ensuring all stakeholders understand the new technology and processes in place, and allocating the necessary resources for IT and internal systems can help mitigate this risk.
Keeping pace with change is a perennial problem when it comes to digital transformation. It’s important that businesses stay up-to-date with changing technologies and open to ways that technology can be integrated within their organization. Agility and change management strategies will be crucial tools and key competitive differentiators for successful companies looking to leverage digital business.
MPS: A Use Case for Digital Transformation
Digital transformation can make a huge difference in mature, saturated markets like managed print services (MPS). When margins are small and competition is high, businesses need to look for new ways to differentiate themselves from competitors. Digital transformation is one way that companies can do just that.
The imaging industry looks very different today than it did ten or fifteen years ago. While many in the industry are quick to point out that managed print services hasn’t kept pace with overall advances in technology, very few people can deny that the scope and scale of print management has grown significantly during this time.
In many ways, MPS is the perfect example of digital transformation. MPS providers can digitalize costly and time-consuming manual processes with today’s remote monitoring solutions. Technology like predictive analytics and electronic data interchange (EDI) enable businesses to provide true automation and just-in-time supplies fulfillment. Remote remediation—resolving technical issues by remotely accessing the device—enables businesses to resolve problems issues without ever sending a service technician.
Opportunities abound for MPS providers still collecting meter reads by phone or receiving supply orders by fax. Download our free Digital Transformation Infographic to learn more about digital transformation opportunities in the MPS space: