Innovative companies have been busy rebuilding legacy interactions using apps and the internet. They’ve created digital resources that they also make available to other companies so the other companies can leverage them to add value to their organizations. The innovators have been rewarded with exponential growth. Think of Amazon, it’s not only a digital retailer but it opened its platform to other resellers, enabling resellers to grow much more quickly than other retail companies that haven’t opened their platforms, such as Target.
Companies that had already begun digital transformation projects going into COVID-19 were much better positioned to take advantage of these innovations and adapt during the pandemic, including converting legacy interactions to digital by using existing platforms rather than building their own. The interactions that have proven to be the most profitable to convert are the ones that make it easier to interact with customers digitally.
Now that we’ve entered a different phase of the pandemic, customers still want to interact online — why go back to the old way?
Reports show companies that have undergone digital transformations are expected to contribute to more than half of the global GDP ($50 trillion) by 2023. The new way is highly effective and profitable, which means it’s a significant trend to consider for your business if you haven’t already.
Digital transformation can enable your company to build value and grow by using apps, external platforms, and infrastructures that other companies have already developed and are making available to you.
Here’s what you can do to be ready to leverage innovative digital platforms:
1. Start by laying a stronger foundation
Take a look at your current systems. Retiring old systems and modernizing your technologies now, including migrating some computing to the cloud, can help improve your company’s productivity, agility, and resilience and enable you to go to market in entirely new ways. Reviewing how well your current systems are serving you while everyone else is going digital will give you insight into the technical foundation you need to grow well into the future.
2. Reinvent your business model
Ask your team — how can we create customer value and drive profits by leveraging digital technologies? It’s an especially important question if your existing business model may be unsustainable. For instance, 10 years ago, the Netflix business model was based on sending DVDs to customers through the mail. By reinventing its business model, moving operations to the cloud, and pivoting to a subscription-based service, Netflix offered movie streaming with instant gratification — and it experienced a revenue surge to the tune of $145 billion. Where would Blockbuster be if it had asked the same reinvention questions?
3. Use data to make more informed decisions
Digital transformations allow companies to access and analyze data better. With better data and analytics, you can make more informed and accurate decisions, which can accelerate growth. The kind of insights digital technologies provide include the ability to understand better what your key stakeholders want so you can offer them the most relevant products and services to meet their needs. Your sales will increase accordingly.
According to PWC, 60% of senior executives believe that digital transformation is critical for business growth in 2022. They expect to invest in a variety of technologies, including AI, digital identity, 5G, and IoT.
4. Tailor your customer experience
Companies like Amazon suggest products based on each customer’s purchasing habits along with their age, gender, geography, and income level — data acquired by using artificial intelligence. Predictive modeling collects data on your customers’ habits, such as past purchases, and creates an algorithm to find other products they might want to buy. This advanced approach lets companies individualize each customer’s buyer’s experience to meet customer needs, boost their satisfaction and loyalty, and to make more sales.
5. Take small steps
You don’t need to have the tech budget of huge enterprises like Amazon or Netflix to achieve a successful digital transformation. The key is focusing on small, manageable steps — and doing a lot of research. To determine which features and functions are most important to meet your business goals, find a knowledgeable technology partner to guide you in developing a step-by-step plan to get ready for your digital transformations.
6. Ingrain digital transformation into your corporate culture
Successful digital transformation requires internal buy-in. Employees may initially fear change – or be resistant to it – so make sure to spotlight the benefits. When they understand how the ability to streamline tasks, provide better customer service, save employee time and hassle, and increase sales is good for everyone, they’ll likely embrace the change. Make sure to provide plenty of training so employees feel comfortable with the changes and use your new tools to elevate key metrics throughout your organization.
7. Prioritize cybersecurity
Cybersecurity has been a growing concern as cyberattacks have risen dramatically over the last few years. Attacks increased by 31% from 2020 to 2021 alone. Part of the increase is due to the pandemic. As companies leveraged digital opportunities in a hurry, they put off making the needed security updates and opened and left themselves vulnerable. Cloud computing is more complicated to secure than on-premises computing so when planning your digital transformation, be sure to have cybersecurity plans in place. Your plans should include the ability to identify and prevent potential risks, guard against vulnerabilities and threats, and determine in writing how you’ll react and recover from breaches and attacks. An updated plan that includes your transformations before you make them allows you to minimize damage and downtime.
A final tip: Streamline your process by working with an experienced technology partner.
Most internal IT teams don’t have all of the knowledge, skills, and bandwidth they need to convert legacy interactions to digital interactions — why would they? It’s a specialized area of expertise that doesn’t come up often for individual companies and IT staff already have full plates. To capitalize on the innovative digital interaction platforms that others have already built, it’s best to look to outsourced experts for help.