What is driving Digital Transformation in 2019?

With a third of companies reporting that they already have a digital transformation program in place, it’s more than just hype. There are two ways to look at digital transformation in 2019; firstly, that it’s a survival issue, and secondly that it’s an opportunity. While either one of these takes on digital transformation can be a stronger driver, they aren’t mutually exclusive. 

A recent survey of over a thousand companies has shown that the top drivers for digital transformation include: 

  • Improving productivity
  • Critical to business success
  • Improving security
  • Products and services that easily incorporate digital transformation
  • Competitive pressures
  • Customer demand

While it’s not ideal for change to be driven by fear, complacency and inaction are arguably worse attitudes for a company to have. In the modern business world, it’s easy for large companies to dismiss threats from smaller, disruptive competitors. However, small losses of market share that seem insignificant early on can become a significant problem later down the line. Business history is filled with examples of companies that ignored market changes, failed to evolve, and suffered because of that inaction. 

Even if fear is one of the drivers of digital transformation, it is clear that most companies see a real opportunity to improve and evolve their business for the 21st century. For many businesses, the case for change is coming from customer expectations. Even if the primary reason is business productivity and efficiency, improvement in customer experience should at least be a byproduct.  

Several key areas are driving digital transformation in 2019:

Greater productivity & driving growth

A digitized business is agile. A productive company delivers more from the same resource, creates more value to customers, and increases revenue. However, most importantly, it can fight for new business on improved terms against the competition, and fend off increased pressure from the disruption caused by start-ups. In research by carried out by Gartner, 56% of CEOs interviewed said digitizations have led to revenue growth. 

Improving the customer experience

People have adopted digital technology into their personal lives, and expect businesses to be able to deliver using these channels – customers want personalized experiences. For decades “putting the customer first” has been a central ethos for many companies, but how that is achieved is changing. 

Improving customer experience isn’t just about customer service; it’s about improving every customer interaction. For example, how sales pitch for new business, marketing messaging, the buying process, and after-sales. An IDG survey shows that 44% of companies have already moved to a digital-first approach for customer experience. Using Digital Transformation as an opportunity to improve privacy and data protection not only protects firms against breaking new regulatory conditions, but also offers customers comfort. 

Utilizing data & new technology

Digital technology impacts every area of an organization; harnessing digital technologies means increased speed to market, improved profitability, and operational efficiency. Cloud-based innovations and increased bandwidth from cloud services enable you to get more from your data, be more agile, and reduce cumbersome IT architecture. As networks become more reliable, speeds improve, and latency lowers, accessibility to cloud-based services improves. Artificial Intelligence (AI) will continue to develop and be used more widely for a variety of applications; it’s no coincidence that AI spending is expected to rise to $35.8 billion in 2019. 

Digital transformation can also bring with it improved data security. Cyber attacks will continue to be a threat for all companies, big or small, so turning to AI solutions to mitigate risks, and embedding the digital transformation ethos of constant 

What’s holding companies back?

So if these things are driving the motivation for digital transformation, what are the problems that stall the process, or worse, cause it to fail? Enthusiasm for digital transformation mustn’t eclipse sensible planning; you need to understand what could cause your company headaches on the journey. 

You don’t need to transform everything

It’s essential to look at digital transformation as the search for efficiencies that improve workflow. However, digital transformation isn’t a juggernaut that changes everything in its path, regardless of whether it is warranted or not. 

The start of any digital transformation journey should be to ask the question “why do we think we need to change?”, review workflows, and explicate what needs to be ‘fixed’. If your research concludes that process change is not required (the process functions well and will sit comfortably next to new methods), don’t force a change for the sake of digitization. 

Promoting digital culture

Digital transformation isn’t just about technology; it’s about people AND technology. Some people will always be resistant to change; at the benign end, employees can be unintentional roadblocks, but at worst, they can be malicious and disruptive. 

It’s only natural that some employees will fear that their job may change, or even disappear entirely. Others may have strong emotions about legacy organizational structures. For some companies with a long modernization journey ahead of them, the concept of digital transformation might be completely incompatible with existing organizational structures. 

In these situations, all employees must be aware of what digital transformation means for the company, their department, and their day-to-day job. To achieve this requires visibility of leadership, clear communications, and achievable goals. Be transparent with the organization and promote the change with conviction. Include staff in the process where possible, and build an inspirational view of the future that teams can champion. 

Lack of agility

Just as employees can be tied emotionally to legacy organizational structures, so can day-to-day and management decision making processes. Digital transformation can be hobbled by slow-moving management decisions not always based on what’s happening on the front line of the business. 

A key component of digital transformation is the transfer of many decision-making processes to employees, and encouraging ‘fail fast and learn’ systems. This approach will allow businesses to develop and grow at a quicker pace, and understand what works and what doesn’t. 

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