Eight years ago, John Chambers, former CEO of Cisco, famously said: “At least 40% of all businesses will die in the next 10 years… if they don’t figure out how to change their entire company to accommodate new technologies.”
His chilling words were in reference to the urgent need for digital transformation – the process of using digital technologies to change or adapt a company’s culture along with its operational processes and customer experiences to meet changing market and business requirements. It’s a shift that affects nearly every company, from startups and SMEs to Fortune 500 international enterprises.
Luckily, according to recent research, many took heed. Zippia holds that 70% of organisations either have a digital transformation strategy in place or are currently working on one, while Gartner tops it at 91%. The immediate benefits of adopting a digital model are improved operational efficiency (40%), faster time to market (36%), and being able to meet customer expectations (35%).
While these statistics refer to the developed world, closer to home, many companies are struggling to transform digitally, primarily due to the huge digital divide that prevents millions from participating in the digital economy. However, efforts from the private sector and the Government’s proposed Broadband Infrastructure Project, combined with affordable and hands-on training opportunities in subjects from digital transformation and AI to Fintech and data analysis, will help local businesses bridge this gap and reach their digital transformation goals faster.
The trends driving digital transformation
The Covid-19 pandemic set off a surge in societal and industry changes driving digital transformation. These are the most prominent forces:
- A younger workforce that requires flexibility and hybrid workplace experience
- The need to control costs through automation and removing inefficiencies
- Employees and customers who are digital natives fluent in technology
- Digital disruption, e.g. AI, cloud computing, e-commerce, mobile apps, 5G tech, IoT, big data, etc.
- Customers have more choice (via disruptive startups) and demand faster, more personalised experiences.
Key areas of transformation
For business leaders, it starts with understanding which areas are most affected by technology and then implementing actions to adapt and adopt. These are key areas:
The customer, partner and employee experience of your service or product will have significantly changed. Digital technologies provide a solid experience-feedback mechanism to better understand their needs, preferences, and behaviours.
The integration of new technologies allows businesses to streamline and optimise internal operations. Web 3.0, AI, robotic process automation, enterprise resource planning, blockchain, cloud computing, everything as a service (XaaS), 5G and IoT make processes more efficient, reduce costs and increase productivity.
Business model innovation
Business model innovation (BMI) creates new ways of delivering value, engaging customers and generating revenue. BMI is enabled by new opportunities to diversify revenue streams, global marketplace platforms, and the ability to use data from a variety of sources to make informed business decisions. AI-powered services, process automation, and the use of digital twins to replicate processes or run simulations further impact business models.
All businesses need to transform their company and organisational culture to be able to enact digital transformation. They have to foster a culture of innovation and adaptability – a process that starts at the top and includes changing mindsets, skillsets and organisational structures.
The people skills needed to thrive through change
Although technology is important for driving a company’s digital transformation strategy, adapting to and implementing the massive changes falls to everyone. This is why digital transformation is primarily a people issue, requiring an organisation-wide mind-shift to an open, collaborative, innovative, data-driven, and customer-centric digital culture.
Developing and fostering this “digital mindset” is less about cultivating technological expertise than confidence and adaptability. Employees and teams with strong digital mindsets are typically:
- Adaptive – they respond well to disruption and thrive in ambiguous environments.
- Growth-oriented – they’re intellectually curious and committed to continued learning.
- Perseverant – they’re comfortable with iterative practices and view failure as an opportunity.
How to cultivate adaptability and embrace digital transformation
Upskilling employees significantly impacts performance and talent retention, giving them the expertise and confidence to thrive in a digital-first environment. While some large companies such as Amazon, Airbnb and BP launched in-house digital skills academies to help their employees adapt, not all businesses have this luxury.
For them, MasterStart offers the Digital Transformation and Innovation online short course that equips learners with the knowledge and workplace application experience to bring your organisation through disruptive change into the digital future.
These are the key principles of digital transformation we teach our learners:
- The principles of design thinking that help you navigate the complexity and uncertainty in digital transformation processes.
- How to use data to make informed business decisions.
- Digital ethics for using technology responsibly.
- How to develop an agile mindset for staying (globally) competitive and meeting the evolving needs of a business and its customers in a rapidly changing landscape.