If you want to succeed with your digital transformation, you have an individual, human-centric approach to the initiative. On your journey, success will require constant effort from leadership, individuals, and the organisation to create new avenues of collaboration, using technology to initiate a unique learning and working culture.
The objectives of your company's digital journey will depend on the nature of your business - but the path will intersect between human experience and technology.
Digitisation, digitalisation, digital transformation and digital readiness
The information revolution has impacted every aspect of modern business, from business strategy to the habits of the workforce.
The extent of the digital transformation is enormous, and involves elements of both digitisation and digitalisation, digital transformation and digital readiness. These terms are often used interchangeably, but they have different meanings. In organisations, there is a pressing need to understand the nature of digital evolution and address some of the scepticism that surrounds it. For that reason, it's essential to know the meanings of these terms and understand the role they play in your organisation.
Digitisation means converting existing analogue services, solutions and products, processes or any other analogue format into a digital format. The benefits of digitisation are obvious: operational excellence, efficiency, cost-cutting and predictability.
Remember that digitisation doesn't affect the underlying business model. Digitisation merely creates a near-perfect copy of its analogue counterpart that can be stored, processed, and transmitted at near-zero marginal costs. Think back to when companies moved from having paper customer records in filing cabinets to a digital CRM system - this is what digitisation looks like in practice.
Digitalisation involves the reimagination of a business model based on new forms of digital technology. Digitalisation is a fertile ground for innovation and growth and can have a disruptive impact on the industries in which it is practiced. Amazon, or any other successful e-commerce player, could be seen as a good example of digitalisation, since they have used new digital technologies - the universal adoption of the internet, for example - to underpin their business model.
Digital transformation is the process of evolving your capability to experiment, explore, and exploit new opportunities that are made available by advancements in digital technology. Many companies have started their digital transformation agendas, usually focusing on helping them to adopt digital practices, processes, technologies, culture and business models. These programmes are typically driven by the aspiration to enable your company to increase efficiencies and profit by digitising your existing business. And also to identify new opportunities for growth and competitive advantage through digitalisation.
Every industry strives to take the digital route for an enhanced customer experience. For example, apps for entry approvals, bill payments and maintenance requests for ease facilitating appointments, tracking reports, and digitally maintaining patients' health indices. Today, every business strives to add value to its potential and existing customers, where digital technologies are essential.
Digital transformation truly makes a difference in the customer experience. For companies to truly champion the future of work, every aspect of every company, from strategy and processes to its building blocks and its workforce, should be ready to embrace this transformation.
Netflix could be seen as a company that has undergone a digital transformation - the company started in the 1990s as a video rental service that mailed DVDs to customers. Today, customers have no physical interactions with the company - their offering is entirely digital, and their company structure and ways of working have changed to reflect the new business model.
"Digital transformation is not about digital tools and technology—it is about the approach and new ways of thinking."
- A well-known Jeff
Digital readiness is about the employees' readiness in a company undergoing a technology transformation or going digital. Digital readiness refers to the level of behavioural competencies, cognitive skills, and digital proficiency of a company's employees that helps them adapt and manage the digital transformation process. It indicates whether the employees possess the skills needed to use information technology and effectively manage and control digital transformation.
Simply put, digital readiness is the ease with which your colleagues, you and your organisation can transition to digitised workflows using software and other technology. Employees are the building blocks of any company, and companies must proactively train and support them in undertaking digital transformation for their personal and professional growth.
For a company to completely transform every facet of its business and sync with digital technology, its employees have to get on the train of digital readiness.
Like any other organisational practice, digital readiness begins personally and then ties itself into the work culture. The faster your colleagues adopt new technology in their personal lives, the easier they will apply the same habits and skills at work. You must work consistently to strengthen your current colleagues and build their skills.
Challenges in achieving digital objectives
Every organisation's digital transformation approach needs to be prepared well to accommodate the varied aspects of digitalisation.
It requires defined purposes and objectives, an all-encompassing business plan, and a workforce ready to take on the challenges and hinders to achieving the desired digital goals.
There are two sides to digital transformation – a cultural change, starting at an organisational level and trickling down to an individual level, and a shift in technology, with an infrastructural update that uses new technologies in processes and operations.
However, the true power of digital transformation lies at the human level, with people who execute it.
When a company decides to start its digital transformation, its employees across all levels need to be digitally ready to contribute actively.
Moreover, for a company to truly embrace technology, it will have to cross many hurdles that obstruct the path to digital transformation.
One challenge companies usually face in achieving a digital-ready workforce is that some colleagues may have a mindset block, or not learn what they need to achieve digital readiness. To overcome this block and become willing and able to learn new digital skills is a massive challenge for many companies who want their workforce to be digitally ready.
Understanding the broad scope of the digital movement
Companies often can't explain the broad scope of the digital movement and how deeply it will affect every facet of their business. As a result, while technology continues to enable the transformation of everything it comes in contact with, companies often overlook the micro-changes needed to stay attuned to its pace.
As a result, the skills gap is already becoming a reality for most businesses, and few of thems have come to terms with it. Employees often don't understand why their company and organisation needs to change, which can be a significant bottleneck. They cannot comprehend the importance of digitalisation in terms of the avenues for new growth and opportunities to expand. Companies need to create a dialogue on the vastness of digital transformation, and keep employees at the centre stage of this exercise.
The lack of a people-centric business
The first steps of a digital transformation are often to implement new technologies, change budgets and make infrastructural updates. But the main challenge is the one that dictates all of these – a business approach that puts people at the forefront of digital evolution. Unfortunately, business strategies often overlook the digital skills gaps due to the multi-generational workforce and the fast pace of technological change.
Companies sometimes only take an outside approach to digital transformation and are tempted to transform their customer-facing side. But an inside path sometimes works best, where your colleagues are the first in your digital readiness checklist.
An inside approach ensures that your employees align with your company's vision and contribute to the digital transformation.
An upgrade to new technology needs to be accompanied by support, training and reskilling efforts to get your colleagues on par with the pace of business that you envision for your organisation. A digital readiness assessment for your colleagues can be the first step toward evaluating their digital technologies and devising an approach that accounts for their learning agility. The digital transformation approach needs to have a people-centric approach to maximise the impact.
Digital transformation is about improving and streamlining processes using technology. It is also about supplementing all colleagues with tools based on the equipment they already use, e.g. their mobile phones, and making it an integral part of their workday.
The lack of experimentation
Technology can make processes more efficient and streamlined. At the same time, technology can alter the roles of your colleagues. Your colleagues will no longer work in silos and will constantly collaborate for knowledge sharing.
Digital transformation challenges your business frameworks and touches every aspect of your personal and professional lives. With the changing technology, the workplace culture will recast itself. However, people are naturally averse to significant changes, which is an exciting challenge.
The modernity of digital transformation needs a space where your company and colleagues can take risks, experiment, and embrace failures.
You must build a culture of experimentation, and to give safe space to take risks is part of a sea change. Therefore, companies need to proactively instil a digital culture by starting in a small but significant manner. For example, your colleagues' simple tools to handle tasks must be added to your digital readiness checklist as the first step to introduce technology as part of all daily work.
The lack of digital-savvy leaders
The desired change can only be brought by the right people who lead the way. Digital-savvy leaders must be the catalysts for your company in your digital transformation. Digital-savvy leaders don't need to possess all the tricks of the digital trade; they need to be the masters of reason and demonstrate digital readiness practice and agility for your company and all colleagues.
Digital-savvy leaders are the added advantage to your digital transformation; they aid the pace by leading and setting a positive example.
Are you a digital-savvy leader? Or do you have an ambition to become one? Either way, make sure to take a look at our in-depth guide to digitalisation. It covers more aspects relating to digital readiness, and will give you new knowledge that you'll need when embarking on a journey of digitalisation. Enjoy! There's also an additional guide that you can download for free below.
Founder, CEO & Strategist since 2001. Anders provides thoughts and reflections about what and how to think about onlinification and digitalisation in B2B. Asks a lot of questions, and knows what to do with the answers.