Digital Transformation FAQs: What You Need to Know But Don’t Want to Ask
The ultimate digital transformation cheat sheet.The flow of digital transformation literature appears to be endless. But as the saying goes, the more you learn, the more you realize you don’t know. As the research around digital transformation grows, finding straightforward answers to your questions can become a challenge. That’s why we’ve put together this “cheat sheet” — to provide the most essential and up-to-date information about digital transformation in one place. Here are the answers to the most frequently asked questions.
12 digital transformation FAQs
What’s the difference between digitization and digitalization?Digitalization refers to the addition of digital technology to create new business opportunities and processes. For example, a bank that launches an app to increase access and provide better service to clients has undergone digitalization. Digitization, on the other hand, means transforming existing analog processes into digital ones. Replacing a paper documentation system with a digital one is an example of digitizing the process.
How much are companies investing in digital transformation?Companies are investing in digital transformation with increasing momentum. According to predictions from the IDC, global spending on digital transformation technology will reach $1.8 trillion in 2019, a 17.9% jump from 2018. By 2023, that number is expected to eclipse $6 trillion.
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Who’s responsible for driving digital transformation forward?There’s no clear-cut answer to this question. Depending on the scope of the transformation, the goals it is intended to fulfill, and which technology will be deployed, different leaders in the company will share different levels of responsibility. Traditionally, the CIO led all projects related to changes to the IT infrastructure. Now, however, such oversight is not exclusively the CIO’s duty. The CEO is increasingly playing a role in the strategy development and execution of enterprise-wide technology initiatives. Emerging roles, such as the chief technology officer, chief innovation officer, and chief digital officer also play a role.
What is the meaning of digital adoption and how does it impact digital transformation?Digital adoption refers to the ability of users to use digital tools as they are intended and with maximal capabilities. In other words, users aren’t limited to a few elementary features — they have theability to perform any task or process on a given tool, regardless of how complex it may be. Digital adoption is fundamental to digital transformation success. Without it, it’s impossible to achieve the goals that drive your digital investments. With enough money, any company can buy the most capable software. But unless your users can actually take advantage of what that software has to offer, its potential will never be fulfilled, and neither will your strategic objectives.
What is a digital adoption platform?A digital adoption platform is a solution that enables full usability on any software, website, or app. Digital adoption platforms use algorithms that analyze each individual user’s behavior and needs and deploys tailored, onscreen guidance to ensure they can complete any task. Aside from navigational assistance, a digital adoption platform offers a detailed look into the user journey. It provides data-driven insights on process completion and user behavior to show administrators which features are underutilized and where inefficiencies exist. A digital adoption platform can also be used to automate mundane tasks in dramatically improve efficiency and engagement.
What is digital dexterity?Digital dexterity is the desire and ability of employees to embrace existing and emerging technologies to achieve better business outcomes. It encompasses both skills and attitudes. Cultivating this competency of digital dexterity is an important step toward achieving digital transformation goals. There are four main components of a digitally dexterous workforce:
- Technological aptitude. Employees who demonstrate the ability to learn and exploit evolving digital tools will also be among the most dexterous. However, understanding enterprise software is not an innate skill for most people. An evolved approach to software onboarding must remain a high priority.
- Open-mindedness. Employees need to have an open mind in order to develop an authentic interest in developing digital dexterity. On the other hand, employees with negative attitudes will perpetuate resistance and prevent you from becoming digitally dexterous.
- Business agility. Taking an agile approach to organizational design, business strategy, and workforce development can help you boost dexterity dramatically.
- Ambition. Staff who understand how business is evolving and want to develop greater digital skills will be instrumental in driving your organization forward.
What organizational changes are required for developing a “digital-ready” culture?Becoming “digital-ready” demands several high-level preparations. The most obvious include support from leadership, a place for digital in the core business model, an agile digital strategy, a system that supports rapid decision making, and of course budget to afford digital tools. The less tactical but equally important component is the “human” component. To cultivate buy-in from staff and quell resistance, it’s important to plant the seeds for a digital culture. Catalyzing a cultural shift is no easy feat, but it’s essential to seeing your digital transformation through. A digital culture should promote innovation, adaptability, agility, and drive.
How do you measure digital transformation progress?Digital transformation initiatives look different and are intended to fulfill different goals from organization to organization, so it makes sense that each prioritizes different metrics. Among other measurements, you can evaluate the progress of your digital transformation effort by:
- Measuring the number of active users relative to licenses purchased
- Counting the number of processes performed on new software
- Hiring a consulting service to conduct an assessment
- Using a digital transformation scorecard
- Keeping a pulse on certain productivity indicators
- Contrasting outcomes against predefined KPIs
- Measuring the amount of new revenue attributed to digital investments
What are the biggest barriers to digital transformation success?There many common barriers to digital transformation, any combination of which could thwart your strategy. Some of the biggest include:
- Employee resistance to change
- Unclear vision of user value
- Choosing the wrong vendor
- Lack of flexibility
- Failing to evolve your business model
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How do you ensure effective user onboarding?Effective user onboarding is a prerequisite to both digital adoption and digital transformation success at large. The success of your onboarding is what ultimately determines if your users will benefit from your digital investment or not. That’s why choosing the best software onboarding is an important decision. User onboarding solutions that promote “learning in the flow of work” are the most effective because they enable employees to learn to use new software while they actually perform meaningful work on it. Such solutions should be equipped with contextual guidance, which provides each user with tailored guidance and support in real time. Based on numerous predefined contextual factors, the solution can read and anticipate a user’s needs and proactively deploy support to ensure they can complete any process efficiently.
What does the future of digital transformation look like?The IDC outlined 10 predictions for the future of digital transformation in its latest FutureScape report. Here are three key forecasts.
- By 2020, at least 55% of organizations will be considered “digitally determined,” or committed to the goal of fully adopting and implementing digital tools via new business models and digital products/services.
- By 2023, 35% of employees will be working with AI-enabled tools, such as bots.
- By 2023, 95% of organizations will have adopted new digital KPIs that prioritize innovation of products/services, data capitalization, and the employee experience
How do you know when you’re “done” with digital transformation?The short answer is never. Technological capabiltiies are constantly progressing, customer expectations are always on the rise, and the need to streamline internal efficiencies is ever-present. Even digitally-native start-ups must continue to evolve their digital arsenal. And, as investments in cloud-based systems continue to rise, the need to keep up with updates will be an integral part of overall digital strategy.
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