More and more organizations are investing in digitally transforming their operations, knowing that it is a game-changer in today’s business market. Yet, according to Gartner, “53% of the organizations [they] surveyed remain untested in the face of digital challenge and their digital transformation readiness therefore uncertain.” An alarmingly high number to say the least. However, CIOs, and other C-level professionals can prevent common mistakes and successfully lead digital transformation programs and management by adhering to some best practices. This approach helps establish a robust digital-first business model that prioritizes agility, customer experience, and data-driven decision-making.
Strategy for Digital Transformation
Building a digital-first business model is garnering widespread interest from organizations because digital transformation has a direct effect on business outcomes. That said, competition from other startups has necessitated the transformation to digital for many organizations. In an article by Kieth O’Brien and Amanda Downie for IBM, it states that to “maintain their current business value and hopefully grow, organizations must take transformation into their own hands to establish new capabilities as a bulwark against competition and fuel for growth.” This perspective is shared by many industry leaders and analysts who view digital transformation as a critical component of modern business strategy.
So, how do you get started if you haven’t made the switch to a digital-first business model? Here’s three best practices to add to your digital transformation strategy to get you started:
- Collaboration is Key: IBM points out that digital transformations are likely to fail without the leadership of C-suite to help drive goals. Departments will need to collaborate. A successful digital transformation strategy involves CEOs working together with CIOs.
- Clear Goals: Given the investment of digital transformation it is important to monitor your return. Keith O’Brien and Amanda Downie identify that it is a good idea to plan out goals and milestones for example, “organizations might shift from traditional telephone-based customer service to digital innovations like chatbots or knowledge-base wikis. This transition can lead to quicker resolution of customer service issues and increased customer satisfaction.”
- Embrace the Change: Transitioning to digital operations and building a digital-first business model opens doors to many partnerships. IBM gives this example, “organizations that enable APIs can share real-time information and data with partners to better serve each others’ end customers.” This is just one example of expanded partnership with digital transformation. The road to transitioning to digital operations is paved with many opportunities for partnership so make sure you are partnering with the right people.
Platform Business Models
A platform business model is aligned with the principles of being “Digital-First” as it relies heavily on technology to facilitate business operations and interactions. Primarily operating through digital channels, platform business models facilitate exchanges between two or more interdependent groups, usually consumers and producers, by creating and maintaining digital communities and infrastructures. For example, companies like Uber, Airbnb, and Amazon operate platform business models where the core transactions and interactions occur primarily through digital platforms, leveraging technology for efficiency, scale, and user engagement.
Success of Platform Business
Harvard Business School Associate Professor Feng Zhu notes in Winning with Digital Platforms, network effects have contributed to the success of social media companies like TikTok and Facebook. “The more users are actually using TikTok or Facebook and creating content—distributing content on those platforms—the more valuable that platform is for every other user who’s considering joining it,” Zhu says. An article from the Harvard Business School adds that “beyond improving scalability, transitioning to a platform business model can lower operational costs” giving the example of e-commerce platform eBay. eBay “doesn’t hold inventory, instead providing a marketplace where sellers can list items that buyers can purchase. Its model eliminates the risks and costs associated with inventory management, such as storage, obsolescence, and supply-chain logistics.” Platform businesses, like digital-first organizations, have increased scalability and flexibility. Customer Experience (CX) with Digital
Customer Experience (CX) with Digital
“Going digital” and moving to a digital-first business model can improve the customer experience (CX). IBM notes that organizations “must respond to customers’ increasing pain points and needs. Customer expectations have changed since the pandemic began and organizations must change to meet them.” Digital transformation allows organizations to interface with customers like never before. If done right, this can greatly improve CX and satisfaction, improving your organization’s success.
The journey to digital excellence is lined with challenges, but also abundant opportunities for those who are prepared to embrace change and drive forward. Whether it’s through enhancing customer experiences, leveraging platform business models, or fostering partnerships, the path to digital transformation has potential for significant business outcomes. Leaders who recognize the importance of a digital-first approach and commit to continuously adapting their strategies will not only survive the digital challenge but will thrive.
Resources: Gartner, IT Roadmap for Digital Business Transformation, Harvard Business School, 3 Benefits of Transitioning to a Platform Business Model, IBM, How to Create a Robust Digital Transformation Strategy
