How to Start Your Digital Transformation: 6 Primary Components
In today’s fast-paced digital world, you have to keep up or risk getting left behind. No matter the industry, it’s more important than ever to transform your traditional business model into a technology- and data-driven operation, in what has come to be known as digital transformation. And while digital transformation is not a new concept, successfully achieving it is no small task.
At Hitachi Solutions, we have been helping companies of all sizes, across all industries, modernize all facets of their operations. Through our experience, we have determined the critical technological and strategic elements digital transformations must have to create positive outcomes. To help give you a better idea of how we help our customers, here is a quick guide to our 6 components of digital transformation.
6 Components of Digital Transformation
Being innovative isn’t easy, but at Hitachi we have been an innovation partner for years, helping companies be more creative through customized automation tools and solutions. On a technology level, we have to stay ahead of our customers – so we are constantly implementing new technologies, building new products and solutions, and training people how to use them. By keeping on the leading edge, we are able to guide customers on their path to technology modernization and digital transformation. From there, customers are able to leverage our tried and true platforms and methodologies to tailor and extend the value of our solutions and innovate on their own.
Ensuring you have a connected environment empowers employees, optimizes productivity and processes, and enhances teamwork. You shouldn’t have to wait a week to hear via email what a customer thinks of a tool or how employees are responding to a new business process? That’s why Hitachi Solutions believes in the continuous feedback loop; a framework where open communication is prioritized, employees get faster results, and companies promote a more collaborative environment. To achieve that level of collaboration, we build, and businesses implement, solutions that enable the continuous loop. When companies prioritize a culture that fosters talent, communication, and innovation, the result is almost always improved collaboration.
The question most companies face today – the factor driving a lot of digital transformation – is how do you thrive in such a fast-paced marketplace? Customers are always going to have options, but your experience is what becomes the differentiating factor to your target audience. At Hitachi Solutions, we have to identify and maximize what it is that you do better than all of your competitors. It can’t be a process where we get an understanding of your market and tell you what to do; our guidance has to be actionable enterprise-wide. Our job is to help you build a system that can be applied to all aspects of your company. All of your projects should encompass the process, and you should get many reusable artifacts that allow you to continuously highlight your experience and differentiate your offerings going forward.
Infrastructure modernization allows you to take operational and administrative expenses and repackage those dollars into programs that drive innovation. Every customer we work with at Hitachi Solutions has some form of infrastructure that could be moved to the cloud or modernized to reduce operational spend. Out of all digital transformation processes, this is usually the hardest for companies to adopt because it asks them to look at operations holistically and understand how to break it down.
More importantly, as companies modernize their infrastructure, they are looking for how and where to innovate. Many customers have a substantial investment in on-premise infrastructure, and the question becomes how do they move it into an innovative environment that they don’t have to heavily manage? We find that the capability and security you get from platform-as-a-service greatly reduces the work you have to do with on-premise solutions.
Everyone uses operational reporting, sales forecasting, and the typical standard metrics when running a business. Creating excellence in those environments means finding solutions that have ecosystem connectivity to the cloud and to capabilities that help companies do advanced things. Using the Microsoft Dynamics platform, and the data that goes along with it, we at Hitachi Solutions have been able to deploy solutions by industry that enable customers to build and scale in the future and improve operational excellence. We have found that our customers don’t want just ERP, they also want predictive and data analytics that can generate outcomes in real-time. This helps us ensure that companies are doing it the right way on a platform that enables innovation from the beginning.
Information and Insights
When creating an innovative environment doing automatic builds and deployments, all of the metrics from that project need to go into the knowledge repository. With a consolidated knowledge repository, all of the systems living in your business ecosystem can interact with and access each other’s data, automatically sharing valuable insights with very little additional technical work. When you create an environment where all employees know where vital data lives and how to access it, more people can make informed, data-driven business decisions. In building this repository, we also layer in a cognitive search function on top of the analytics which allows you to find things that aren’t necessarily in standard reporting. By combining search capability and analytics capability, companies can maximize their data.
Digital Transformation FAQs
Q: What Is Digital Transformation?
A: Put simply, digital transformation is the idea that businesses should utilize new technologies and business models to motivate their employees to be more productive and to provide value for customers. Microsoft defines digital transformation as: “The realignment of or investment in new technology, business models, and processes to drive value for customers and employees and more effectively compete in an ever-changing digital economy.” Digital transformation isn’t specific to any one industry; instead, it applies to any industry marginally affected by the advent and evolution of technology.
Q: What drives digital transformation?
A: There has been a long-standing debate about what exactly drives digital transformation – is it technology or strategy? Technology will always exist and play a role in business operations – it’s a matter of how effectively organizations use it. Therefore, having a robust and comprehensive strategy is much more critical to the success of digital transformation. In fact, IDC predicts that by 2020, 30% of G2000 companies will have allocated capital budget equal to at least 10% of revenue to their digital strategies.
Q: What does a digital transformation framework look like?
A: There is not one, universally applied digital transformation framework. It is largely subjective, but some important business operations that must be included in a digital transformation framework are:
- Customer experience
- Operational agility
- Culture and leadership
- Workforce enablement
- Digital technology integration
When developing a digital transformation strategy, all of the aforementioned functions must be considered and incorporated in decision making.
Q: Why does digital transformation matter?
A: To put it simply, digital transformation is required for any enterprise that wants to remain competitive in today’s marketplace. Customer expectations paired with competitor innovation mean that any business, in any industry, must be agile across all digital components of their business. The IDC estimates that 40% of all technology spending will go toward digital transformations, with enterprises spending in excess of $2 trillion in 2019. Disruption is happening across all industries, and investment in digital transformation is essential to stay relevant and create new opportunities. What’s more, a survey of executives across verticals showed that the top benefits of digital transformation were improved operational efficiency (40% ), faster time to market (36%), and ability to meet changing customer expectations (35%).
Q: What does a successful digital transformation strategy look like?
A: Again, there is no one size fits all strategy. But McKinsey & Company study found that the five primary factors that lead to a successful digital transformation are:
- Having the right, digital-savvy leaders in place
- Building capabilities for the workforce of the future
- Empowering people to work in new ways
- Giving day-to-day tools a digital upgrade
- Communicating frequently via traditional and digital methods
Q: Why do digital transformation projects fail?
A: There are many reasons a digital transformation might fail – poor strategy and lack of buy-in are just two of the many causes of failure. And while digital transformation is a major undertaking, studies show that businesses that incorporate more technologies in their transformation are more successful. Beyond that, a Harvard Business Review report cited two factors that frequently cause such projects to fail:
- An unspoken disagreement amongst leadership about project scope and goals
- A divide between the digital capabilities supporting the pilot project and the capabilities available to support scaling the digital transformation
Q: How can I restart stalled digital initiatives and transformations?
A: Another survey found that 70% of organizations experience some form of delay or stoppage of their digital transformation process. Whether it’s complex technologies or simply changes to workflows, updating processes across a business is bound to hit snags or roadblocks. A McKinsey study found that organizations must look internally, and do the following to successfully jumpstart their stalled digital transformation:
- Implement comprehensive change-management efforts
- Launch internal-communications programs
- Clarify the transformation’s projected impact
At Hitachi Solutions, we have created a comprehensive set of packaged offerings designed to guide, streamline, and speed up successful digital transformation journeys – from strategy to reality. Through our Digital Compass program, we help companies determine their technology transformation maturity and goals, create an actionable roadmap to success, and efficiently execute said plan. To learn more about Digital Compass or Hitachi Solutions digital transformation solutions and services, please contact us.