The four primary focus areas of digital transformation are business processes, business models, domain expertise, and culture and organization. Each focus area builds upon the others to create a better experience for companies and customers by maximizing efficiency, minimizing costs, optimizing production cycles, and improving products and services.
- Business Processes — The “digital transformation” of business processes has become a ubiquitous term, especially as an increasing number of productivity apps emerge on the market. However, not all solutions are equally effective. The key to digitally transforming business processes is:
- Mapping out the entire business system
- Understanding requirements for each step
- Formulating the best model
- Finding the right solution
Although organizations can develop tech solutions in-house, there are many turn-key options that are customizable and accommodate standard business processes. Examples include customer relationship management (CRM), project management, accounting, and social media management software.
- Business Models—The digital transformation of business models has become more important as digital-native companies have grown in market share. Netflix began as a lender of DVDs and redirected its efforts towards streaming. After pivoting to a digital business model, Netflix achieved exponential growth and nearly eliminated its reliance on physical inventory, expanding its reach to any household with an internet connection.
- Domain Expertise—Domain transformation leverages a company's advantages in one domain to extend its competitive reach into another domain. For example, after Amazon displaced competitors in the publishing space, it created Amazon Prime, its own brand of streaming services, and Amazon Web Services (AWS), its cloud computing and infrastructure services. By leveraging its technological expertise in delivering internet resources at a mass scale, Amazon could not only enter into a new domain but become a dominant player in it.
- Culture and Organization—Organizations and company cultures must adapt to the shifting landscape of digital business. Consider the many ways that web and mobile technologies continue to change how business interactions occur. These transitions happen more seamlessly in organizations where the culture supports and enables digital transformation.
Companies succeed in this arena by emphasizing innovation, adaptability, agile development, and technology in their values, principles, and mission. For example, when a company encourages data-centric development, each department is more likely to value and implement data-driven analytics solutions to guide their decisions, making for stronger results throughout the organization.
When this type of culture is established, it also becomes easier to recruit and retain the kind of talent that you need to implement new technologies successfully. By aiming talent and resources toward a clear goal of digital transformation, organizations have the potential to become formidable.
