What it is and how to manage it to generate value in the company
On this page you will find a very long and detailed explanation about Digital Transformation.
If you want to get straight to the point, select the path that interests you.
There Digital Transformation it is the organizational, social and cultural transformation preparatory to the creation of digital business. To allow companies to evolve and transform their organization, it is necessary to change not only the way people work, but also their certainties and usual working strategies.
A certainly complex process, especially in the early stages, and which involves a radical change in the work of everyone, even of those who have decided to undertake the transformation: a challenge to get out of their comfort zone and put themselves to the test, learning new skills and competences. . If you have decided to undertake a digital transformation process within your company, you will soon realize the need to acquire new skills , different from those of the pre internet era, to meet the needs of the digital change .
And it is not a question of simple technological transformations, but something more complex and concerning the entire corporate culture .
A new way of working, which requires the CEO, executives, managers and collaborators to change their minds and to reconsider their beliefs to adapt to the new normal.
Therefore “Digital transformation” does not only mean implementing new technologies, but adopting a new organizational approach to improve one’s business strategies.
What is Digital Transformation
In 2020, the COVID-19 pandemic has increased the urgency to achieve digital transformation goals, forcing many organizations to accelerate their entry into the digital world.
After this crisis, they understood that being present on digital channels and having a new digital soul is no longer an option but an obligation to remain competitive on the market. We can therefore say that digital transformation is the fundamental cultural change for all companies, small and medium-sized enterprises, who want to stay on the market.
Many business leaders have not yet understood the meaning of digital transformation and what they are basic steps to be undertaken to design new working models and lay the foundations for digital transformation.
Is it necessary to contact a consultancy service?
What parts of the business strategy do I need to change?
Is it really worth it?
These and many more are the most frequently asked questions about digital transformation that we hear from our customers, CEOs and managers who play a leading role in digital transformation. Rethinking old business models, experimenting, challenging yourself, to become more proficient in the production of services and products, and to compete with rivals are just some of the reasons why transformation is worth planning.
If, on the other hand, you feel stuck or think you are left behind, know that it is never too late to make the change.
There are different stages of transformation and not all organizations are at the same point. Many CEOs mistakenly believe that they are unprepared to deal with change, especially during the initial phase, when moving from planning to executing the transformation. This is because the Digital Transformation is one radical revolution organization, activities, work models and skills, a profound change, capable of questioning our conditions in every operational area .
Contrary to what one might think, Digital Transformation does not apply exclusively to business contexts: the technological innovation it entails also affects other sectors, such as public administration and organizations involved in the social sector. In Japan, for example, the digital transformation aims to intervene in every area of daily life, with the creation of a 5.0 society, an ambitious social project that far exceeds the limited vision of the economy of many other nations. In our guide we only consider its application in the corporate world.
The aforementioned increase of new skills aims to make organizations more people-oriented, more agile, lean and attentive to customers, able to adopt and exploit the opportunities of technological advancement to their advantage to change their status and improve profits thanks to the introduction of new strategies and services.
Digital transformation is a necessary and urgent process if you want to improve your business, especially in sectors where there is a high rate of competitiveness.
The factors that cause the need for a sudden upheaval of corporate strategies in favor of digital transformation, can be of different nature and often concomitant, such as the needs and behavior of customers, economic crises and competition with new, more agile companies. and smart, social changes, such as the aging of the population, the advancement of the diffusion of new technologies and innovative strategies with which it is necessary to adapt in order not to be left behind.
In a nutshell, innovation, customer experience improvement and operational agility are the three fundamental principles of digital transformation, together with the creation of new sources of profit and economic values that cause changes in working models and traditional business processes. But before reaching these goals, it will be necessary to face internal challenges; the first obstacle to overcome in order to achieve the transformation. Digital transformation is a path dotted with multiple interconnected goals, and with which we must deal, in order to optimize processes And create a new ecosystem corporate , where the front-end and back office are closely connected and the various actors involved communicate with each other. Only in this way, creating bridges and involving the various departments, the digitization process will be successful.
People are the key part of change, in all stages of the transformation.
It is important to consider that the offline part must not disappear but must integrate harmoniously with the digital one.
An offline element must always be maintained, as appropriate, to foster human interactions and interpersonal relationships. Nonetheless, even in non-digital operations and human interactions, digital transformation will play a vital role in improving any aspect of user management.
The entire digital transformation process aims to create new skills within organizations, taking full advantage of the innovations and opportunities of recent technologies in the fastest and most advantageous way possible. A path of this type requires a progressive approach and a well-calculated project plan capable of involving all company departments, going beyond the pre-existing company hierarchies.
The project plan must consider that the final objectives are changing and will continue to evolve, since digital transformation is an ongoing journey, as are innovation and digital progress .
The 6 pillars of digital transformation
When deciding to embark on a digital transformation journey, the most important task facing any CEO is not dealing with technology, but with culture. As a business leader, the CEO has a duty to determine what kind of organizational culture he prefers to adopt in his company: an innovative and transformative culture that accepts challenges by admitting failure and that fosters curiosity, keeping the corporate mission consistent. with all that. The CEO, assisted and supported by Chief Digital Officer , has the task of building a culture that is not only able to accept the transformation, but also to adopt it completely to drive it towards success amid a thousand hostilities and initial difficulties.
The US firm Patagonia is a great example for understanding the importance of an independent corporate culture, which drives both operational and deliberative autonomy. Yvon Chouinard, founder and owner of the brand, illustrated it best during an interview a few years ago, stating that he has always done business “on his terms”, without forgetting his origins and respecting the environment and his employees. Having made that thinking the foundation of the entire corporate culture has made Patagonia one of the best organizations in the world to work in.
In addition to one well-defined corporate culture , to carry out a digital transformation process, it is necessary to create a corporate mission aimed at the customer experience. Improving the customer experience is the ultimate goal of every digital transformation process, a pillar that is based on the increase of products and services at every stage of the customer’s purchasing process. The task of the CEO, supported by the Chief Digital Officer , consists in creating the corporate culture and the corporate mission to favor and improve interactions with the customer. As soon as these two concepts are clear, we can proceed with all the other pillars.
You will therefore have to define the type of experience you want to offer your customers at each stage of the relationship with your company, the culture will ensure that your team is prepared and incentivized to offer it and that, at best, is even able to overcome it. In a meeting with the board of directors, Jeff Bezos called Amazon’s vice president of customer service to discuss waiting times for customer service calls. Hearing that the waiting times were less than 60 seconds, Bezos did not hesitate to pick up the phone, remaining on the line for a full four and a half minutes before speaking to an operator. A paltry time for many – especially when compared to the long waiting times we are unfortunately used to – but interminable and unacceptable for the founder of Amazon. This means understanding the importance of customer experience .
The hiring process is handled by human resources, so why ever a digital leader should it take care of that aspect? Because as long as you have established the type of employees you want for your company, human resources will recruit resumes and skills at the expense of culture. The CEO is responsible for determining what kind of people to bring into the team: people who are open-minded, who know how to get involved and who are not afraid to face changes.
Human resources will have to be guided, clearly showing them the prototypes of employees that they want to hire in the company, their requirements and their qualities. The hiring criteria must be clear and known to the whole organization: only in this way can you guarantee the team you want, and that will guide your company towards transformation.
When you embark on the journey of Digital Transformation the innovation it is always present.
The CEO’s task is to support innovation by creating clear and consistent company objectives and strategies with the mission. Hence, the CEO is not responsible for innovation. His role is to guide, and his job to support the team during the various phases of change, to ensure that innovation managers are able to discover new operational processes, to create new services and products capable of generate more profits and improve the customer experience.
Steve Jobs is undoubtedly the CEO who has been able to implement this step better than anyone else: investing in people and without any fear of experimenting or failing.
As you may have noticed, most of these pillars are connected to each other and represent fundamental cornerstones on which to base the digital transformation . Change is a very important phase within the digital transformation process, understood as the ability to transform to become smarter and more efficient. And no! this phase cannot be simplified in any way. Once again, the CEO has a central task, that of recruiting open-minded people , capable of embracing change by breaking away from traditional schemes. In short, to create culture. And the CEO is a primary player in defining corporate culture. The best example of this is the streaming giant Netflix, founded in 1997 as a simple DVD delivery service. Today it has revolutionized the world of streaming, opening the doors to Amazon Prime, Hulu and a new way of enjoying television content. Netflix sensed people’s need to watch movies comfortably at home, without worrying about going out to go to Blockbuster, and it fulfilled it.
They fearlessly embraced and anticipated change, taking a risk that paid off.
So, always be ready to accept change, big or small.
Here we are at the sixth pillar, last but not least, of the digital transformation. There leadership it matters at any stage and at any stage of this business organization revolution, and it represents what the team needs most. It goes without saying that leadership is none other than the CEO. Yes, there are other notable leaders in the executive department, most notably the Chief Digital Officer . But as in any self-respecting revolution, there is a need for a leader, a solid point of reference who knows how to support people during difficulties, and who is able to guide them, amidst a thousand difficulties, in a sea of changes. Only the CEO can direct employees towards the creation of new business models that embrace the concepts of digital transformation.
The Chief Digital Officerwill receive from the CEO the responsibility of driving the digital transformation but they will always have to work together, combining business experience and digital competence.
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The holistic model of digital transformation
We use digital technologies in many areas of our lives and their impact has profoundly changed, and will continue to do so, the world of business and personal relationships. Furthermore, these changes will be more and more sudden, accelerated by the unbridled advancement of technology. Our world is now interconnected and transformations travel from one end to the other without knowing political, social and cultural limits and borders. The expression digital transformation does not fully convey the complexity and breadth of the innovations it entails.
For this reason, many prefer to use the term to use the term “digital business transformation “, in relation to the digital transformations of the business world. In the most generic sense of the term, digital transformation also refers to changes that occur in areas other than business, such as changes that occur in governments and societies, the so-called “disruptive innovation “. It is therefore important to recognize the dimension to which digital transformation refers from time to time, without however relying on predefined definitions and models that are too generic and simplistic.
Digital transformation involves a vast number of processes, technological innovations, changes, transactions, businesses, companies and internal and external actors. In practice, when you are looking for advice on digital transformation, and perhaps consult reports and forecasts, you must keep in mind that it is a universe too varied and complex to extrapolate generic notions and groped to put them into practice within your organization. Although there are objectives, challenges and indications common to companies in all countries, there are also huge differences in areas, sectors and organizations that need to be taken into consideration. And people are different too.
What might work in reality may not work in your organization. It is essential to always recognize the dimension of the term “umbrella” of digital transformation. Digital transformation reference models help you define your vision, but in practice they are too simplistic and generic. Leadership must adopt a much more personal approach, favoring the establishment of innovative thinking in every organizational process; lead employees from above, so they can start experimenting with new ways of managing business processes.
Digital transformation: the importance of hyperconnection between the parties
The relationships with customers, the corporate mission and the final objectives, each of the subjects involved in the business activity, the sensational break with the old patterns fall within the areas of digital transformation .
Applying the digital revolution to the customer experience alone means falling into error, leaving out many other aspects equally important for the business economy.
The role of the Chief Digital Officer is to bring together the various actors and to initiate a digital transformation of the entire organization, bypassing the reluctances of internal departments to realize the business goals.
Digital transformation needs leadership, regardless of its organization, and from the moment in which a holistic approach is followed, the objectives will be pursued without forgetting the impact on the various departments and trying to bridge the gap between the project plan and the its practical application.
As can also be seen from the pilot projects on the path of digital transformation, adopting a holistic approach it is possible to bring about change from top to bottom, through people. But despite the good intentions, even with the decentralization of the organization and information, if the digital transformation does not have strong leadership it will have major impediments and will not be able to pervade the various company silos and close the gap between the various departments and the organization. .
Disruption: what is digital “disruption”
Digital Disruption is one of the most popular expressions of recent times, and can be understood as a digital “interruption”.
It refers to the changes and disruptions that can occur within an industry, ecosystem and pre-existing business model with the arrival of new players who have greater skills in digital business and who have created new solutions and organizational approaches that resulted in the transformation. To remain competitive in such a scenario, companies must implement new strategies and implement new skills which, by force majeure, lead to the path of digital transformation.
Let it be clear that disruption does not only refer to the innovations brought by new employees with disruptive methods. Breakups, in hindsight, affect people, and customers first and foremost. Disruption is a phenomenon that occurs very commonly in human life and is caused by transformations. The way we use technologies also changes and evolves continuously reflecting on our behaviors.
Changes can be brought about by the introduction of new technologies and the way we adopt and exploit them. But the rupture can also affect much wider contexts that have nothing to do with digital technologies. Can we still talk about digital disruption? No. Although digital technologies are very often used to cope with these social changes. Often those who deal with digital digital transformation argue that it’s not the technologies themselves that are overwhelming.
We prefer to say that the methods by which technologies are implemented are always disruptive.
Digital Transformation, a priority to be triggered
In a recent Gartner survey, which involved more than 500 CEOs, 62% of respondents said they intend to take initiatives or projects to make their company more digital. 54% said that the main goal is digital transformation, while the remainder said they have the aim of business optimization .
In another study conducted by Thornton, 69% of Chief Financial Officers and financial leaders intend to augment new technologies within their organizations to improve their business. Nearly half of these said investing in digital transformation will help them differentiate and be more competitive.
Managers understood the impact of digital transformation and they know that in the near future most of the profits will be affected by this important change.
To put it in the words of the “World Economic Forum”: in 2025 the digital transformation will have a value of more than 100 trillion dollars.
The importance of reducing the gap between innovation and implementation
Imagining new paths is easy, but transforming ideas into successful strategies is a little less so.
Most companies do not find it very difficult to create new projects, but many fail when it comes to action, when it is necessary to put new business models into practice and turn projects into concrete objectives.
It is therefore necessary to reduce the gap between innovation and practical application of projects. According to Professor Feng Li, manager and head of innovation at C. Business School, digital has enormous potential for disruption within organizations. This means that the digital transformation of companies is a journey in constant evolution . Here we return once again to the holistic approach. “As organizations become more agile, we see success stories, but we also see complications arise, especially in how they bring new ideas to market,” says Feng.
“Ideas are common, but game-changing concepts are rare gems – there’s a gap between the ability to start generating ideas and the ability to bring those ideas to market, in a relevant way.”
Feng further explains that most of the challenges surrounding creativity come from definitions. Many workers believe that transformation must involve the creation of totally new systems. “Most things already exist: innovation is about creating new value through existing dimensions,” says Feng.
Transform something pre-existing into a completely new way or adopt systems already strengthened by other organizations within your company to exploit them to your advantage. This also means innovating. The biggest benefit, according to him, is that businesses today can tap into a huge amount of ideas. Smarter leaders adapt and leverage these projects in an agile and cost-effective way. Companies that remain competitive, creating new business models applicable in different sectors, have greater opportunities to improve their profits.
So instead of investing in transforming existing models, Feng advises executives to use the profits generated by their business to create new internal and external projects. Feng invites managers to experiment and not be afraid to embrace change if they intend to create an efficient digital transformation. “The hardest part of innovation is finding the pearls that generate high yields,” he says. “However, if you throw a lot of stones, you will break a window somewhere: if you invest in 100 ideas, then one day – when your core business is waning – some of your ideas may have taken off and your company may still be. a producer of results. “
The importance of digital transformation
Digital transformation helps the most daring leaders and entrepreneurs a quickly overthrow the status quo , changing pre-existing economic models. From the importance of Amazon in the retail sector, to the impact of players like Alibaba on the world of B2B sales , traditional businesses and markets have been overtaken by smart and competent leaders in the field of digital technologies.
Nonetheless, most corporate executives are not yet ready to accept change, even though they are aware of the risks it poses to their organization.
What are the areas of application of digital transformation
Digital transformation is something very important that, unfortunately, many business leaders have not yet understood. Too many public and private organizations struggle to keep up with technological changes, while startups arrive first thanks to their new executive processes and their innovative way of approaching the latest technologies. Companies that get stuck on traditional systems slow down and suffer the necessary penalties in economic terms. According to Gartner, two-thirds of managers say their businesses need to keep up with technology to stay competitive.
But speeding up the development process of a static company isn’t always easy. Digital transformation is often understood as an occult art that only a select few know about. There are many business leaders who fill these gaps by turning to highly qualified consultants such as Chief Digital Officer to provide an effective digitization strategy.
Digital business transformation: what are the areas
Digital Transformation touches important business areas and changes them profoundly:
Business processes : multiple operations and activities connected to each other to achieve business objectives, where the organization of business processes, the optimization of business models and new technologies take the field. Optimizing business processes is essential in digital transformation for the vast majority of industries to achieve a mix of both internal and customer-facing goals.
Business models : how an organization works, from the sales sector to the value proposition, from the ways in which it seeks to derive profits to those with which it effectively builds the core business, using new sources of income and abandoning traditional methods in favor of innovative projects .
Business ecosystems : the network of stakeholders and partners, as well as the environment in which the company operates, can influence business, such as company objectives and priorities, regional regulations or economic changes. Based on the digital transformation of connective organizations, new information flows, companies with different backgrounds are building a new ecosystem, in which data and available intelligence become innovative resources.
Management of company resources : Even if the focus is on the management of habitual resources, we are investing more and more in less “concrete” activities, such as information (data economy) and the customer (improving the customer experience is one of the fundamental purposes of most of the digital transformation. And data, information are the beating heart of business, corporate development and any interpersonal interaction. Customers and data must be considered real assets in all aspects.
Organizational culture There must be a clear focus on the customer, agile instructions and a high degree of understanding of the objectives. This can be achieved by acquiring new skills and basic notions through horizontal instructions on different business aspects, such as the degree of digitization, leadership, knowledge between different silos and teams etc … Culture must also be added to the technical aspects of the process, of the business, collaboration and digital transformation. To get ideas to market faster, changes need to be made. This is the heart of IT transformation and operations. In order for IT and OT to collaborate in unison in the company / process, changes need to be made (this does not only concern data transmission and operating technology, but also the culture and processes, which must be fully shared).
Ecosystems and partnership models : two essential aspects for the economy as a service and for the success of digital transformation.
Customer, Worker and Partner Approaches: Digital transformation places people and strategy above technology. Any changes in stakeholder behavior, expectations and needs are crucial. This has developed into many basic transformation processes, such as the importance of customer and employee experience, new business models and partner interaction (which are also constantly evolving). It is vital to understand that technology is not the only solution to improve employee satisfaction and customer experience. People must be empowered and guided, respecting their roles; therefore, technology becomes an additional driver, an integral part of the equation that selects and manages the basic needs of the organization.
What is involved in the digital transformation
Let’s say that the new digital tools are helping managers to create new business models and to radically change the usual internal methods of operation and management of companies. A true digital transformation project essentially involves reviewing business processes and models, rather than focusing on improving traditional processes.
Contrary to what many believe, digitization is not the simple implementation of technological services and systems. Digital transformation should be able to create new business models, improving the customer experience, for example by introducing a self-service service, using data to create and offer new products.
For the management and managers of the company, this creative need is still a problem. Most companies do not have great difficulty in creating new projects, but many companies have failed to implement new business models or to transform these projects into objectives to be achieved. The gap between design and innovation is the reason why the digitization and transformation of pre-existing models are considered as exclusive prerogatives of startups. On the contrary, however, even consolidated realities can review their organization.
Digital Transformation = Digital Evolution?
Most companies are already partly digital. Try asking a business if it’s digital – only 1 in 10 will say no. The others will tell you: Sure, we use Gsuite in all sectors in an advanced way, if this is not digital? And they’re probably right: so many companies have digital properties, web apps, platforms and so on, but that doesn’t mean they’ve embarked on a digital transformation process or questioned traditional models for innovation.
The importance of digitization in the business context
At this point you may be wondering why companies need to digitize.
Companies that have been on the market for many years have built consolidated business models that are the basis of their success and that have allowed companies to resist market volatility.
The most successful Italian companies have a long history. Many organizations have a static set-up and when changes occur (see the economic situation in 2008), they are unable to adapt to the new macroeconomic situation.So, if you consider the different external factors that could threaten the balance of your business ( new technologies, new competitors and new growing start-ups, customer needs and workers’ expectations) you will understand that there are an infinite number of variables that could suddenly make you collapse, taking away from you everything you have achieved so far. Overnight your business, sales and production strategies may no longer deliver the desired results.
To adapt and remain competitive on the market, some leaders choose to adopt new operational strategies, abandoning traditional paths; yet all of this is not enough to remedy the situation and to put the company back on more sustainable roads. This is how the setting up of new revolutionary models becomes an indispensable necessity.
Yet the prospects for digital transformation have not yet fully persuaded business leaders.
From a study published by Fujitsu, the leading ICT company in Japan, the indecision of business managers regarding the possibility of interfacing with new technologies has emerged clearly. Most of the leaders showed a clear concern regarding the costs related to the implementation and adaptation processes.
Looking at Italy, the study shows that 40% of Italian managers consider digital transformation as a revolution in business models and production processes. Furthermore, for 25% of the interviewees, technology represents the focal point of digital transformation.
This shows that Italian companies are interested in transformation and are inclined to use new innovative technologies, such as the Internet of Things, Artificial Intelligence, Cloud and Cyber Security. If you are wondering if your business needs digitization, the answer is clearly: Yes! Unless your organization already possesses an accurate knowledge of customers, your employees are used to giving their best and all technologies are already optimized and updated to provide highly innovative and competitive services / products. Regardless of the sector in which your company operates, employee satisfaction, economic results and competitor activities are the principles behind the digital transformation journey.
The future of digital transformation has already begun
Turning your back on change, choosing to remain indifferent to transformation is a freedom that organizations absolutely cannot afford. The digital revolution has already begun. We are in the midst of a sea change and companies that first embrace new business models will have a greater chance of growth.
Some good practices
As businesses grapple with the different stages of digitization, we show you some examples of four key industries: pharmaceuticals, food and retail, and financial services.
Financial services are a prime example of the impact of new digital technologies on banking system processes. The second sector reveals how entrepreneurs can use digital tools to speed up procurement. In the pharmaceutical sector, a new study highlights the importance of a digital approach and the possibility of improving the provision of services / products through a new digital interaction with doctors and users.
Fintech and the expansion of products / services in the scope
Over the past 10 years, fintech firms – companies that provide financial products and services through the most advanced communication and information technologies – have convinced monopoly firms to reconsider their traditional business models and adopt digital innovations.
Initially these companies only worked with money transfers, loans and paid apps, but now their area of expertise has extended to many economic sectors.
New fintech services include: retail, SMEs, insurance and investment banking. The technologies used range from robotic consulting systems to the most innovative digital registers.
The food trade is a constantly evolving and highly competitive sector, where various players such as convenience stores, discount stores and large chains are active on the scene.
Retailing is therefore penalized and shopkeepers often have to compromise: order a lot but waste the goods; order little and have lower earnings, also losing customer loyalty. With a constantly changing question, how do you guess the right amount of food to order?
To solve this problem, many entrepreneurs are revolutionizing their business models through the increase of technologies such as “machine learning”. A system based on algorithms that, even without a predefined system, allow computers to “learn” from data, thus allowing retailers to mechanize traditional processes and improve revenue and order forecasts. Merchants who have embraced this new digital technology have seen inventory decrease by up to 80% and gross operating margin increase by up to 9%.
Pharmaceutical sector: improvement of interactions with customers
Healthcare is not excluded from digital transformation. In the United States, nearly 70% of users prefer to use an online communication channel to handle medical procedures, while one in five of the largest US pharmaceutical companies has hired a chief digital officer. Yet the pharmaceutical sector clearly lags behind in terms of digital innovation compared to other sectors. This is because when pharmaceutical companies intend to transform their organization they are focusing more on the design of digital services and the provision of new services, rather than the application of new digital strategies in all company departments. Most likely, the causes of this difficulty are to be found in the poor understanding of digital phenomena by the leadership and in the lack of alignment of organizational departments with digital strategies.
The keys to success
From a study conducted by Mckinsey it emerged that the success rate of digital transformation processes has remained rather low and constant over time: the companies that have been successful are less than 30%. This is rather daunting data and it underscores how digital transformations have become even more complicated. Only 16% of the leaders interviewed say that the digital transformation of their company has led to significant improvements in business performance. But even the most technologically advanced industries are in trouble, as are the telecommunications and media sectors, with a success rate of 26%. Traditional sectors, such as pharmaceuticals, oil or the automotive market, are even more disadvantaged, with a digital transformation success rate ranging between 4 and 11%. The size of the company also plays a fundamental role in the success of the digital transformation. In small businesses, there is a 2.7 higher chance of success than in large companies with more than 50,000 employees.
McKinsey’s research has made it possible to identify a series of factors that would be able to improve the chances of success within an organization. These are: leadership, employee empowerment, skill development, optimization of communication methods. Five very important factors, which suggest where and how companies need to act to improve their chances of success in the digital transformation journey. Let’s explore them together:
The importance of leaders in the digital sector
Mckinsey research data has shown that to bring about the transformation both a leader, who has a high knowledge of digital technologies, and a work team capable of effectively adopting the organizational changes brought about by the revolution. Digital knowledge is very important, but without the commitment of leadership, the transformation will not be successful.
Additionally, businesses that hire a Chief Digital Officer have a 1.6x higher success rate than those that don’t.
Companies must adopt critical thinking, regardless of whether or not they have embarked on a digital transformation journey, acquiring new skills to keep pace with technological changes and remain competitive. Businesses must create new strategies, and guide employees towards the acquisition of new skills that help achieve new digital goals in a short time.
One of the essential factors for digital transformation are people, their training and above all their digital skills.
Corporate leadership should in fact:
Reconsider the assignments and responsibilities of its employees and make sure they adhere to the goals of digital transformation.
Hire digital innovation experts from your team to close the gap between pre-existing and digital parts. These figures contribute to improving the skills of employees.
Among these collaborators we find the Chief Digital Officer , namely the experts who deal with integrating new systems and processes of digital work within existing departments.
Chief Digital Officers are highly experienced figures in the corporate sector, they know the enormous potential of digital technologies applied to business, and are able to create links between the digital and traditional areas of the organization.
Together with the CDOs, the technology innovation managers will also guide the company towards achieving a successful digital transformation.
Companies with a higher success rate in digital transformation are those that have invested in talent and staff training. Revolutions, both personal and working, are very often difficult to accept.
To facilitate change, Mckinsey’s research highlighted two fundamental techniques that businesses can use to incentivize people to embrace the innovations that digital transformation brings.
Here they are illustrated:
Ask employees where the transformation could and should take place, giving them a say.
Empower employees. Encouraging and supporting employees during the transformation process is a responsibility of leadership. Leaders must encourage all their employees to experience and accept failure.
Digital technologies in everyday tools
The study also shows how, if success is to be achieved, companies must introduce digitization into company operational tools and processes :
Digitization makes information more accessible within all company departments, doubling the chances of success of the digital transformation
Introducing self-service technologies for workers and business partners exponentially increases the chances of success.
Change standard business operational processes to implement new technologies
Using data-driven technologies doubles the chances of success in digital transformation.
The importance of communication
Communication is one of the main factors of any change, and it also plays an important role in digital transformation. Organizations should:
To communicate the goals of digital transformation to their team. This helps them understand the importance of change. In companies where there is effective communication, digital transformation has a success rate three times greater .
Use new communication channels. Within a context of digital transformation, organizations must experiment with new communication channels and create new innovative ways of working.
Abandon the usual methods of communication. Changing means moving away from traditional methods, such as unilateral communication channels, such as corporate emails, to adopt more modern and inclusive platforms, which offer new ways of dialogue, such as smarter communication platforms such as Slack.
Digital transformation in the marketing and sales areas
Market needs are changing fast and that means salespeople and managers must reconsider the ways in which consumers make their purchases.
While the media have assumed a leading role in advertising in recent decades, today with the new technologies that have invaded the world market, an almost infinite amount of data is available.
Why is it important to know the needs of your customers?
If you are able to recognize the needs of your customers then you can easily meet their expectations. To do this you will need to collect as much data and information as possible about your audience.
L’ customer experience plays a central role in the success of digital transformation. Indeed: many digital transformation processes arise precisely from the analysis of critical points of the customer satisfaction side.
A successful marketing activity consistent with the digital transformation process is totally focused on the customer experience. This means meeting the needs and requirements of the users who purchase or invest in your products / services in the best possible way. As a matter of fact: people are no longer swayed by advertisements. Consumers choose companies that inspire greater trust and with which they are able to establish a relationship customized according to their needs. Digital transformation is a complicated path; most companies are lacking in terms of culture, infrastructure, skills and, obviously, lack a customer-oriented strategy capable of establishing a relationship of trust. Taking this path means taking a complete view of the purchasing process.
A successful marketing strategy within the digital transformation allows you to guide you through the various stages of interacting with the company. But how can marketing and sales undertake the transformation?
1) Through data
Information must be unified and accessible to different departments and external partners. If the data is split across enterprise silos, it will be difficult to learn where potential buyers are in the buying process.
2) Sales automation
To provide a personalized sales experience, experts will need to have a high command of their channels. Being able to recognize the critical points of the user’s purchase path and be sure that their work meets the needs of users at every stage of the interaction with the company.
It is also possible to automate a large number of sales processes, after having correctly mapped them.
3) Continuous analysis of consumer behavior
No strategy can work without careful and continuous analysis of user behavior across different channels. That is of web and marketing analytics And sales analytics . Experimenting, integrating new improvements means adopting a customer-oriented marketing strategy.
For marketers who decide to embrace digital transformation in their departments, we recommend proceeding gradually, setting ambitious goals and adopting more agile strategies that offer minor block changes. We also suggest that they work closely with managers with a broader view of the business to apply their skills to revenue goals.
The customer experience
The centrality of the customer experience in digital transformation has led some experts to focus almost exclusively on the experiences that users live through digital technologies. That is the digital customer experience. This is all wrong.
Adopting a broader vision allows you to understand the importance of following every aspect of the customer journey.
Even in technological countries like the United States, only a quarter of leaders are involved in analyzing the entire purchasing process.
The single customer view and the customer experience mapping these practices are still little known, yet the companies that have created them have not had great difficulties in starting digital transformation paths. Often they didn’t even have to do it, just implementing the state of corporate digitalization. To improve the customer experience within a digitalization path, some fundamental elements are needed, such as the digitization of processes and the optimization of the customer journey with CRM.
In Maia Management we always start from the mapping of processes (user experience, purchasing process, digital process mapping) and we guide the implementation of tools such as CRM.
Digital transformation in the most mature companies
Digital transformation is not just about technologies: in a research for the “Global Executive of Digital Business 2015 by MIT Sloan Management Review and Deloitte”, available online, strategies are identified as an essential factor for the success of digital transformation.
During the study, companies were asked to rate their level of digitization on a scale of 1 to 10. The results led to the creation of three levels of digital development:
In development: 45%
According to the data collected, the most mature companies are focused on the implementation of technologies such as cloud, social media, analytics and mobile, in view of a reorganization of their business processes. Less digitally advanced companies focus on applying new technologies to problem solving.
In more mature companies digital strategies are used for improve economic activities .
The possibility of redefining the business in a digital transformation process is mainly due to the strategies carried out by leaders who create a corporate culture capable of revolutionize the status quo . To do this, you have to take risks. And companies that do not accept this challenge are unlikely to be successful.
It also emerged that workers, of all age groups, want to join companies that invest in digital transformation.
Most of the respondents, aged between 22 and 60, want to work in digital companies. People prefer companies that are innovative and able to stimulate them . Risk-taking should be a normal business culture. The prerequisite for success is the acceptance of failure.
According to Phil Simon, an expert and writer of several books on the impact of digital technologies, risk aversion is a real obstacle to the success of many companies. “For any company like Google, Amazon or Facebook that takes major risks, there are just as many large companies that don’t. Today, the costs of inaction almost always outweigh the costs of action.”
Eliminating risk aversion is not an insurmountable undertaking. We need a clear digital strategy, which only 15% of the most digitally mature companies have. Furthermore, many companies have not yet understood how digital technologies can affect business.
According to Nicholas Carr, we must not make the mistake of making technology an end in itself, especially in organizations that are new to digitalization. For 80% of respondents, the primary goal of digital strategies is to improve the customer experience. And they all agree that the digital transformation has now begun , 76% admit the importance of digital technologies within their organizations.
What is the “digital framework”
Your company may already be on the path to digitization, even without you realizing it. If this is your case you will need to plan a framework, and with some urgency, in order to guarantee the effective success of the transformation.
Digital transformation is never easy for any company, which is why the digital framework is able to provide essential guidance in a delicate moment and in an innovation start-up phase.
The digital framework enables companies of all types and sizes to improve and succeed in a rapidly changing market by suggesting areas of the organization that need to be changed.
The framework is a guide that clarifies the final goal of the digitization process to all the players involved: the creation of an innovative company capable of exploiting the benefits of the digital age to its advantage. But it doesn’t stop there.
Companies that create an efficient digital transformation framework are capable not only of optimizing but also of improving their organizational strategies. Strategies that allow the company to stay afloat and compete on the market, satisfying user expectations.
In Maia Management we use a defined method (a framework) that allows us to define the digital map to follow to lead the company towards the achievement of defined business objectives (increase in turnover, acquisition of new customers, opening of the market abroad …) . This method is the result of years of work on several companies at the same time, there are now hundreds of companies that have come to us in recent years and you know, you only learn with experience.
The roadmap in the digital transformation strategy
As you will have understood, there is no one and only digitization process. Projects can change enormously according to different organizations.
The purpose of the framework within the digital transformation is to rationalize the processes to be prefixed, in this way, you will be able to optimize investments and guarantee the approval of all interested parties.
Here are some key points of the roadmap to aim for:
– Ensure the involvement of the board of directors
– Identify critical issues and obstacles
– Define the objectives to be achieved
– Plan your investments
– Define the current state of the customer experience
– Evaluate the technologies in use
– Select the best partners
– Plan the final stage in detail
– Make sure internal staff are prepared and involved
– Develop agile organizational processes
– Create a digital culture within the company
1. The commitment of the board of directors
Any change cannot be made without the commitment of the CEO and executive leadership. The Board of Directors must not simply accept the transformation, but must actively participate by communicating the objectives to be achieved to demonstrate that digitization is a primary and indispensable objective for business success. The results will thus be achieved through the constant and daily commitment of all the actors of the organization.
2. Identify critical points and obstacles
Digital Transformation cannot be immediate, the first fundamental step to be taken is to identify obstacles and internal problems within the organization. The launch phase provides clear indications on the problems and strategic objectives to be set. Basically, you need to figure out if there is a real possibility that the transformation will be successful.
To do this you will need to carefully plan all the implementation procedures.
3. Define the goals to be achieved
In the initial phase you will have to define the metrics to monitor, the objectives to be achieved and the problems to be solved.
This document will be a reference point for understanding which strategies are best suited to achieve the set goals and will be the basis for the construction of the strategic roadmap to follow .
Once the objectives have been established, companies can define the steps to follow to achieve a global improvement of the business and achieve important numerical objectives (increase in turnover, increase in the number of customers ..).
Defining business objectives helps to transform all levels of the organization more quickly, also improving the relationship with customers and allowing the company to remain competitive in the long term.
As CEO, remember to clearly show the importance of what digital transformation can offer. Leaders who stick with the old get less noticeable improvements and find themselves having to push change forward.
4. Plan your investments
The transformation can require significant investments.
According to recent studies, less tech-savvy companies may even need to double their IT spending alone.
This means that the investment could most likely translate into lower revenues for a certain period of time but from experience we can say that digital is disruptive and brings results exponentially.
At the beginning the results may struggle to arrive but after a period of construction of the new processes there will be an exponential increase in the results, which will continue to grow over time.
For this reason it is essential to have a dashboard to monitor performance indicators, you must always keep control of costs and numbers, analyzing their progress.
5. Define the current customer experience
Once you’ve defined your goals, you’ll need to understand the experience your users and employees are looking for.
Instead of focusing on the possibilities of new technologies and the limitations of existing ones, you will need to focus on the type of experiences you want to offer the end customer. These are well-defined and detailed objectives, which include how people’s work can be made more agile through new technologies, in order to facilitate user interactions. The customer experience needs to be, in a nutshell, as easy and intuitive as possible.
6. Evaluate the technologies in use
Evaluate the software, apps, and all related processes adopted in the company. Define which technologies must be preserved for the purpose of the objectives set. These simple steps allow you to make the most of troubleshooting technologies, especially at launch.
Often, when we carry out the mapping of the sales process we realize that it is necessary to insert a CRM with marketing automation in order to automate existing processes and create new ones that can truly transform the company.
7. Select the best partners
At this point, after having invested in the previous operations, you will have to take care of selecting the most suitable partners for the operational part. To do this, it will be necessary to carry out an in-depth analysis of all the solutions offered by the different suppliers and to study their proposals well. Remember to evaluate the characteristics of the after-sales support, to eliminate any risk of any unpleasant problems or complications.
In Maia Management we rely on a large network of partners already tested and with whom we work successfully on many customers, a great advantage in terms of time and resources!
8. Define a timeline for implementation
The final phase involves linking all company objectives to a concrete and actionable plan.
A digital transformation process requires commitment and both financial and human resources. It is important to first make a master plan and then a more detailed, precise and accurate one, to ensure that all parts are available. A management calendar can be very useful to help companies manage all operational processes within the established deadlines.
In the initial phase we always create a project Gantt, which helps us to follow defined deadlines and helps our contacts to always be aligned on the work that is being carried out.
9. Plan the launch
Carefully evaluate the processes to start and support them with the resources at your disposal. The launch team is often led by a responsible person, Chief Digital Officer or CEO, who sets the stage for a new corporate digital culture.
10. Make sure the launch team is qualified
Don’t underestimate the importance of a well-trained digital team. A CDO is a fundamental figure in this phase of the digital transformation process, as it is able to develop a strategy for the requalification of the customer journey, which can be that can be extended to the entire organization in the subsequent digitalization phases.
The CDO has the right skills to make change, lead transformation operations, analyze progress against intended goals, and ensure that day-to-day activities are moving in the right direction.
The Chief Digital Officer must be supported by suitable partners and some internal figures with digital affinities. These figures are normally placed side by side by us and become the internal digital arm that guides the operations.
11. Develop agile organizational systems
Organization is the key to the success of any company.
The implementation of digital technologies will create new working methods and the development of new services / products, focusing on the customer experience.
12. Create a digital culture
Attention to customer experience rather than production and execution processes, customer satisfaction, customer intent, and departmental collaboration are key elements of the transformation. In fact, McKinsey’s research showed that 46% of leaders believe that cultural or mentality change is the biggest obstacle to overcome in achieving their digital strategies.
Obviously, companies do not have to completely transform themselves in a short time, but renew themselves in culture and ways of thinking to seize new market opportunities by transforming themselves in a gradual and healthy way.
The definition of Chief Digital Officer
Years ago, when digital was just taking off, the role of Chief Digital Officer was very similar to that of Chief Marketing Officer. The main goal was to convert traditional marketing resources through digital, online tools and new communication methods, including social media, mobile apps, web marketing and all other strategies.
Today, many claim that the role of Chief Digital Officer has evolved to become almost non-existent, the truth is that the position has actually progressed into far more challenging and far-reaching tasks, including marketing innovations, new technologies, digital operations and corporate strategy aimed at increasing the business.
The primary responsibility of a CDO is to define how a company should use digital and how it can improve its performance by applying digital principles to achieve defined business objectives.
Associate digital assets with strategies: Ultimately, the main purpose of digital media and marketing is to promote the goals of an organization. In this sense, a CDO must be able to map the digital assets of the company to make them adhere to the strategic objectives.
Innovating digital processes: develop new business models and analyze old resources to create effective digital processes, without undermining the subtle balance between the various departments.
Develop the digital brand : the marketing area of your company must, at any cost, promote the culture, strengths and personality of your brand.
Attracting new talent: one of the tasks of the CDO is to create a digital brand that can attract new talent to your organization.
Consulting on Digital Transformation for the company
If you are looking for a consulting firm to understand how to implement digital transformation and build a strategic roadmap to grow your business with digital, you are in the right place.
We operate in companies of different sizes, from startups to large companies, through a scalable and sustainable model of management consulting. We are Chief Digital Officer, the outsourced digital directors who work to get you business results through digital.
We guide you in the digital transformation through a defined model, we analyze your specific situation and coordinate the work.
Take the digital test now to understand your level of business digitization, it’s free and will give you a snapshot of your current status.
At the end of the test you can decide to be contacted by our Chief Digital Officers to comment on the results together and get an idea of the path to be built.
How to become a consultant for Digital Transformation
In Maia Management we are constantly growing and we periodically look for new consultants to be included in our team.
We operate in client companies as external Chief Digital Officers (Digital Directors) through a scalable and winning model (for the company and for the consultants themselves).
Becoming a Chief Digital Officer of Maia means operating on the customer using a defined model, our consultants have software available where they can draw on working models, templates, operational frameworks so they can focus on what really matters: taking care of the customer. .
Take the skills test to access the selection.
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