Be it startups or SMEs, digital transformation is imperative. The digital era first began in the late 1940s, when universities, militaries, and businesses developed computer systems to digitally replicate and automate previously manually performed works. The digital era then rapidly grew and became more advanced that eventually ushered us into the Information Age.
With all the available resources, the information age, also known as Information and Communication Technology (ICT), became a significant part of the world economy that has changed many businesses and industries. The Information Age has affected the workforce in several ways, such as compelling workers to compete in a global job market. One of the most evident concerns is the replacement of human labour by computers and robots as they can do jobs faster and more effectively.
As of today, companies massively embrace digital-first transformation, especially after COVID-19 crisis in 2020. Effective digital delivery of services and a consistent customer experience to match are table stakes for any businesses hoping to see the far side of COVID-19. Moreover, supporting fully remote or flexible working scenarios for a range of employees is becoming an essential step for companies looking to continue business as now-normal.
In other words, companies that do not deliver a service or product that can be accessed, used, or ordered online are setting out the year economically. Conversely, businesses that have effectively digitised their operations are plowing ahead of the competition. The stark contrast is as Ken Auletta described it, “The digital revolution is almost as disruptive to the traditional media business as electricity was to the candle business.”
The challenges to go digital-first company
According to 2016 State of Digital Transformation, companies undergoing digital transformation have likely enjoyed increased market share and customer engagement, higher employee morale, and increased customer revenue.
With all the increased revenue and business growth, business leaders admitted that they are still going through a digital transformation and have more work to do. The level of digitisation varied greatly amongst companies. Thus, the challenges to go digital-first company also varied from one company to another. Yet, the most common ones are cited to be employee pushback, lack of expertise to lead digitisation initiative, organisational structure, lack of overall digitisation strategy, and limited budget.
Learning by examples: How to overcome the challenges
With those challenges in mind, it is imperative to understand entirely the concept of how traditionally offline, brick-and-mortar and paper-based businesses can transition into a digital-first business. Some mature companies, like Volkswagen and Starbucks, implement this strategy accompanied by embracing new technologies and are able to strengthen their empire. Here’s their journey:
Volkswagen is a German multinational automotive manufacturing corporation headquartered in Wolfsburg, Lower Saxony, Germany. By 2025, the company is predicted to invest $4bn to reinforce its digital ecosystem. This strategy does not only affect Volkswagen’s digital transformation but also helps the firm to take on competitors who are launching comparable strategies. Volkswagen stated that it expects to make around $1.1bn in sales by 2025 from new digital services, such as car-sharing that is connected to IoT, parking, and parcel delivery services.
Starbucks continuously uses data analytics at the forefront of its growth. Since 2008, Starbucks has taken a much more analytical approach when it comes to placing stores. They are using data like population density, average incomes, and traffic patterns to identify target areas for a new store. The company also uses data to align its menu and product in line with customer preferences. Above all else, Starbucks true competitive advantage lies in the exclusive customer data from the Starbucks Rewards loyalty program, which with its more than 14 million users will be the key to their continued success.
Swedish furniture company IKEA uses both an online and offline approach to ensure its customers are satisfied. Their first step is transforming the company into a tech company. In 2017, IKEA Place app, an augmented reality tool that allows users to visualise how furniture will look in their own home, was launched. This newly-added technology helps customers to try out different options beforehand and decide on what to purchase. IKEA also entered the smart home market and is offering speakers and smart plugs. Other technology-driven campaigns and its recent sustainability-focused content series have contributed to IKEA’s status as a digitally innovative brand.
Start the journey: How to become a digital-first company
Companies of all sectors can benefit greatly from technology. Service businesses, in particular, can take advantage of an improved ability to deliver their services to customers via online, access-anywhere platforms. For example, if you are running a service business and build an app for that, your customers are likely to use it – particularly if the app performs consistently, is easy to use and replicates the experience of your customers’ expectations.
For small-to-medium businesses and startups, however, creating a website and/or app-based application might be challenging. Lack of experience, human resource, and budget are among the challenges. Tech Grid team, in this case, can help by providing budget-friendly service to ensure you realise your dream to build a digital-first company. Our team processes your idea with high security and ensures everything is of your expectation. If you are ready to turn your idea into a practical product, come talk to us.
A digital-first company requires a digital-first mindset
While you focus on building a top-notch website or application, you should continue to involve leveraging technology to avoid distilling the idea of digital down to a cool app or optimised website. After all, making the shift to digital means changing more than a software workflow – it requires you to have a digital mindset.
What does it mean to have a digital mindset? It means reconsidering every aspect of a business, from tools that your employees use to the entire organisational structure of a company. Crucially, digital-first does not necessarily mean changing all the traditional into digital – it does mean overcoming the fear of that change. It is adopting the kind of agile, modern mindset that enables startups and businesses to innovate and disrupt so effectively, just like what the aforementioned three companies did.
Here are five rules, proposed by Forbes columnist Joe McKendrick, to develop a digital mindset:
- Leaders find what works and replicate it. Digital mindset leaders transform three times as many processes as laggards. They always seek out ways to reuse technology across their organisations.
- Leaders see adopting new technology as a strategic, not just an operational move.
- Leaders do not take a wait-and-see attitude; they invest in the right tech at the right time that brings big rewards.
- Leaders are firm believers in upskilling employees on a continuous basis. The goal here is to create and enable a workforce augmented by technology.
- Leaders do not believe in boundaries when it comes to both technology and human potential. They embrace a tech strategy built on systems that are boundaryless, adaptable and radically human.