Digital Transformation

Digital transformation is the delivery of significant business change to embed or leverage digital tools, systems, processes and ways of working. It differs from a standard technology implementation in that it requires wider change – or transformation – of the business, and usually the achievement of strategic business goals drives the transformation, as opposed to just the delivery of the technology itself.

In order to remain competitive, businesses need to leverage new digital tools to be more productive, efficient and innovative. This is especially true in today’s business landscape, in which digital innovation is happening at a more rapid pace than ever, particularly with the advent of AI. Businesses that don’t or can’t successfully adopt digital tools and ways of working through transformation will struggle to grow and keep up with their competition.

Digital transformation helps businesses by making their processes more efficient, their people more productive and happy and their customers more satisfied. These benefits contribute to higher competitiveness, lower costs and, ultimately, greater revenues and profits.

As businesses seek to digitally transform to outpace their competitors, they and their suppliers will lead further innovation to improve on existing tools and technologies. These can in turn be implemented in other industries or geographies to drive business benefits there, helping to spread digital evolution on a wider scale. A key example is in AI, which has seen major innovation in almost all industries, and therefore in the personal and professional lives of people around the world.

AI (artificial intelligence) is a major driver of digital transformation in today’s business landscape. The rapid rise of AI technologies can enable businesses to be more productive, effective and innovative, and therefore many organisations are digitally transforming to leverage emerging AI tools and stay ahead of their competition.

Each digital transformation programme will follow a different process in order to be delivered successfully, depending on the organisation implementing it, the technologies involved and the people leading the transformation. However, a key element in every transformation should be how your people will be engaged with the business change. Afiniti’s model, seen above, shows how people can be put at the heart of process, systems and data.

The time taken to complete your digital transformation will depend on its complexity and that of your organisation. For example, introducing a new tool to a single function will be faster than rolling out a new ERP that underpins your entire business. Consideration must also be given to the time taken for digital tools to be truly embedded. Implementation is a key milestone of your transformation, but efforts must be made to ensure new tools and processes are adopted and used sustainably for the long term.

Unfortunately, multiple studies have shown that around 70% of digital transformations will fail to realise their full intended business benefits. This is due to a multitude of factors, including a lack of clear objectives, inactive leadership and sponsorship of the transformation, poor employee adoption of the change, fatigue around other digital disruption and the assumption that digital transformation is purely an IT issue, rather than a company-wide effort that integrates people, processes and technology.

Digital transformation services vary. They can be technical in nature, supporting with the implementation of the tools underpinning the transformation, or more strategic, advising on the best tools to achieve your specific business goals. Afiniti’s digital transformation consulting services focus on engaging your people throughout the digital transformation lifecycle to accelerate and de-risk your programme while maximising the realisation of your business benefits.

Digital transformation consulting is the support of organisations undergoing digital transformation through strategic advisory, critical challenge and hands-on assistance. External digital transformation consulting can be utilised at any or all stages of your digital transformation to maximise the chances of successful delivery, adoption and benefits realisation.

A digital transformation consultant is a professional who supports organisations to implement their digital technologies and strategies to ultimately achieve their business objectives. They have expertise in digital transformation that organisations might not possess internally, and therefore digital transformation consultants can be a valuable asset to augment the teams of organisations undergoing digital transformation.

A digital transformation consultant will draw on their specialist experience and expertise to advise organisations at any or all stages of their digital transformation. Their remit will vary based on their client’s need, but could include partnering with leaders to build the strategy for transformation, collaborating with key stakeholders to ensure new tools are embedded or ensuring that people are ready and excited to embrace the associated business change.

You should approach your digital transformation as you would with any other business change. This includes developing a dynamic digital change strategy, ensuring your people are ready for your change, implementing it while delivering compelling change interventions and ensuring the transformation is fully embedded. Learn more about Afiniti’s approach to digital transformation in our diagram above.

The implementation is a key stage of your digital transformation. This is when you will actually introduce the digital tool(s) underpinning your transformation. The technical specifics of your implementation will vary based on the nature of the tools, but regardless of your chosen technology, implementation should also consider how you will engage your people to be excited about the change and to adopt it. This can be done with creative change interventions.

Regardless of the type of digital transformation you are undergoing, the only way to ensure it will be a success is by engaging your people. Without being involved, your people will feel subjected to the business change, rather than a part of it, which can lead to fear and in turn resistance to adopt. Therefore, you must put your people at the heart of your digital transformation from the outset.

The 4 main areas of digital transformation are data, the optimisation of the information underpinning your organisation, process, the ways of working to best leverage your digital change, tools, the technologies used to digitally transform, and people, the teams or individuals ultimately responsible for using and embracing your digital transformation.

Larger organisations generally have more complex technology architectures, comprising multiple, unintegrated tools used by different functions and in different ways. Therefore, replacing these tools with new digital technologies in a way that ensures users will embrace them requires significant digital transformation. The scale of transformation is greater in larger organisations with more complicated infrastructures, and less so in smaller organisations with fewer tools and people.

Because of its complexity, digital transformation can throw up a variety of challenges. These might be technical in nature, for example if your chosen tool doesn’t implement or work as intended, or more cultural, for example if your people don’t adopt your new tool. In any case, thorough planning of your digital transformation and a robust but dynamic change strategy should enable you to anticipate and mitigate most challenges that might arise.

Customer experience is a major driver of digital transformation. As new tools and technologies emerge, often with the ability to enhance the customer experience, customers expect this higher level of service from all businesses they purchase from. Therefore, organisations need to embrace and proactively drive digital transformation to remain competitive, retain customers and ensure their long-term success.

Your digital transformation strategy needs to identify which business benefits you hope to achieve by transforming. Critically, these need to be agreed with the other key stakeholders who will be responsible for helping to deliver your transformation, including other senior leaders. If they aren’t aligned to your strategy, they and their teams might not be working towards it, which will seriously hinder delivery and achievement of your business benefits.

The strategic roadmap for your digital transformation should include key milestones for your planning, implementation and embedding. You should start with the end in mind, agreeing on your business objectives and working backwards to determine how you will achieve these through your digital transformation. Having a digital transformation roadmap will help you to measure the progress and success of your transformation as you deliver it.

The success of your digital transformation should be measured by the achievement of your intended business benefits. These need to be agreed at the outset of your transformation, and should be driving the transformation in the first place. By embedding measures and key milestones as part of your digital change strategy, you can measure your progress and success at regular intervals to ensure you are still on track and whether any course correction is needed.

Digital transformation doesn’t stop with the implementation of your digital tools. You must ensure your people adopt those tools as part of their day-to-day ways of working through regular reinforcement or communication. Beyond this, because of the fast-paced nature of digital innovation, organisations are likely to need to continually digitally transform to remain competitive and futureproof.

Agile digital transformation is a method of digital change that leverages an iterative approach to break the transformation into smaller segments alongside a continuous improvement ethos that promotes cross-functional collaboration. Due to the fast-paced nature of digital innovation, organisations should seek to be agile in their transformations so they can quickly respond to new product and market developments.

The oil and gas industry is undergoing significant change in order to ensure long-term survival amidst a global shift to more sustainable energy production. To achieve this, oil and gas businesses will need to digitally transform to become more efficient, competitive and profitable so that they remain futureproof. Digitalisation will also enable them to adapt to new, greener ways of working and higher customer expectations at a greater pace.

Digitalisation tends to be more focused and smaller in scale than digital transformation, seeking to digitalise specific processes or operations. Digital transformation involves major change to business strategies and ways of working, often across multiple functions and geographies. Digitalisation may be a key component of digital transformation, but the two are different.

Afiniti are specialists in digital transformation and have delivered many programmes of varying type and scope. Explore our digital transformation case studies for real-life success stories and behind-the-scenes sneak peeks of effective digital transformations, including how these were achieved through Afiniti’s digital transformation consulting.