Digital transformation helps businesses access technology to better serve clientele. Learn how getting digital transformation right presents opportunities.
Thanks to the disruptions of 2020, the term “new normal” has become part of our everyday lexicon. As organizations across all sectors have abruptly taken their operations online, examples of ad-hoc digital transformation are everywhere: Hospitals and physician practices are increasing their use of telemedicine to serve patients; restaurants are partnering with delivery apps like GrubHub and DoorDash to help their businesses stay afloat; and financial institutions are seeing increased use of their digital products.
While necessity has driven these near-term digital tactics, authentic digital transformation must be systemic and holistic, requiring businesses to transform themselves at a cultural level. For business leaders, the current moment presents an opportunity to pursue changes that may once have seemed impossible.
Middle market executives are already shifting priorities in response to this moment. The majority of middle-market leaders are focusing more on shoring up operational efficiencies, bolstering cybersecurity, and enhancing customer experience as near-term business goals, according to BDO’s 2020 Digital Transformation Survey.
Taking advantage of this moment to achieve success in digital transformation will require pursuing the following intentional steps.
Cultivating a Digital Workforce
A workforce that understands how new technologies work and how they can be applied to achieve business objectives is key to successful digital transformation. As corporate training and education provider PluralSight observes, “Talent holds the key to seeing return from [new infrastructure and technology for digital transformation].”
Becky Frankiewicz, President of ManpowerGroup, reaches a similar conclusion, writing in the Harvard Business Review, along with her colleague, Tomas Chamorro-Premuzic (Chief Talent Scientist): “Contrary to popular belief, digital transformation is less about technology and more about people.” She continues, “You can pretty much buy any technology, but your ability to adapt to an even more digital future depends on developing the next generation of skills, closing the gap between talent supply and demand, and future-proofing your own and others’ potential.”
This means committing not just to short-term training efforts designed to onboard employees to new technology, but to ongoing education that continuously revitalizes your teams’ skills.
"Not only are businesses working remotely, but their clients likely are, too, perhaps for the first time. With employees, it’s important to be open about how to adopt new tools that enable remote operations and decision making—from positive pay to account reconciliation," said Tom Bianco, Head of Commercial Digital for Fifth Third Bank.
“For your customers, it’s about creating sales and service channels that meet your customers where they are—some will still want to meet in person, some will prefer video conference, and some will be in-between, based on macro trends,” Bianco said. “But at the end of the day, the world will never be less digital than it is today.”
Consulting giant PwC embarked on a two-year digital upskilling journey in 2017. According to the company’s Chief Digital Officer, Joe Atkinson, this was vital because the digital literacy of the company’s workforce is directly tied to the outcomes it can generate for clients.
“Digital knowledge for PwC employees can’t be theoretical,” Atkinson stated to the industry organization Chief Learning Officer late last year. Indeed, because their clients look to PwC for guidance on all things digital, “all of our upskilling efforts have to be focused on business outcomes, client outcomes and people outcomes,” Atkinson added.
In addition to creating a Digital Fitness App, a virtual learning tool that helps employees learn about digital trends like artificial intelligence, blockchain and augmented reality, the company also encouraged employees to enhance their skills through proprietary and third-party certification programs. It is this type of sustained investment and effort that will help to cultivate a digital workforce.
If all this sounds daunting, and you’re unsure of how to start building a digital workforce, you can begin by asking the following questions the next time you’re looking to acquire a new technology:
- Does my workforce understand this tool?
- What will training for my teams look like?
- How will we measure the tool’s effectiveness?
Your answers to those questions can guide your first steps toward building a digital workforce.
Fostering a Culture for Digital Transformation
As digital continues to permeate daily life and reshape numerous industries, it’s no longer the province of a single team or division. In a recent interview with Wharton Business Daily, Scott Snyder, a partner at executive search firm Heidrick & Struggles, noted, “The first thing (companies should do is recognize) that digital is not somebody else’s job…Whether you’re the CFO, the CHRO, or you’re running the supply chain [every leader] has to be digitally aware.”
Yet for many businesses, the reality is far more sobering. McKinsey & Co. reports that fewer than 30% of digital transformation efforts succeed, demonstrating the difficulty companies have in changing to a digital posture. And experts agree that culture change is integral to a successful digital transformation.
“When organizations undertake digital transformation and focus only on technology at the expense of culture, that can hinder progress in many areas,” notes Carey Oven, Deloitte Risk and Financial Advisor. Oven reinforces the point, stating, “Technology is definitely part of digital transformation, but unless leaders can ‘win hearts and minds’ throughout the process, efforts can stall or be less successful than they could be.”
What does digitally-focused culture change look like? Stanford Social Innovation Review cites the hallmarks of a digital culture as:
- A distributed instead of hierarchical leadership structure,
- A drive for experimentation and risk-taking, and
- A more agile approach to taking action.
Some of these characteristics are present in the response of automotive digital marketing company, Dealer.com, to the current period of disruption. With the April launch of two new capabilities (Video Chat, which allows customers to communicate virtually with dealers; and CoBrowse, where dealers can guide customers through the purchase process via screen share), the company is helping auto dealers mimic the in-person car buying process.
Says Dealer.com’s Vice President and General Manager, Wayne Pastore, “The pandemic has shown us business challenges, but also presented new opportunities for us to better service our clients.”
Clear, effective communication is key to fostering this type of agile, responsive digital culture. Consultant Serenity Gibbons cautions against letting rigid adherence to corporate guidelines get in the way of empowering employees to be responsive to customer needs. Gibbons writes in Forbes, “As you consider your corporate culture, examine whether you’ve set up enough safeguards to bolster employee decision-making."
Mastering the Technology Part of Digital Transformation
McKinsey has observed that the recent “disruptions…have underscored the crucial role of technology, from supporting remote work to scaling digital channels for surging customers.” But how should businesses approach technology investments, particularly in the midst of challenging circumstances?
One starting point: focus on tools that enable new ways of working and help to improve cybersecurity and business resiliency. For instance, recent events have demonstrated the importance of cloud-based solutions. As futurist Blake Morgan has observed, “Without the cloud…businesses would struggle to share and co-edit document securely, access analytics, and much more." As remote work increases—and perhaps becomes permanent for some companies—investing in such technology will become an even more critical priority for many businesses.
The Future Will Be Digital
The rapid uptick in the adoption of digital is here to stay. Recent data shows that many companies going digital for the first time are likely to continue using these technologies beyond the current moment. From a primarily remote workforce to greater integration between online and offline experiences to the growth of virtual events, the future will be digital. Businesses that cultivate talent, build a digital culture, and approach technology investment strategically will be best positioned to make the most of this new world. Contact your Relationship Manager or find a banker to learn more.