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Digital transformation: Optimize operations, spur innovation

March 21, 2024 Article 4 min read
Calvin Nichols Steve Schelonka Nick Ferrara
Organizations that struggle with manual processes, siloed data, and lack of real-time insight into operations may wonder: what is digital transformation, and can it really improve competitiveness and create value? The answer is yes — and more.
Three business professionals having a meeting discussing digital transformationOrganizations that struggle with manual processes, siloed data, and a lack of real-time insight into operations may be wondering: what is digital transformation, and can it really improve efficiency, enhance talent recruitment, deliver competitive advantages, and ultimately create value?

In a word, yes.

What is digital transformation?

Digital transformation refers to an organization’s journey to leverage data and technology to unify information across the enterprise and build real-time visibility, better controls, and KPIs into all facets of the business. Digital transformation can (arguably, should) take place in any type of organization — manufacturers; hospitals and health systems; professional service firms; nonprofits; colleges; or units of government. Leaders who make digital transformation a priority and effectively infuse the vision throughout their organizations gain a competitive advantage over those still relying on legacy systems, a hodgepodge of custom-built workarounds, and paper-based processes.

What digital transformation is not is any single piece of software or technology. It’s also not (necessarily) a change in business or operating model. Rather, digital transformation means your applications interact, and data flows, seamlessly throughout your organization so individuals at all levels have current, accurate insights to perform their jobs better.

Digital transformation: Improving resilience, enabling scalability

Improved competitiveness from digital transformation can be realized in many ways. With digital transformation comes the ability to scale easily. As customer requirements grow and change, for example, organizations are better poised to grow with them rather than struggle to make and deliver enough parts or provide services to simply get through today. 

Digital transformation also helps overcome market challenges such as talent availability. Process improvements and heightened efficiency through digital transformation let you reallocate labor from non-value-add tasks to activities that make a difference. Your teams are freed up to work on initiatives that advance business objectives.

Additionally, digital transformation enables enterprises to weather disruption better. Greater visibility into your supply chain and the broader market, tighter control and predictability of operations, and more insightful KPIs and predictive analytics to better understand what may lurk around the corner all help you procure and allocate limited resources, giving you a leg up during disruptive events and downturns.

The digital transformation journey

Digital transformation is a process, a journey, and not an overnight- or quick-fix. At the end of the path lies the vision for your organization, and digital transformation helps you realize it. This requires a strategy and a plan, and digital transformation should be part of every organization’s overarching digital strategy and roadmap.

Digital transformation should be part of every organization’s overarching digital strategy and roadmap.

It’s challenging to find time to initiate and prioritize technology transformation. But imagine the organization whose supervisors spend the first three hours of every day reviewing yesterday’s production data and preparing reports. Nearly all that time could be recouped with digital transformation. Real-time production data and integrated reporting, for example, would allow those staff members to focus instead on analyzing the data and acting on initiatives that further your business goals. If you’re wondering how you’ll have the time to embark on the digital transformation journey, consider that you don’t have time not to start.

And while it might seem overwhelming at first, organizations will begin to see a return as they identify opportunities to optimize their workforce, improve efficiencies, and access data and insights to support greater resilience and reliable KPIs for decision-making.

Identifying key areas for digital transformation

Digital transformation can begin anywhere you have manual or redundant processes, or you suspect performance could be better. What processes can be improved? Where are the delays in getting data? Where are there gaps in visibility into workflows or customer interactions? Are there areas where you question the accuracy of the data going into your KPIs? Questions like these can help identify goals and a potential starting point.

Digital transformation can begin anywhere you have manual or redundant processes, or you suspect performance could be better.

Digital transformation drives innovation

Digital transformation lays the foundation for further optimization and continuous improvement. It’s a mindset shift away from stagnation, inherently fostering a culture of innovation. As the speed of business keeps accelerating, with a strong digital transformation strategy in place you’re well positioned to ask over and over: what’s next?

An innovative culture and ongoing focus on improvement directly impacts your talent — the talent you’ve invested in and want to retain and the new talent you want to attract. If you’re working with disconnected legacy systems, clunky manual processes, and data your teams don’t trust, your best people are going to look elsewhere, and you’ll be challenged to replace them.

Also consider that your customers have already gone through, or will be soon go through, their own digital transformation journey. And these customers will demand your organization be ready to communicate in real time. If you’re not capable, they’ll find others who are.

What does digital transformation success look like?

It takes visioning, messaging, and encouragement from the top to effectively lead digital transformation. It also takes a strong strategy and roadmap. It takes overcoming the “but we’ve always done it this way” resistance to change.

What does success look like? Availability of information to set metrics and optimize and improve the organization. Moving closer to a single source of truth at the speed at which the business needs to operate. Accurate, reliable data to support strategic and operational decisions and meet customer requirements. More resilient processes. Better careers for your people. Improved competitiveness.

Ultimately, digital transformation is a spectrum of opportunity, and the value you get out of your journey depends on your willingness to invest and embrace change. But one thing is certain: Digital transformation is a journey your organization can no longer afford to ignore.

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