A digital transformation strategy is when a company creates new processes and practices or modifies existing ones with technology to make the company's operations more efficient.
Companies tend to experiment with digital transformation strategies to evolve as technology evolves and meet ever-changing market demands.
The Types of Digital Transformation
Let's look at four types of digital conversion.
Business Process Transformation
Business process transformation refers to the use of enterprise technology to update some internal processes.
As mentioned earlier, these types of technological improvements can significantly benefit a business by minimizing costs, speeding up the supply chain, and improving the quality of the service or product provided.
For example, if a company decides to use RPA (Robotic Process Automation) to automate a routine task that employees previously performed manually, it would be part of an internal business process change.
In this case, the company can reduce labor costs because employees no longer have to be involved in the task in question. In addition, the productivity of the workers who did the work before would increase because they could now do less tedious tasks.
Business Model Transformation
Changing the business model aims to change the traditional way of working in the industry.
When a company undergoes a business model change, it adopts technology that enables it to offer services or products differently than most other competing companies in the same industry.
For example, Uber has changed the way people think about traffic.
It filled an important need: people needed to travel from one place to another, but either they didn't drive themselves, or public transportation was time-consuming and unreliable, or they found taxis too expensive.
Uber's success was that the way they offered the service was different from other competitors at the time.
Uber connected customers who needed transportation with drivers, and the overall service was much cheaper. Today, many other companies, such as Lyft, follow Uber's business model and offer similar services.
Domain Transformation
A domain name change refers to a business using new technology to expand its offering. Many companies often choose to grow by entering new areas and offering a broader network of services or products that don't necessarily belong to the same market.
For example, Facebook started out purely as a social platform. However, due to the popularity of video-on-demand streaming services, Facebook Watch was launched in 2017.
Cultural/organizational change
This type of digital transformation refers to a change in corporate culture. The full digital transformation of a company cannot take place without the support of its employees.
A company involved in such a process needs to change its practices, goals and overall mindset to support digital innovation and adopt a more forward-looking approach and new technologies.
Changing company culture usually has to start at the top, with employees following their leaders.
In some cases, staff reorganization may also be necessary as new talent may need to be hired to help the company succeed in a new direction.
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