What is your digital transformation status?
Has the Covid-crisis really brought us on the verge of a true digital transformation in operations? Not yet. There are still a lot of companies and organizations with internal processes that rely mainly on paper and manual labour. So, what is the true state of digital transformation in the knowledge worker environments such as the financial, insurance and public sectors? In this article we present a simple but effective digital maturity model to pinpoint your current digital transformation status of your different operational processes.
The actual state of digital transformation in operations
We hate to break it to you, but the truth is that many companies are still struggling with their digital transformation. They may have digitized a few customer facing processes on the outside, yet behind the scenes they often rely on paperwork and manual input.
4 stages in digital maturity
And you? How digital mature is your company or process?
To help you pinpoint your digital status, we have developed a simple, but effective digital maturity model, consisting of 4 stages.
Stage 1: Digitization of media
The first stage in the digital transformation is the digitalisation of the medium. It is the easiest step and generally involves the replacement of paper documents by digital documents, forms and online tools.
- From paper subscription forms to digital forms.
- From manual handwritten signatures to digital signatures.
- From document transfer by postal services to electronic mailing solutions.
- From printed brochures to online brochures.
Stage 2: Digitalisation of functions
The second stage is the digitalisation of functions. It means that tasks or assignments previously performed by a person are successfully executed by a digital solution.
- Data extraction and input
- Taking decisions
- Assigning tasks
In this realm, beside customer development of course, we can situate the following:
- Rules Engines
- Machine learning
- Artificial Intelligence
Stage 3: Digitalisation of business processes
The third stage is the digitalisation of the entire business processes (Digital Process Automation). By harnessing technology to automate and streamline your internal processes, you increase efficiency and customer satisfaction and reduce lead times and operational costs.
- Insurance companies that provide online quotes, which can be digitally signed and sent over the internet instantly.
- Opening a new current account online.
- Helpdesks that perform digital case management
Stage 4: Changing the Business Model
The fourth stage is the digitalisation that impacts the business models. It means the entire market approach of a company is can be adapted, creating new ways of product distribution.
- Opening new markets, due to the fact that local presence is no longer needed
- E-commerce as a replacement of physical stores
- Manufacturers selling their products directly to the end consumer using a web shop. This process of cutting out the middlemen is also called disintermediation
The four stages in digital maturity
Where are you in your digital transformation?
How to approach your digital transformation?
Digital transformation is an ongoing process
Many companies approach their digital transformation as a project with a definitive end date. However, you should regard it as an ongoing process. The main reason of digitalization is making your processes more efficient in order to make it easier (and faster) for your customers, while reducing costs. Digitalization can never be a goal in itself. It is part of a broader pursuit of continuous improvement. Regardless of your current digital transformation status.
5 Reasons why digital transformation fails in many companies
According to McKinsey and Forbes, between 70% and 84% of the Digital Transformation programs don’t achieve their intended goals and mainly due to the following reasons:
- Lack of strategy: Many organizations don’t have a formalised strategy when starting their digital transformation. If you are not clear on your goals, you will never find the right solution.
- Buying all the latest technology: Many companies are just looking for the next digital tool that will offer a partial solution, without looking at the real-life requirements and a long-term adaptive solution.
- Lack of Executive-level understanding: Short-term commitments and a persistent budget focus are the biggest threats for a strategic, long-term digital transformation.
- Resistance to change: When different departments swear by their silo mentality, it’s difficult to clear the way for a true digital transformation. The same goes for an IT-department which is reluctant to change.
- Lack of customer centricity: All your processes should be designed with one common goal: providing your customers the best solution and service. When customer centricity lacks in your organization, it is difficult to define an effective digital transformation roadmap.
For your digital transformation to be successful, you must focus on efficient change management. An important part of the process is convincing everyone in your company from the benefits and the need for this change. Additionally, it is important to take the right steps at the right time and to involve the right people.