We hear numerous buzz words related to the concept of “digital transformation,” and sometimes we must stop and scratch our heads. What does this term mean for a business that wants to achieve a new level of digital capacity? Do our leaders need to devote more teams to the research and development side of the company, thereby enabling them to create more gadgets that will meet consumer demands for everything IoT (Internet-of-Things)? Should we push our company to invest more in digital marketing? Do we insist that our company to conduct more kinds of business transactions on Facebook? The reality is that some companies don’t want to overextend their budget for digital marketing or for the remainder of their digital transformation, but that’s often where their target audiences are waiting to be met. The digital world is where people increasingly purchase gadgets and make smarter decisions related to all aspects of their daily lives.
Choose a Step-by-Step Approach
These questions and many others could keep business owners and CEOs awake at night, but they don’t have to overwhelm readers. Here, we examine how an organization could conceptualize its own digital transformation in stages while avoiding excess stress for employees. The key is choosing a process that focuses entirely on better customer experiences and innovative customer experiences.
What Does a Digital Transformation Mean?
There are different ways to understand the concept of a digital transformation. Let’s begin with the premise that the size of a company affects the level of technological investment that it must make in digital marketing. We ran across Jason Bloomberg’s Forbes.com piece. He explains the importance of this concept by referencing Dr. Marshall W. Van Alstyne’s recent speech at the Appian World Conference. As co-author of The Platform Revolution, “Van Alstyne contrasted traditional, value chain-based businesses who build economies of scale as they grow, with platform-based businesses who leverage network effects to dominate their industries by building ecosystems of buyers and sellers.” Companies that seek a digital transformation will want to identify themselves more as value chain-based businesses or platform-based businesses. However, some companies will develop both aspects within their diverse operations.
Another way to look at this issue of how much of a digital transformation is needed, or, even better, how many products or services will be brought to customers in whole or in part via a digital platform, comes from Laurent-Pierre Baculard’s Harvard Business Review piece in January 2017:
CEOs may depend on their people to guide them as to the levels of digital transformation that are needed. Per Baculard, teams of employees working in the field “are well aware of the digital threats and opportunities within their area of the organization – usually more so than the corporate center.” They do things such as launch apps and deploy robotics; they make data-driven decisions. “The problem is that these efforts tend to be ad-hoc and uncoordinated.” What companies might need is “ruthless direction from the center” so that a CEO chooses the right projects for his or her strategic focus. These projects are often components of moving a company through a digital transformation.
We like to think that we can help our clients better understand the relationship between their digital marketing strategy and their overall digital transformation. Recent experience has taught us that companies can throw more capital at digital marketing in general, such as investing thousands or millions more in Facebook ads, but they don’t grasp how their digital marketing efforts affect their overall corporate strategy. Some of these companies really should return to the drawing board and plan the remaining steps of their digital transformation before investing more in online marketing.