What is Digital Transformation?

What is Digital Transformation?

Digital transformation describes that changes that businesses, organizations and entire industries go through as they integrate digital technologies into their core business processes. The introduction of digital technology into traditional business models has fundamentally changed how many organizations deliver value to customers through their products and services.

Global adoption of the internet, increasing numbers of mobile subscribers and a growing network of IoT devices around the world are the driving forces behind digital transformation. Another important factor is the increasing availability and affordability of computing resources and data storage capacity through IT infrastructure deployment models like cloud computing. As consumers spend more of their time online, businesses are changing and adapting their practices to meet them where they are. At the same time, digital transformation plays a role in enhancing operational efficiency for businesses, especially through applications like process automation and data analysis.

Six Stages of Digital Transformation

The need to create and optimize digital customer experience (DCX) is one of the driving factors behind organizational digital transformation. While the need is immediate, digital transformation does not happen overnight. It takes time for digital transformation to mature and develop within an organization, with individuals in staff and leadership roles acting as agents of change. The process of digital transformation can be broken down into a six-stage digital maturity blueprint:

Stage One: Business as Usual

Stage one represents organizations operating under its legacy model for delivering value. An organization conducting “business as usual” has not yet begun the digital transformation process. It maintains a traditional approach and perspective for servicing customers, tracking metrics, managing processes, and business models and utilizing technology.

Stage Two: Present and Active

Individuals within the organization begin to experiment with digital solutions to business problems, working creatively and increasing their digital literacy. Digital technology may be used to streamline certain processes or at specific touch-points.

Stage Three: Formalized

As early experiments find success, experimentation with digital technologies may become more structured and intentional. The integration of new technology leads to measurable success and staff may appeal to executives for additional support and technological resources.

Stage Four: Strategic

The organization has realized the benefits of digital transformation and begins to approach it from a strategic standpoint. Collaboration and communication between groups and departments increase as staff work to optimize digital resource utilization, share benefits and implement strategic plans to propel and manage digital transformation.

Stage Five: Converged

In this late stage, an organization may form a dedicated digital transformation team whose goal is to identify technologies that can help the organization deliver an improved customer experience, streamline processes or mitigate risk. The organization fundamentally changes its structure as the roles and expertise needed to power digital transformation are brought on-board, and new systems are implemented to support rapid change.

Stage Six: Innovative and Adaptive

In the final stage of digital transformation, organizations become innovative and adaptive, adopting organizational and managerial structures that enable rapid response, piloting and implementation of new and promising digital technologies. Executives and strategists recognize that change is constant and direct the organization towards the development of new capabilities that will solve future problems.

What Technological Initiatives are Driving Digital Transformation?

As organizations advance through the six stages of digital maturity, they develop customer-centered strategies for improving their services. Digital transformation strategy is guided by the objective of leveraging the speed, mass personalization, and intelligence collaboration to drive co-creation of value for stakeholders (employees, customers, partners, etc.) Here are some of the most highly prioritized initiatives for organizations undergoing a digital transformation:

  • Integrating social media, mobile marketing, web, e-commerce, and other marketing and distribution channels to deliver a customer-centered omnichannel experience
  • Modernizing IT infrastructure (especially with the adoption of cloud computing and other IT delivery models) to enhance organizational agility, network security and ease of management
  • Improving e-commerce capabilities and enhancing mobile commerce through the adoption of new platforms and tools
  • Establishing formalized programs or teams focused on digital innovation
  • Modernizing organizational policies, processes, and procedures to enable more rapid change
  • Modernizing the employee experience (EX) with digital interactions, including digital HR platforms that may also be used during the hiring process to enhance the candidate experience
  • Reorganizing teams and departments to optimally leverage technological investments

Digital Transformation and Marketing Technology

Survey data collected by Altimeter found that for many organizations, the most important priority in digital transformation is integrating marketing channels to deliver an optimized digital customer experience (DCX).

Organizations of all sizes are beginning to understand the power of digital marketing when it comes to generating inbound leads and opportunities that lead to sales. Here are five reasons why more organizations are choosing to adopt digital marketing technologies as part of their core business model:

Digital Marketing is Less Expensive

Traditional marketing methods include things like road-side billboards, television and radio advertisements, print ads and other forms of physical media. Traditional marketing campaigns are resource-intensive to create and distribute. It can also be difficult to target them at an appropriate audience and measure the results. Digital marketing empowers organizations with research and analytics to help reach the right audience for the right price, along with many avenues for low-cost marketing plays, such as social media.

Digital Marketing Helps Small Businesses Compete

Digital marketing has a lower barrier to entry than traditional forms of marketing and advertising, such that small businesses can access many of the same resources and ad platforms as larger ones. While larger organizations can still spend more money on advertisements, small businesses can still leverage digital marketing initiatives to build brand awareness and get the word out about products and services.

Digital Marketing is Personalized

With user behavior analytics and cookie tracking, even small organizations can steer away from the one-to-many approach to marketing and adopt a one-to-one, personalized approach to customer interactions. Customer behavior tracking can inform how the organization markets to individuals (with re-targeting, product recommendations, etc.) while delivering more personalized and seamless user experience.

Digital Marketing Leverages Data Analytics

One of the major challenges of digital transformation is that it can be difficult to measure return on investment for many types of initiatives that streamline processes and increase efficiency without necessarily driving more revenue. In contrast, organizations that do digital marketing can access robust data tracking and analysis tools that help to optimize the marketing funnel, understand consumer purchasing behaviors and measure the ROI of campaigns and marketing plays.

Digital Marketing Enables Marketing Automation

With digital marketing, organizations can automate many types of routine marketing tasks that would otherwise be the responsibility of marketing staff or sales agents. Marketing automation is all about sales enablement – giving your sales teams the resources they need to manage (and close) more accounts.

Transform Your Digital Marketing with Directive

At Directive, we use a full spectrum of digital marketing techniques to help our partners transform how they connect with and deliver value to customers. Our capabilities include content marketing, PPC, search engine optimization, conversion rate optimization, social media advertising and a robust analytics platform that helps us identify the most profitable channels and manage ROI.

Contact us for a free proposal and we’ll show you how to propel your digital transformation and drive customer experience with an integrated approach to digital marketing.

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