Digital Transformation
Digital Transformation is the process of using digital tools and technologies to improve or renovate the existing process. It is the process of replacing slow manual process with easier, efficient and automated processes. This means that digital technology has to be integrated at each and every business unit which in turn dramatically impacts the enterprise as a whole in terms of increased efficiency. The actual transformation has to take place to maximize the overall effect but the process should be driven from the top management.
Digital transformation is the reinvention of a company’s strategy, organizational structure, processes and capabilities to match the evolving digital context. Digital transformation is built on the successful combination of two development vectors: business and technology. Organizations need to have a digital transformation platform and a framework in place. Statistics reveal that only 34% of the companies have initiated the digital transformation process.
The four major areas of digital transformation are business process, business model, domain and cultural/organizational. Updating IT systems and apps will not suffice. The whole process is a cultural shift, a reimagining of all of a company’s processes and way of doing things. The changes brought by digital transformation will affect every employee’s daily workflow. Hence it is imperative to involve everyone early and solicit their ideas.
How digital services are changing IT Landscape
The integration of digital technology into all areas of a business has a great impact on the operations and value addition services to a customer. The role of the IT functions also changes majorly. The IT department has a unique perspective of the fast evolving technology landscape. To put digital to work for the business, IT’s wealth of expertise has to be leveraged in terms of business continuity, cyber security to applications and infrastructure. IT departments act as a hub to drive the digital transformation experience and the business leaders take a supporting role.
IT should move away from the traditional perspectives and deliver value back to the business. IT plays a major role in facilitating digital changes within the organization for a seamless user experience. IT should reassess all existing operational tasks and minimize if these tasks are not core to the organization’s identity. When non-core tasks are offloaded, IT must act as a bridge between the third party providers and the rest of the Organization.
IT must build more micro-applications into business processes to support customer experience and facilitate daily business by supporting the integration of value-driven applications from third parties. IT must acts as innovators by applying new digital solutions to old problems. IT plays an integral part in adoption, integration and execution of innovative digital technologies.
IT can become business enablers through early adoption of technology in the form of automation that can drastically bring down the costs and channelize the revenue for reinvestment in technology. IT can help internal departments prepare for digital transformation, promote fluency in digital technologies across departments and encourage the company employees to develop digital competencies.
All these are possible only when IT teams are not bogged down with day-to-day challenges around managing technology infrastructure and focus in providing basic services and support for the business. Outdated infrastructure, resource constraints, lack of leadership support can act as deterrents to IT teams’ innovation.
IT teams should be well aligned with business needs and challenges. It is much easier to approach digital transformation in a holistic perspective. IT teams should establish ongoing dialogues with the leadership team and every other team in an organization.
Impact of digital transformation on industries (Banking, Insurance, Retail etc.,)
We live in an age that has gone digital in a big way and has created a great impact across all sectors such as Banking, Insurance, Retail etc.,
Banking
Banks have to be digitized if they need to survive in a fast-paced environment. The time-consuming traditional methods have to be replaced with digital banking solutions. Systems are under control and data is secured.
The main challenges are banks have to fine-tune and respond to customer expectations by adapting their current services to the changing demands. The old legacy systems have to be masked to support the modern intuitive customer experience. Customers have to be empowered to resolve queries on their own. The response times to customer queries have to be reduced. The social media revolution has put a lot of pressure on banks to comply with new models of customer interaction. Customers demand 24*7 accesses to all services provided by banks across all channels.
The number of customers visiting the banks has reduced considerably. They prefer to transact through remote. They find new avenues to connect and Banks necessarily have to address specific customer segments. They help the customer to manage their investments themselves.
Banks have to provide their customers real-time access to data through mobiles and other devices. The gathered customer data have to be utilized by the Banks to obtain insights and provide new experiences to customers.
By deploying tools like e-forms and work flow systems, Banks can generate significance performance gains. A unified messaging solution integrated with various customer-front end apps can generate a harmonized real-time experience and end-to-end process visibility for their customers.
Insurance
Insurance companies are posed with many challenges post digitization. The ongoing commoditization, regulatory changes, decreasing loyalty, insurance claims processing, linking of policy terms with data from emerging technologies such as IoT drive the insurance industry to optimize the end-to-end customer experience.
The policy holders communicate via email, text and other multi-channels. They express their dissatisfaction in social media that is easily voiced. 84% of customers trust other customer experiences. The nature of insurance business is affected by incidents that can cause a spike in claims with even more customer expectations. For example, the recent Corona Virus has increased the death claims.
Many insurance carriers have automated processes for some communication channels like emails and documents but communications like text and social media are largely manual or remain siloed.
The handling of a claim requires matching the request with customer information that in most cases resides in legacy systems. Finding this data, such as customer status and associated entitlement to reimbursement, is often a bottle neck for the end-to-end automation of the claims process. Fraud is another challenge for insurance carriers.
Retail
Retailers have to respond to new shopper expectations, bridge digital and physical shopping experience and transform the retail experience. 90% of the people use their smart phones during shopping. Speed, time and a transparent view of products are keys. A channel-agnostic shopping journey has to be provided to the customers.
The use of digital tools and channels across each possible stage of the shopping journey has a consequence on the pre-shopping tasks, the actual shopping transaction and post-shopping. Consumers want more engaging and personalized in-store experiences.
Technology has changed the shopping experiences in the form of smart fitting rooms, low-energy Blue tooth devices, enabling multiple goals in areas such as payments, floor space management.
Retailers have to do more to attract customers and build loyalty. They have to offer an exciting seamless experience online and in-store that relies on a sound infrastructure across the business as a whole.
Conclusion:
Digital Transformation need not be complex. All you need to do is discover tools that make it simple. Digital Transformation starts with empowering employees with new tools and methodologies to create data-driven strategies and innovation. It is an ongoing process because many technologies are based in cloud that comes with automatic updates frequently. To maintain a high level of usability and productivity, enterprises must have a structure in place to support ongoing training. Any digital transformation process in an organization has to be attuned to the needs of its employees.
Stay tuned to Part 2 of the blog series
