“Digital transformation is the process of using digital technologies to create new, or modify existing, business models, culture and customer experiences to meet changing business and market requirements. This reinvention of business in the digital age is digital transformation.” (Mark Benioff, Chairman of Salesforce)
Digital transformation, then, is the use of existing technologies to improve the user experience (external or internal) through the digitization of products, services, processes and/or business models.
To clarify how products, services and processes are digitized, and how these create ecosystems that can generate new business models, I like to use the approach of Boston University Professor Venkat Venkatraman in his book “The Digital Matrix”.
Product Digitization
The difference between a traditional product and a digital product is that the digital product incorporates intelligent elements such as sensors, microprocessors and data storage.
Additionally, a digital product must have connectivity components such as Bluetooth, WiFi, NFC (Near Field Communication), among others, that allow it to transmit data that will feed a digital process or ecosystem. We can see examples of digitalized products around us such as “smart” phones that take a traditional product to communicate (the cell phone) and incorporate sensors, cameras, accelerometers, fingerprint readers and connectivity capabilities such as cellular network, WiFi, bluetooth, etc.
Other examples of our everyday life are: cars with sensors and GPS, televisions with WiFi access, lamp posts with sensors and connected cameras, electric light bulbs that can be turned on remotely, doorbells with cameras and remote connection, and many other mass consumer and industrial products that currently incorporate these technologies. The proliferation of digitized products opens up a whole branch of technological applications of the Fourth Industrial Revolution called the Internet of Things or IoT(internet of things), which we will deal with in greater detail in a future opportunity.
Process Digitalization
A digital process is one that uses entirely digital information between its different steps or components. The advantage of digital processes is that they can be automated through technologies such as BOTS or RPA (Robotic Process Automation). The BOTS I am referring to in this section are not like the ones we see in movies such as “Star Wars” or the beloved and helpful Robotina from the Supersonic, no.
These BOTS are pieces of software code responsible for executing repetitive instructions within the process that save time and resources and collect data that can be used with techniques such as data intelligence or analytics to make decisions and improve processes. Many industries now use automated digital processes in the delivery of their services.
Digitization of Services
A digital service is the sum of several digital processes and products that aim to deliver a specific value to the end user. The digital customer experience (Digital Customer Journey) is the consistency of that journey through the different digital touch points or processes, from learning about the product or service to buying it and obtaining technical or after-sales support.
It is important to emphasize that DATA is what connects all the flows in a digital service, we must ensure that there is no isolated data within the processes and that the information repositories are integrated to perform an adequate intelligence and analytics of them.
Let’s take as an example one of the companies with one of the best customer service levels in the world: Amazon. When we need to buy a pair of shoes, we enter the Amazon portal and simply type in the characteristics of the shoes we want to find. Immediately we see on the screen a number of recommendations that meet some or several of the attributes we entered.
We can then view each of the models we are interested in, compare them, read user reviews and ratings, compare prices and even know the tentative date on which we will receive them. Once we choose and buy them, the logistics process is activated, which allows us to track our product until it is delivered. If we have any problems or concerns during the process or after we receive them, we can contact the company through various digital channels and receive assistance in real time.
This service we have just described is “e-commerce” and this in turn is composed of many processes involving people, bots, intelligent logistics devices in warehouses, scanners, artificial intelligence algorithms that give us their recommendations, augmented reality applications and many more.
And the question is: Did Amazon start its service with all these processes digitized or automated? The answer is NO! It was done in stages. They were implemented, measured, improved, implemented again, measured and improved… and this is how I recommend you do it in your organization: choose a process, a user, some functionalities and go one step at a time increasing by cycles.
THE IMPORTANT THING IS TO MAKE THE DECISION, get advice from experts like Focux Digital and GET STARTED!
