Quite regularly here and there the public mind keeps being exposed to informational injections about “mind-blowing inventions”, “revolutionary technologies”, and “disruptive innovations” potentially capable of digitizing any company and even transforming the entire economy.
However, when key details of all those “marvelous” projects face a critical examination, a very poor understanding of the very term “digital transformation” happens to be inherent in many people who are talking about Digital. A huge number of both opponents and proponents of digitization seem to remain surrounded by myths and biases.
A sacred duty of any reputable digital transformation agency is to dispel those myths and misconceptions however credible they might sound. If you can distinguish myths from facts you will unlikely become a victim of the spiraling hype about the seemingly total digitization of everything.
We have selected the most popular five myths about digital transformation that can prevent your project from success. Let’s apply common logic and true knowledge to separate church and state.
Myth 1: Every Company Must Be Digitized
Reality suggests that not every organization, process, or business model needs to be digitally transformed. At least right now. Digitization is about neither updated software nor improved supply chains. This is a well-prepared digital strike on the existing infrastructures that, probably, work quite well so far. Before moving towards digital transformation, any company should forecast what business effects the upcoming changes can result in. Programs for business-model prototyping can help in it.
The first question to be addressed is: can your company create digital models that imitate the existing business processes? And there is nothing terrible if not. It simply means that you will face certain hurdles when trying to translate your workflows into a digital format.
However, digital transformation may appear unfeasible even for those organizations that are capable of modeling their business processes in every detail. It is worth remembering that benefits from any initiative are determined by the growing market share, income, and profit. Besides, if the existing business model with all its workflows and processes is flawless, the effort and expenses to get your business digitized can simply make no sense.
Of course, nothing lasts forever and the efficiency of any existing business model can go down over time. If you feel that your business is approaching the threshold after which the already digitized rivals can take a bite of your market share, it is time to go digital. Nonetheless, digital transformation should never be a goal in itself. Thorough calculations are always worth making to stay confident about your digitized workflows going to be simpler and cheaper.
Myth 2: Digital Transformation Always Runs Under Disruptive Technologies
Reality suggests that the best effect from digitization is brought by well-tested “traditional” technologies rather than by the fanciest (virtual reality) or most promising (machine learning) ones. Good old networks and databases along with time-honored CRM and ERP can boost a non-digitized business almost certainly.
Take the two business giants of nowadays Uber and Airbnb as an illustrative use case: they both rely on operational innovations, not on technological ones. None of the “breakthrough” digital technologies has helped them edge out competitors in the booming sharing economy. Instead, they used “trivial” smartphones, mobile apps, and responsive websites optimized for instant transactions and precise geolocation.
In other words, the best business effects of digital transformation should be expected from the well-known widespread digital technologies when they are applied to innovative business strategies.
Even though the thesis is obvious, many business owners refuse to accept the simplicity of the approach. They believe the newest possible technology should be implemented to provide some business advantages. This is how myths about digital transformation appear.
Myth 3: Just Profitable Companies Tend To Implement Digitized Projects
Reality suggests that if a business goes well (both employees and shareholders feel good with their wealth and property), the possibility of significant transformations approaches zero in such a company.
Companies having tough times, on the contrary, would dare go digital more likely just because they have to change something (if not everything) in their business models. Successful organizations, especially public ones, are quite reluctant to make any structural changes: the perfect is the enemy of the good. Try to remember any successful company that has drastically changed its business model with no market pressure.
Fundamental transformations (digitization is the one, like it or leave it) are always labor-consuming and oftentimes painful. The outcomes are not always predictable. Whatever various business bestsellers and pundits can claim, the truth is that people resist any digital transformation if they feel comfortable with the existing business model. Of course, If a company starts facing problems the resistance can rapidly fade away. But before difficulties happen, pushing people to accept digital transformation is almost impossible: don’t try to repair what works well, as they say.
Which organizations have the lowest possible resistance to digital transformation? Companies that are losing clients and money, on the one hand, and startups that are not very sensitive to expenses funded through abundant investments, on the other hand, constitute the spectrum of organizations easily prone to digitization. Sufficient resources along with a well-grounded tolerance to risks usually belong to a company that is one click from digital transformation.
Myth 4: We Must Disrupt Our Segment Earlier Than Anybody Else
Reality suggests that segment leaders rarely incentivize disruptive transformations since their business models are sustainable due to years of tedious labor. Besides, any digital innovation as such does not guarantee that all market players can accept and follow a new disruptive business model. This is rather a brave startup that can afford to experiment with any sort of digital transformation once it has not too much to lose. Any disruptive project always takes the risk to remain the odd man out.
Successful examples of disruptive digital transformations that revolutionize the whole segment are quite rare and ambivalent. Digital streaming video from Netflix is still existing in parallel with conventional TV channels and cinema. The disruptive car-sharing model from Uber has not buried the traditional taxi service completely. Amazon and Alibaba are spearheading the booming eCommerce while brick-&-mortar retailers are unlikely going to leave the stage.
No one doubts that any segment leader can get ahead due to a self-disruptive strategy. Numerous digital technologies are here to help. But it is worth remembering that the moment of glory does not imply far-reaching positive outcomes for your business. Thoroughly assess your position on the market before jumping into digitization with disruptive innovations.
Myth 5: Requalification Of Staff Is Necessary To Go Digital
Reality suggests that the digital literacy of the majority of modern employees appears sufficient for implementing digital innovations with little to no training. This is a misconception to link compulsory requalification of staff with digital transformation.
Various studies and expert forecasts add fuel to fire. They predict that 80% of operational skills have to be reprioritized to implement digital transformations by 2022. But such forecasts should be approached with a critical eye. The staff adaptation to digital workflows is worth arranging through a bottom-up model.
In other words, companies shouldn’t focus on the most up-to-date technological achievements and wait around until employees acquire the skills needed to deal with the innovations. It is much better to implement the technologies already familiar to staff. The market offers a lot of tools and systems that facilitate digital transformation beginning from programming languages and up to cloud services.
Organizations can organically engage employees in innovative workflows through investing time and money in digital technologies that do not require the requalification of staff. Such a seamless integration brings much bigger value to any business than authoritarian management practices that force people to master excessively complex systems.
This is obvious that digital transformation is not another marketing hype. This is the trend that is here to stay. It should be apparent as well that taking on digitization requires meticulous planning and fearless experimenting.
Digital transformation is not an insurmountable barrier as it might seem at first sight - such understanding will eventually come. Skepticism is redundant when digitization seems to be too expensive and time-consuming. Stop following ridiculous myths about digital transformation - they are just chimeric creations of tabloids mostly.
Accept digitization as a useful toolkit capable of improving your workflows. Successful digital transformation does not depend on the size of a company since a different aspect is crucial in it. Strengthening effective interactions between a business and its customers is what provides both a premise and an outcome of properly arranged digitization.
Have no idea where to start? That’s alright: the professional digital transformation agency is here to help. Contact us today to develop your individual digitization strategy: our experts are immune to myths and misconceptions and able to make your business adopt digital transformation with no stress.