Digital Transformation Can Help Your Business Be More Profitable

The recent headlines and fanfare surrounding digital transformation is hard not to notice in your newsfeed. Whether it’s a grocery chain deploying Artificial Intelligence to optimize their inventory purchasing schedule, or a bank deploying a virtual assistant to complete your next transaction, these digital steps can seem giant, and in many cases, exclusive to big companies with similarly large budgets. The truth behind digital transformation however is that it doesn’t have to take the form of complex software optimizing an additional 0.01% of the customer experience at scale.

In many cases, the smaller the business, the greater the opportunity to see significant improvements with far less of technological complexity. These technologies and processes when deployed appropriately offer a massive opportunity for small and medium business owners to scale their business dramatically. This is less a factor of a flaw in traditional business models, but more so a realization that at their time of creation, these models simply couldn’t leverage the technology options available to them. Now that these technologies are not only accessible, but also highly cost-effective, it’s about time business owners have the opportunity to take full advantage of them.  

“Business has only two functions — marketing and innovation.” — Milan Kundera, Writer & Playwright

One of the most common historical approaches to “creating digital value” has been IT software integrations with a rather heavy-handed approach. Businesses were upsold to buy an entire suite of software, even though the truly useful components were often dwarfed by the new host of “options” to choose from. This creates two dilemmas; one of sunk cost fallacies, and one of overfitting solutions. By already having significant time and money invested, or “sunk” in these software suites, business owners can be tempted to hang on to them for longer, in the hopes of recouping the costs of ownership or getting their money’s worth.

In an attempt to justify their purchase, it is common to create a less valid use case or problem with which to apply the existing solution, a case seen as “overfitting”. This not only causes delays in timelines, as creating a problem to fit the existing solution is substantially more difficult than vice versa, but it also can misrepresent the true value (or lack thereof) of legacy software packages, and cause owners to hang on to these packages longer than necessary.  The unfortunate reality is that businesses in southwestern Ontario regions such as Windsor-Essex, Chatham-Kent, Sarnia-Lambton and London-Middlesex are behind with respect to digital transformation. The time to act is now because digital goliaths are eating our lunches.

Simplify Your Technology and Software In Order To Transform

In this case, the first step to digital transformation can take on the form of “digital minimalism”, as a challenge to business owners to adopt a lighter suite of technology that better serves their business needs. A great approach for this is to “exclude by default, include by exception” when re-assessing a digital stack. If there is a prevailing and current problem or use case that a given solution wholly addresses, then by all means, it deserves to stay. But after this digital practice of “tidying up”, it is common to find a large case of either redundant software, or software that used to serve a purpose or address a problem that the business has simply outgrown.
 
If there are outstanding problems that still need to be addressed after this clean-up, a minimalist approach should stay at top mind, identifying the root cause of the problem first, and then find the “lightest” (read: most targeted) digital solution that can address it. This practice will directly translate to a lighter tech stack, leaving business owners with more effective software for often a much lower monthly cost, and the agility to react to new problems and opportunities with significantly more digital ease. This may not be a complete jump towards digital transformation but represents a suggested first step to have in place before considering larger organizational changes.

Customers Must Be At The Centre Of Your Digital Strategy

Not all digital transformations have software as their root solution for that matter, some are founded in digital theory by redesigning existing technology to take the most important actor into account: the customer.  While certain technologies may improve an owners’ view of their business, unless an equivalent or greater amount of time is committed to the customer, it’s difficult to truly create digital value for a business. In this commitment, a lifecycle assessment must be in place to identify the entire user experience as seen by the customer, from first contact point to interaction experience with the business platform to relationship management. By recognizing this pathway through a business as a human experience first and foremost, it allows business owners to better meet customer’s evolving needs by providing an ever-improving quality of service.

“Focusing on the customer makes a company more resilient.” — Jeff Bezos, Amazon

An initial approach to evaluating the current human experience of a business is to begin with simple roleplay of customers, ranging from those who have never had experience with a given product or service before to experienced professionals seeking out a specific offering. It’s immensely beneficial to write out this “customer journey”, noticing transitions or cases that may feel noticeably smooth or forced. Creating highly specific cases can be an effective way of ensuring all your channels are set up for the experience you want to deliver,  for example instead of trying to be “an average customer”, which by any realistic measure never truly exists, it’s worth experimenting as “existing customer with high level of product understanding looking to submit a product return and provide meaningful feedback to the development team”, or a similar case of that depth. Often after pursuing 3-5 of these different user journeys, owners can have significant coverage and awareness of their channels’ strengths as well as weaknesses that can be addressed. Designing customer experiences to be more personal and customized allows for faster relationship development, as well as improved sales interactions right from the beginning. These design modifications can be anything from considering User Experience (UX) design laws when revamping a website layout, or automated workflows to provide instant response times to customer through 24/7 chatbot support options.  

This customer-centric model is truly at the core of digital transformation, and what separates it from digitization or digitalization, where data is converted to a digital format, or processes are optimized by digital options. While both approaches are necessary for digital transformation of an organization, the next step comes from using these tools as a means to redefine organizational objectives and business strategy to better provide value to the customer. As large firms continue to push the boundaries of technological innovation, platforms and digital options will become increasingly accessible to smaller businesses. With these innovations come new opportunities for using digital strategy and adoption as a means of competitive differentiation in today’s rapidly evolving markets.

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