These days it's a business imperative for companies to strive for "digital transformation." For the past several years, management at companies of all stripes and types has been hearing about the risks involved in being left behind if they fail to digitize fully.
To that end, numerous businesses, both small and large, have undertaken costly, often complex campaigns of digital transformation, hoping to come out the other side sleeker, more efficient, and, ultimately, more profitable. But their objectives may be misplaced.
The reality is that businesses should consider digital transformation as a means to a greater end rather than an end in itself.
The Physical World Is Still Alive and Kicking
While digitization offers something for everyone, preoccupation with it at the cost of other aspects of a business can be detrimental. It can mean losing sight of that which can and should never be digitized: the physical world.
"As the revolution progresses, some companies will go the way of Tower Records, their businesses thoroughly disrupted and destroyed by digital alternatives," Darrell K. Rigby writes in a piece for Harvard Business Review. "But most will find that they must fuse the digital and physical worlds, just as consumers are doing. Look at your own business: Is the physical part of it really going to disappear?" Whether a company sells widgets or life insurance, to continue to remain profitable it must put its customer base first -- and that may not mean ramping up digitization efforts to the exclusion of other things.
Digitization Won't Cure Foundational Problems
Just as children must learn to walk before they can run, to be successful, businesses must fix fundamental operating challenges before striving for full digitization. True, aspects of digital transformation can save substantial amounts of employee time, and therefore company money (consider, for example, the automation of manual processes such as form filling for a loan originator). But 'going for digital' in situations in which an employee is unmotivated to do other work once the rote is out of the way, or doesn't understand their role, or at a company that lacks sound management won't boost organizational productivity.
"Focus on optimizing your team, aligning your strategies, and creating a transparent culture to build a framework ... before jumping into your Digital Transformation journey," Paige Pulaski Jones writes in a blog post for the website of strategic planning software company AchieveIt. "Transformation is based on people. Invest in training and staffing to ensure you have the right team in place. Make your team successful by cultivating open and transparent communication and facilitating a way to make collaboration easy."
Making any foundational changes necessary for a successful digital transformation will move you and your company further along the path to general, continued business success, and digitization rightly becomes a benchmark instead of an end goal.
Full-Throttle 'Digitization' Can Be Ruinous if Done Wrong
The majority (84%) of digital transformation undertakings fail, according to a 2018 McKinsey & Company survey, which showed that the larger a company is, the more likely its digitization project is to do badly. The reasons are many, but chief among them stems from the fact that "digital is not just a thing that you can buy and plug into [an] organization," as Thomas H. Davenport and George Westerman write in a piece for Harvard Business Review. "It is multi-faceted and diffuse, and doesn’t just involve technology. Digital transformation is an ongoing process of changing the way you do business."
Spending millions on digitization but failing to properly train employees on new systems, for example, or investing heavily in digitization without buy-in from upper management can backfire for an organization. Without a holistic approach to business success - one that includes organization-appropriate, scaled digital transformation - a company stands to lose not only revenue on costly systems that don't end up getting utilized, but also valued talent that ends up leaving.
When your business is ready for true digital transformation that is designed to help you meet larger organizational goals and objectives, Ripcord will get you there. Get more information about Ripcord today.