Everything you need to know about digital transformation in business
The definition of digital transformation is as complex as it is vast.
Sometimes referred to as digital transformation or digital transition, it represents a major challenge for companies in the 21st century. We can no longer ignore the considerable impact of new technologies on our daily lives, and by extension in the professional sphere.
What are the consequences? To withstand the pressure of competition, businesses have to come to terms with the new practices and cultures brought about by digital technology, and embark on their digital transformation.
But how can they meet the many challenges that this entails? By understanding the concepts and issues surrounding digital transformation.
What is digital transformation?
Digital transformation: definition
Digital transformation refers to all the changes brought about by the integration of digital technologies into our daily lives, and by extension into the workplace.
The emergence of new technologies has brought about profound economic, societal and anthropological changes. These upheavals are having an impact on
- our lifestyles:
- the emergence of new ways of communicating, accessing information, consuming and even entertaining ourselves,
- accelerated circulation of information,
- greater mobility for our personal and professional activities, etc.
- our psychology:
- altered relationship with time (time barriers tend to disappear more and more),
- the search for immediacy,
- transformed relationship with the world: the whole of humanity (or at least a large part of it) is now connected!
But Rome wasn't built in a day! The digital transformation of society, and therefore of business, is part of an ongoing process whose history is still being written.
The history of digital transformation
For some intellectuals, digital transformation is the most important social and human upheaval of recent centuries. The philosopher and historian Michel Serres, for example, claims that digitalization constitutes the third anthropological revolution, after the birth of writing and the invention of printing.
But when did the digital transformation of society begin?
While the twentieth century saw the development of computer technologies, many experts agree that the origin of the digital transformation dates back to the beginning of the twenty-first century.
Indeed, it was at this time that new business models emerged, enabling digitisation to go beyond the simple technological framework to instil new strategies and working methods.
Digital transformation in business
Digital transformation takes place at different levels within companies:
- The integration of digital technology and practices into the business. This means, for example, using digital tools and dematerialisation to improve organisation and processes.
- The emergence of new business models:
- thanks to the contribution of digital technology to innovation, working methods and customer relations;
- attributable to the shift from a material economy based essentially on physical points of sale, to a dematerialised economy based mainly on data.
The challenges of digital transformation
Overall, digital transformation ensures the long-term future of the company:
- Increased innovation: digitising your business means you can innovate and seize new business opportunities (innovative products, responses to new needs, more effective tools, etc.);
- Accelerated growth, or even survival of the business: in an increasingly competitive world, the consequences are harsh for those who have not yet embarked on the road to digitisation. Conversely, the success of many companies (such as Uber, to name but one) is based on adapting to the new modes of consumption brought about by digital technology.
SME and TTE organisations that have embarked on and are accelerating through a thoughtful and active digital transformation are 2.2 times more likely to grow than those that have not started their digital transformation.
francenum.gouv.fr
Changing ways of working
Digital transformation has inevitably led to the emergence of new practices and concepts in the world of work. These include
- Changing our relationship with space and time. The digitisation of the enterprise is revolutionising our daily working lives, particularly thanks to the mobility and flexibility it allows, and is leading to the widespread adoption of new practices such as teleworking.
- Decentralisation of activities and horizontal management. To improve the flow of information in an increasingly fluid environment, digital transformation must encourage collaborative working, break down the barriers between departments and empower everyone. The aim? To build a value chain that better serves customer satisfaction.
- The emergence of new forms of self-employment. This is due in particular to the development of digital technologies that make it easier to match supply and demand for goods and services. Uber is one of the best-known examples of this trend.
- Optimising performance. Digital transformation has perfected operational processes to boost productivity. Activities are carried out more efficiently, to increase profitability and accelerate business growth.
- In general, new ways of organising work are emerging. We are seeing greater flexibility and collaboration within companies, but also a reorganisation of space (teleworking, open space, coworking, etc.) and the way in which day-to-day activities are carried out.
Removing human obstacles
More than 60% of companies' digital transformation projects end in failure.
étude Forrester Consulting
Any profound change implies a reconsideration of our beliefs, and digital transformation is no exception to the rule. That's why the human factor is so central to the race towards digital transition.
We need to :
- anchoring it in the company's culture: this is above all a question of cultural transformation rather than a purely technological consideration ;
- combating resistance to change: many people (even in management circles) do not at first grasp the value of changing working methods that have always worked well.
Adopting a customer-centric vision
We don't make money when we sell books. We make money when we help our customers make buying decisions.
Jeff Bezos, fondateur d’Amazon
The introduction of digital technologies into consumer behaviour has shifted the focus away from the product and towards the customer.
Adopting an appropriate digital marketing strategy and responding to the new needs of consumers is becoming a priority in the face of the competitiveness of new market players.
Consider the rise of the mobile
Mobile phones have become the primary means of communication, as well as the preferred tool for bringing digital technology into our daily lives.
- On the consumer side: it must provide the best possible access to services and products available online, as well as to information, communication and sharing tools, etc. ;
- On the business side: it helps to meet the challenges of increasing mobility, responsiveness and agility inherent in the digital transformation of the enterprise.
Example of a successful digital transformation
Faced with these many issues and the challenges that arise from them, some companies have nevertheless successfully carried out their digital transformation.
💡 Did you know, for example, that Lego avoided bankruptcy thanks to its digital transformation?
After 20 years of prosperity, the famous company came close to bankruptcy in 2004. But by developing an in-depth digital transformation programme, the Lego group was able to take advantage of digital technology to achieve +20% sales growth in 2009 alone.
Lego has finely tuned its learning values so that it can continue to pass them on using digital tools:
- The launch of the "Digital Designers" 3D design platform has enabled Lego to engage its customers by involving them in the creation of new models.
- Through Lego Mindstorm, attractive mobile applications and video games, the company has developed an ecosystem connected to its brand that federates and builds loyalty among an intergenerational community of fans that is growing every day.
Known today as the "Apple of toys", Lego has harnessed digital technologies to transform its business model and benefit from new sources of revenue.
The state of play in the digital transformation of businesses in France
Transform today... so you can look forward to tomorrow
Ultimately, digital transformation is inextricably linked to a company's long-term future.
Restructuring working methods, evangelising teams, innovating... each company, depending on its degree of maturity, needs to manage its digitalization project intelligently.
But while the digitalisation of the company is a challenge of today, it also means being able to meet the challenges of tomorrow. It's an ongoing process: smart data, big data, augmented reality, robotics... you need to keep abreast of the ever-changing challenges of digital transformation.
That's why you need to put innovation at the heart of your preoccupations, so that you can better adapt to changes in the market.
Updated article, originally published in November 2019.
Article translated from French