Digital Transformation: Transforming Your Business From Physical to Digital

Is this the age of digital transformation in business?

According to a 2017 Forrester report, nearly three-quarters of businesses claimed to have a digital strategy. Today, four years and one pandemic later, that number is closer to 100 percent.

Taking your physical products and services into the digital age is no longer an option for business owners — it’s essential.

What is a digital transformation?

Any time your company uses technology to make your business more productive, efficient, and effective you’re “going digital.”

Transforming a business from a physical operation to a digital one often takes place over time, as older equipment (and employees) are replaced with new technologies. Many businesses have already transitioned to software-based systems for accounting, inventory, payroll, office communications, and other day-to-day business operations. Most of these computer-based systems replaced paper records and manual calculations.

Today’s digital transformation is about tying existing digital systems together and adding new ones to expand your business’s reach and level of service.

IBM Institute for Business Value defines three paths to digital transformation in their analysis:

a chart illustrating the three business paths

The digital transformation process typically includes one or more of the following technologies:

  • SCM (Supply Chain Management) software. See all aspects of your supply chain at a glance and make informed decisions with analytics.
  • CRM software (customer relationship management). This puts all of your customer information on one database, allowing you to manage all aspects of customer relations.
  • HCM software (human capital management). Take your human resources department to the next level with technology that assists with workforce acquisition, management, and optimization.
  • Business Intelligence. This is the science of business data analysis.
  • Machine learning. Programmable algorithms that learn from experience!
  • Artificial intelligence. AI can guide everything from the machines in your warehouse to an online chat with an inquisitive customer.
  • Predictive analytics. Make educated guesses about tomorrow’s business climate with a wizard of data analysis.
  • Robotics. Automate everything with an indefatigable machine!
  • Industry 4.0. This term relates to the current “Fourth Industrial Revolution” where digital technology continues to automate traditional “physical” industries.
  • ERP software (enterprise resource planning). This ties all of your business technologies together, often with real-time analysis and support.
  • Internet of Things (IoT). Digital devices connect physical things now, from your refrigerator to your security system to your lightbulbs. Where does your physical business fit into the Internet of Things?

What you need to transform your business from physical to digital depends on what you do, but certain aspects of digitisation apply to all types of business. It doesn’t matter if you run a photography studio, a restaurant, or run your own business — now is the time to digitise!

What Is Digital Transformation And Why You Should Care

Where to start your Digital Transformation

Think about how digital technology could benefit your customers and work backward toward your digital transformation. Instead of focusing on product promotion, step back and take a hard look at your customer’s wants and needs. Analytical software will help you see what’s working with your customers and what areas need improvement.

black background with red lights

Preparing for digital transformation

Some digital transformations are done on a company-wide scale, while others are more piecemeal — the marketing and accounting departments are digital but warehousing and human resources lag behind. However, before you begin your company’s digital transformation, there are some things to consider first.

What does digital mean to your business?

Consider how it will benefit your customers. How are your competitors using digital? Realistically assess your company’s goals and then determine what digital solutions can help you achieve them.

Create a digital strategy

Will this be a company-wide transformation or department-by-department? Consider staff training, IT needs, and new work procedures. What’s your time frame for this rollout?

Make digital a top-down priority

The executives and upper management must commit to a digital transformation, even if it means a long learning curve or temporary disruption in services … or revenue. Similarly, employees must also commit to the “digital mindset,” embracing new technologies and remote work that will ultimately make them more productive and efficient (for example, 24% of people who work at least one day from home report increased happiness and higher productivity levels).

Don’t go it alone

There are many business partners out there that can help facilitate your company’s digital transformation. Nobody has the initial expertise inside their business to undertake a large digital transformation single-handedly. A good digital transformation partner will guide you through the software, procedural changes, and “digital road-bumps” the process demands.

Ready your workforce

Make sure your employees have all the knowledge and equipment they need for a successful digital transformation.

white robot

What kind of technology will I need?

According to Eric Kimberlng at Third Stage Consulting, there are five digital solutions that you may want to consider for your digital business transformation.

Ecommerce software

This encompasses your website, online store, credit card processing system, and more. Make it easy for your customers and clients to learn about you and your business online. If you sell physical products, online eCommerce software can give you a virtual storefront and allow you to track inventory. Make it as easy — or easier — to shop online as it is in your physical store.

Marketing automation

Automated marketing services are a great way to keep in touch with customers and build consumer trust with digital resources. Instead of using email marketing to simply send email campaigns, incorporate your social media to post tips and other marketing content on a regular basis. Keep customers engaged and they’ll keep coming back.

Customer Relationship Management (CRM)

Get all your customer information stored in one place and track customer interactions. This broad overview makes for a better customer experience as employees will have an easier time meeting customer expectations. Most importantly, customer data can be analysed and acted upon. Find out what customers are looking for and where your customer relations might be lacking.

Enterprise Resource Planning (ERP) software

ERP software ties the first three software systems together under one digital “roof” in addition to financial and administrative software systems. Depending on your situation, ERP software can be a “one-stop shop” or your digital transformation needs. This can be a great digital solution for companies that have multiple physical locations since it ties all of your data together. See which stores are performing well and which ones need help at a glance.

Business Intelligence (BI) software

Good analytical software can spot business troubles before they crop up as well as predict future trends. Using a variety of different metrics, you can track and measure sales trends, consumer habits, and a variety of other business practices. Hard data makes for informed decisions and BI software can tell you more about your business than you ever thought possible.

an in progress marketing presentation
Business Intelligence software analyses data to help inform your business decisions.

Three steps to a successful digital transformation

Step 1: Get modern

The first move toward digital transformation should be modernising your legacy system. Transfer all those paper records to a digital database! Build a website (if you don’t have one)! There are still small business owners who avoid creating websites and it will be a good strategy to distinguish you from your competitors. You’re going to need to design a website, even if it’s a basic one that tells a bit about your products and services and offers a way for clients to contact you or make an appointment for your physical location.

Step 2: Re-work workflow

The next step is establishing a new workflow process. Even if you have a business based on a physical product or service you can still engage customers on digital platforms, offering existing customers additional services while attracting new customers to your brand.

Step 3: Digital first

The final step in a digital transformation is the gradual change from a physical business to a digital one as new digital revenue streams continue to emerge and grow. Eventually, all successful businesses will become eCommerce specialists at some level.

man in a warehouse

Easing the digital transition

Although we all understand the importance of digital transformation, this process is still not as easy as it may sound according to this Capgemini report:

report details

Consider the following digital transformation tips to ease the transition.

  • Adopt a “digital-first” philosophy in the workplace — make digital transformation a priority from the top down in your company.
  • Consider developing new products and services that are primarily digital. For example, online exclusives and offers strictly for a social media audience.
  • Develop digital service around your physical products. Go beyond warranties and service plans. Pair your product with a software component to add value. Offer a new level of online support.
  • Do a weekly podcast about different ways to use your product. Get creative!

Business benefits of digital transformation

Why embrace digital transformation?

Because it’s good for business. Digital transformation is a business transformation that makes things easier for employees and customers alike.

There are a number of obvious benefits to going digital.

    • Your customers expect a digital experience. Whether they are searching for answers on your website’s FAQ page, calling a customer service representative, or scrolling through social media posts, customers expect modern businesses to have a digital fingerprint. In many cases, a customer experience begins in a digital space. Depending on your business, the entire customer experience may be digital.
    • A digital business is scalable. As your company grows your business systems can grow with you. If you have to scale back (pandemic, anyone?) your digital business gives you the flexibility to do so.
    • Digitalising will streamline many business processes, which ultimately saves money on the bottom line.
    • Automated technology doesn’t make mistakes. It won’t call a customer by the wrong name. It won’t make a wrong cut in a piece of wood. It will work errorlessly for you 24 hours a day, seven days a week.
    • Digital technology allows you to reach consumers in a deeper, more personal way. Consider how most new cars come with digital technology that offers driver maintenance information and other ways to “stay connected” with the manufacturer over the life of the car.
    • Expand your customer base.
    • Track your customers more closely.
    • Optimise customer experience.
    • Optimise employee experience.
    • Introduce new revenue streams.

A strong digital strategy must be in place to transform your business to the modern age.

New technology is leading to new business models. Your mobile phone is no longer just a way to talk and send emails — it’s the primary way your audience will find you.

Opportunities of the Digital Age

Other traditionally “physical” businesses have found new economic opportunities in the digital age.

For example:

    • Papa John’s pizza developed an online interface that allows customers to order right from Facebook.
    • Planet Fitness live-streams exercise classes and offers home fitness plans.
    • Under Armour held a 30-day home fitness challenge to keep customers active.

Sometimes a digital transformation involves partnering with another service provider, the way countless restaurants have teamed with GrubHub and UberEats facility home food deliveries.

digital marketplace

Small Teams Get It Done

One of the beautiful aspects of the digital age is the ability to assemble and manage remote teams. Suddenly your workforce talent pool is global. Putting together a tightly focused team of specialists is within the grasp of nearly any small business owner.

Working in small teams is an essential part of the modern digital workplace. Small groups have better communication and can often reach goals faster than organisations with several levels of management. Small teams can experiment more — and fail — without hurting a company’s overall performance.

Making the digital transformation happen

Transforming your business to digital starts from the top down. Leadership, senior management, and IT staff must have a shared vision of how the digital transformation will roll out.

Make sure all employees know transforming to digital is a must. As stated above, there will be a learning curve, but assure employees that new technology is there not to replace them, but make their jobs easier.

A digital transformation is often more about reengineering business processes than learning how to use a piece of software. Changing old habits is always hard.

Go with the workflow

The biggest hurdle when it comes to digital transformation is training staff in new workflow procedures. It may take a while to round the learning curve but be diligent! Your business will be better for it.

An effective digital transformation needs everybody on board. Getting key people proper training is essential to the success of your digital makeover.

Listen to your employees. Promote a free exchange of ideas and information both among your employees and customers. It helps build brand trust on both sides of the fence.

Monitor and measure your transformation programs. Roll your digital transformation out over time and check what’s working and what isn’t. Adjust as needed.

The goal of digital transformation

Transforming your business from physical to digital is not just about going paperless (we still need paper and it still matters in the Digital Age).

It’s about organising company information, adding more value to customer interactions, and using data to target customer wants and needs.

The goal when creating a digital business is to combine your digital brand with the digital culture.

The first step is bringing a digital culture to your workplace, letting technology and automation do the heavy lifting.

Next is to capitalise on the reach of technology, by expanding your workforce through digital collaboration and reaching a broader audience through social media. For example, if you plan to reach a global and younger audience through social media, advertising on TikTok will be the best choice for you. It has become one of the most used social media platforms by small business owners in recent years.

Ultimately you want people to recognise and trust your digital brand as much — if not more — than the “brick-and-mortar” brand you started with.

The New Digital Business

From analog to digital

Once upon a time, like, 40 years ago, most business was conducted manually. By hand.

Analog. With paper and pencil.

Customer information was stored on handwritten sheets filed alphabetically in long filing cabinet drawers. Banks had human tellers and kept reams of paper records. Accountants tallied figures with calculators and wrote the information in oversized ledgers. Information was distributed once, maybe twice a day via newspapers.

Today, “there’s an app for that.”

Every business has been affected by the Information Age. Smartphones are the first stop for most modern consumers.

Why digital transformations fail

We began this article by stating that three-quarters of businesses have a digital strategy in place.

But the transition is slow.

According to the 2018 Digital Transformation Trends survey by Jabil only 8% of businesses feel their digital transformation is complete.

When digital transformations fail it is rarely the fault of the new technology. The vast majority of the time the failure can be traced to human error.

That’s why it’s important for businesses to invest in people as well as new technology.

Your software is only as good as the person who implements it. Getting the right people in the right positions can greatly ease your digital transformation.

It can be overwhelming for longtime employees tasked with adopting new business practices and processes. Give them time to readjust and reassure them their jobs are not at stake.

Additional training and reassignment are often a part of digital transformations. After all, this isn’t just about purchasing a new piece of software. It’s about rethinking the entire way business is done in the digital age.

If you are ready to start your digital transformation journey, why not get in touch today and see how Canny Creative can support you and your business gain a strong digital presence from the get-go! We’ve helped various businesses to achieve success and we can do the same for you.

Hey I'm Tony, Founder and Director of Canny Creative. I eat, sleep and bleed Canny to be honest. I'm an absolute workaholic (and yes, I know that's not a good thing!).

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