Digital transformation has been around for more than a decade. However, COVID-19 pandemic has brought a new determination and pressure for organizations to meet digital transformation goals.
The incremental integration of digital technology into everyday business activities has contributed to increased efficiency in business verticals. Understanding the technological potential is a key element of digital transformation. It is imperative for businesses to remain competitive and relevant in these digital times.
What is Digital Transformation?
Digital transformation is the integration of digital technology into business areas, primarily changing the style of operations to deliver value to customers. It means transforming business activities, processes, products, and models to take advantage of opportunities provided by digital technologies. The goal is to manage risk, improve efficiency and discover new profitable opportunities.
The idea behind digital transformation might enhance productivity, improve customer experience and profitability, bringing transparency, and reducing friction in the processes. Going digital could mean different and is subjective to organizations. It could mean going paperless to implementing data analytics and Artificial Intelligence or a complete digital transformation.
The elements of digital transformation that require changes are:
- Customer experience
- Culture and leadership
- Enabling and upskilling the workforce
- Operational agility
- Digital technology integration
3 essential components of digital transformation are an overhaul of:
- Processes
- Operations, and
- Customer relationships
4 key areas of digital transformation
1. Business Process Transformation
Transforming the business processes, services, and models the company uses by introducing technology that can benefit the skills, successes, and opportunities.
2. Business Model Transformation
Refurbishing a business model includes the incorporation of technology to drive revenue and improve customer service experience rather than implementing technology for the sake of it.
3. Domain Transformation
Domain transformations take place when a business successfully slides into another area or market. For example, Amazon entered different markets with Amazon Prime or Amazon Web Services (cloud computing infrastructure service).
4. Cultural/Organizational Transformation
It is challenging to bring different systems users who will accept big changes on the same page. But it can prove beneficial if an organization delivers an overall better outcome to its customers.
There are four benefits of undertaking a digital transformation:
- Reduced or lower costs
- Improved accuracy
- Improved speed
- Improved process efficiency
These benefits combined improve organizational productivity.
5 ways COVID-19 is speeding up digital transformation:
- Digital Supply Chains
- Tele-Health and Smart Hospitals
- Remote Work
- Digital Commerce
- Virtual Events
Impact of Digital Transformation on industries after COVID-19
COVID-19 presents two challenges for all global sectors: halted sectors resulting in trade disruption and reduced demand from consumers.
Following are the five industries reacting to business and economic turbulence through digital transformation and innovation.
1. Healthcare
After the negative impact of an economic downturn because of lockdown, COVID-19 presents add-on challenges like fear from the virus, grief, prolonged physical distancing, and social isolation that will multiply the impact on our collective health.
The environment and platform through which the healthcare services are delivered will evolve, according to need, in a new format. The areas on which the healthcare sector is focusing are telehealth, e-medical records, urgent care, and uploading or using online platforms to provide services.
2. E-commerce and Online Shopping
B2B digital transformation statistics show that online shopping is the fastest growing industry, continuing to invest in digital resources. Even with changes in technologies and trends, most E-commerce sales are done through mobile devices (73%). AI, ML, personalized customer experience, and pre-defined analysis all harmonize in the evolution of B2B consumerism.
3. Restaurants and Food Delivery
All kinds of dining establishments are now switching to cloud kitchens that offer food delivery services to customers. This trend is gaining momentum as companies and people practice social distancing.
Many restaurants have launched contactless leave-at-your-doorstep delivery services in unique ways. There are new hygiene practices and social distancing rules followed in these kitchens. There are also changes in food delivery guidelines such as disinfection of containers and measuring the body temperature of employees daily before they work.
4. IT Industry
Because of enhanced remote working scenarios, digital transformation is already seeing the rise in demand as organizations accelerate their remote working capabilities. Senior management is entrusted to ensure a secure and robust network, disaster recovery systems, and more devices for employees working remotely.
5G network and equipment introduction process is sped up to give access to faster data and automation focusing on network equipment and communications. There is a notable increase in tele and videoconferencing software.
5. Hospitality
Throughout the pandemic, hotels, restaurants, theme parks, and cinemas, etc. were all closed. The disruptive effect on the global hospitality industry and the economy is tremendous. The adoption of technologies like Artificial Intelligence, Big Data, and AR/VR is shaping the hospitality industry today.
Smart automation has arrived in the industry through the Internet of Things (IoT). It has improved the convenience and comfort for clients and reduced overhead costs for organizations. Robots are now handling food preparations and delivery, cloud storage, and predictive analysis. COVID-19 has brought the need for companies to re-evaluate their digital strategies.
Conclusion
Businesses are adapting to new technologies and reducing human contact to improve resiliency. Companies encourage their employees to work from home. By reinvesting in future opportunities through digital transformation, the businesses will survive and flourish soon.
Because of the pandemic, we see a strengthened digital infrastructure, the rise of telehealth care, better use of technology and AI, and more online shopping sites, and cloud kitchens.
