The World Economic Forum (WEF) publishes a “Digital Transformation Initiative” (DTI) report each year. This report looks at how digital technologies can revolutionize the way businesses operate.
In WEF 2017, digital transformation is described as a “once-in-a-generation chance” whose net benefits could exceed $100 trillion by 2025. Thinking about these tips are a great first step to preparing your organization for digital transformation’s opportunities. However, if you want your organization to lead the pack, you have to make digital transformation one of your top priorities.
As the American writer William Arthur Ward said “Opportunities are like sunrises. If you wait too long, you miss them."
This process isn’t always easy. Digital transformation is multidisciplinary, which means it can create significant changes (or additions) to a company's business strategy, design, data science and software engineering.
The DTI has identified 5 ways business leaders can prepare their organizations for digital transformation. We’ve attached a success story to each point to illustrate the impact each of these strategies had on real businesses:
1) Create New Business Models or Digital Offering
These should be agile enough to work with current and future services your industry might design in the future. Their agility will help you integrate future potentially disruptive forces into your business
After a 12 year period of steady decline, the iconic toy maker LEGO found itself close to bankruptcy in 2004. The company then underwent a dramatic digital transformation, restructuring its business to focus on new revenue sources from movies, mobile games, and mobile applications. By 2005, the company reported it had returned to profitability and in 2015, posted 4.81 billion euros in revenue.
2) Find Partnerships with Other Companies in Your Ecosystem
Use these partnerships to make it easier for customers to access products and services they want and for you to strengthen loyalty to your brand.
Having both established themselves as brands embodying adventurous, fearless lifestyles, GoPro and Redbull partnered to produce video content of athletes and adventurers performing awe-inspiring feats. GoPro provided portable cameras with which to capture exploits of adrenaline from a first person perspective. Red Bull used its reputation and experience to run these events. Both companies benefited from exclusive content that expressed their brands.
3) Change Starts From the Top
Changing the status quo is tough. That’s why change has to be spearheaded from the boardroom. Leaders need to make sure their workforce understands why digital is important and how they can help their company find creative ways to face digital challenges
In 2011, magazine publisher Conde Nast surprised observers when they established the Conde Nast Entertainment Unit to fight declining publishing revenue. Network TV veteran Dawn Ostroff was hired as its head. Ostroff was, at the time, a well-respected TV executive with a strong track record for sensing the TV and digital content preferences of young people. At Conde Nast, she used her contacts and experiences to turn magazine stories into digital revenue. In 2016, she led the Condé Nast Entertainment to a $1 million profit, Oscar nomination and more digital traffic than ESPN or BuzzFeed.
4) Does Your Workforce Understand Digital?
Your workforce is going to find it pretty hard to come up with and execute digital strategy if they don’t understand the digital world. That’s why retraining or hiring digital savvy personnel is so important: employees must have a good grasp of the technology they are expected to work with in order for your company to effectively operate in the digital space
In 2015, the Hong Kong based FWD Life Insurance company launched a digital branch, the iFWD, to change its internal operations and advance Fin Tech initiatives in the insurance industry. The 20 people team develops new products to be deployed across Southeast Asia. Only a year after its launch, the iFWD brought in $100 million HKD in sales, 8 new products and 1.3 million visits to its website.
5) Data Security and Privacy
Growing connectivity means you will likely have to spend increasing amounts of time and money protecting the data you collect. A leak of the personal data of your customers will be disastrous for your reputation and is likely to violate multiple privacy laws
4 Facts about the Importance of Cybersecurity
- Cybercrime damage costs are estimated to hit $6 trillion annually by 2021.
- Cybersecurity spending is expected to exceed $1 trillion some time between 2017 and 2021
- In 2016, 40% of companies surveyed expected to experience an insider data breach
- The average cost of a data breach in the US is $ 3.79 USD million
At Altitude Labs, we transform businesses with great software and data science. Read more about how we do digital transformation here.