When it comes to digital transformation, should it be “technology first, strategy later” or the other way round? 

Are you on the right path for digital transformation

In today’s digital world, the phrase “digital transformation” has become a cliché. Even though every business understands the importance of digital transformation, only a few can put it into practice and change the outcome of their business.

However, to be successful, business leaders must not always follow the crowd or trends but understand their corporate capabilities, define priorities, and plan ahead of time to get started on the path to success.

According to a survey by SME Corp, 60% of businesses don’t know enough about financing and digital technologies, and 34% think digital transformation costs too much, citing things like the cost of internet connections, digital hardware, and subscription fees for software.

数字转型,你走对了吗? Are you on the right path for digital transformation? 陈惠盈 Teresa Tan Hooi Ying CIMB Islamic Bank
Power SME Webinar – CIMB x Sin Chew Daily | Teresa Tan Hooi Ying Vice President at CIMB Islamic Bank

In addition, there is a scarcity of qualified people as nearly half of the organisations polled reported that their staff lacked vital skills, such as sales and marketing, business management, and information technology. This is the most significant roadblock in shifting from traditional to digital operations.

While digital transformation is necessary, if a company is unduly focused or just focused on short-term profits, the company is doomed from the start. We’ll look at the conditions that digital transformation must meet, how to plan the strategy and run it effectively in the real world, and how to make the strategy work.

Laying the groundwork for digital transformation

Because most companies have the mentality of following the trend and testing the waters, they blindly embark on digital transformation without understanding whether the transformation aligns with the company’s vision.

This, combined with the fact that the focus and evaluation indicators are typically very short-sighted, leads to the failure of most digital transformation projects.

Businesses must follow the three steps below to determine their unique condition and how much their organisation has changed because of technology.

Three prerequisites for digital transformation

Data

In this era of the digital economy, data plays an increasingly important role in digital transformation. If businesses want to be successful, they need to learn to read and use data.

The essential component of data is that it serves as a bridge for information communication, allowing for improved communication efficiency between internal and external links across the organisation among employees, customers, and suppliers.

So, what exactly is data?

The following are the types of data available for use.

  • Sales data
  • Customer data
  • Vendor/Supplier data
  • Business data
  • Inventory data

For digital transformation to succeed, businesses must first identify how digital technology can provide an advantage to the company and then use digital technology to efficiently help the team process the data to accomplish the desired results.

So, how do you analyse the data?

As a starting point, look at the available data. For instance, look at the sales data; which products have the highest sales, at what point in time are these products most sold, which products have the highest enquiry rate, and so on.

Furthermore, to better understand customer preferences and behaviours, companies should examine their own business and sales data. The company can forecast the trend, draw definitive conclusions, and optimise product and sales methods.

Talent

Another common obstacle in digital transformation is that not all employees are on board or willing to help out.

Technology itself is not central to the process of digital transformation. Organisations can buy any technology they want, but whether or not they can use it effectively is based on the core talent and skills available in the company.

It doesn’t matter how good a transformation strategy is if it doesn’t have the right people to implement it.

When a company announces that it is embarking on a digital transformation initiative, many employees become fearful that they will lose their jobs. Consequently, company leaders should involve employees in this plan from the beginning. Ensure that they understand the plan as a whole and participate in its implementation.

It’s also essential to make employees more aware of and educated about digital technologies, whether they work for the board of directors, the human resources department, or the management department. This way, they know their role in the company’s transformation plan. Taking care of this is the first step toward implementing digital transformation.

Set long-term goals

Companies need to figure out what they want to do before departing for a digital transformation journey. Is the goal to increase customer retention and income? How about increasing productivity, streamlining service management, or increasing agility and flexibility? What services or products do you offer that set you apart from your competitors? And again, what is your long-term goal: five years, ten years, or even twenty years?

After the goal has been set, the business leader must push towards the goal for the team to develop the proper habits and behaviour toward achieving the goal.

数字转型,你走对了吗?Are you on the right path for digital transformation? 拿督黄婉冰 Dato’ Ng Wan Peng Big Bad Wolf | Digital Penang
Power SME Webinar – CIMB x Sin Chew Daily | Dato’ Ng Wan Peng President of Big Bad Wolf Ventures & Board of Director of Digital Penang Sdn Bhd

Case Study: Retail – Book Exhibitions

Before the pandemic, the book fairs organized by book retailers were significant—with thousands of people attending regularly—and they were on their way to international markets.

However, due to the outbreak of the pandemic, all businesses were brought to a standstill, which means that all offline book exhibitions must be halted, and they have no alternative but to transform their business.

While a few months were spent on planning the transformation path, building the website, selling online, and moving offline sales to the online channel, this isn’t a complete or adequate transformation. It’s just a first step.

The second phase is to link the frontend and backend of the business, which includes logistics, warehousing, and supply chain, to achieve overall success with digital transformation.

Setting goals and making plans is essential for businesses. They should also figure out which tasks should be done first and which tasks can be done later.

If, for example, all physical documents must be transferred to the cloud within a year, all departments must get familiar with the functioning and effective use of the system.

The next step is to design an online presence,  from updating page information on social media to updating website information, so that all relevant departments are familiar with the operation and can put it to good use.

Next, artificial intelligence (such as chatbots) can be introduced to respond to customer enquiries automatically; and so on.

数字转型,你走对了吗?Are you on the right path for digital transformation? 曾淇赐 Chan Kee Siak | Exabytes
Power SME Webinar – CIMB x Sin Chew Daily | Chan Kee Siak – CEO and Founder of Exabytes

There are three parts to digital transformation, as outlined below. 

Digitisation

People use this term to describe how data is changed so that computers can use it.

Example: scanning paper documents and turning them into electronic documents.

Digitalisation

This involves digitising sales and operational processes.

Example: setting up eCommerce stores and electronic payment methods.

Digital Transformation

This involves the use of software tools and software technology to empower businesses to gain the capacity to innovate by changing existing business models and consumption patterns.

Example: blockchain and sharing economy.

Finally, digital technologies should be regarded as tools rather than strategic alternatives to traditional methods. Because many businesses are under the impression that artificial intelligence (AI), virtual reality (VR), and the Internet are ‘cool,” and since tech giants are adopting them, they must allow their teams to use these technologies too.

Thinking in this manner can be counter-intuitive. “What exactly is my organisation trying to solve?” should be the first question that businesses ask themselves. After getting the answer, we determine what data we need to collect, and so forth until we settle on “what digital technology my team requires to process data effectively.”

At some point, all organisations will be required to transform, with some moving toward digital transformation. Even so, the adoption of digital tools should be achieved at the very least for all businesses since this can significantly improve the operational efficiency of businesses.

However, it is crucial to point out that organisations should not make too many dramatic changes, especially in the beginning stage. COVID-19 is an unprecedented catastrophe in the business world that cannot be predicted and which end date we do not yet know.

Businesses should ask themselves what is immutable rather than create a grand, comprehensive strategic plan. Assuming you’ve concluded that your branding will still be essential to your products and customers after five years, it’s time to increase your spending on branding and consumer insights. Business owners can’t always follow the trend; instead, they should identify the immutable before embarking on digital transformation.

To this end, Exabytes provide a dedicated digital consultant and support to help businesses identify and address the challenges they face on the digital transformation journey.

Grow Your Business Online is our slogan and we are always here to help.

Talk to our consultant

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