You have likely heard the term “digital transformation” in a professional context. This term has become ever more prevalent since the start of the COVID-19 pandemic. Digital transformation initiatives have been leveraged to transform business processes and business outcomes.
But what is digital transformation really – and why does it matter? Read on to find out!
Digitization vs. Digitalization vs. Digital Transformation
Let’s discuss the differences between three similar-sounding terms: digitization, digitalization, and digital transformation.
- Digitization: The process of switching information from analog tools to digital technology.
- Digitalization: The process of leveraging a digital business environment to automate business processes.
- Digital Transformation: The process of integrating the technology of the digital age for increasing productivity, building new business models, adapting employee cultures, and meeting evolving consumer and customer expectations.
Drivers of Digital Transformation
Digital transformation is a broad, radical shift in business operations. New technologies are integrated to drastically streamline, automate, and simplify all professional processes of an organization. Businesses embrace digital transformation to evolve and avoid falling behind.
But what drives digital transformation?
Business Strategy
Organizations are working to digitally enhance their overall business models. There is often a push for businesses to completely revamp their products and services for the digital age. Businesses must merge more manual and stagnant processes with more streamlined digital processes. This evolution is required for seamless transformational journeys.
Businesses in the digital age can capitalize on new opportunities to grow their services and products. They can evolve their go-to-market strategies to lead a new form of growth.
Business Operations
Organizations can improve operational processes with the right technology to improve performance, reduce costs, and hasten go-to-market time.
The pandemic has elucidated the benefits of organizations embracing digital processes. Support for remote work has skyrocketed. This need for remote operations has highlighted the diversified application of cloud computing and business technology for working, communicating, and sharing knowledge.
A strong digital transformation strategy allows for heightened transparency due to a more integrated and globalized process. Modern business technology ever-increasingly supports accurate, data-driven decision-making. What’s more, the increasing accessibility and application of artificial intelligence and machine learning help drastically with process automation, insights, and risk reduction.
User or Customer Experience
The experience of a customer, user, or client can be improved in a variety of ways with proper digital transformation journeys.
With segmentation and dynamic analytics, organizations can be more informed regarding the ever-present needs of their customers. Selling can be evolved with digital marketplaces, marketing informed by behavioral analytics, and cobranding and collaboration.
Self-serve customer support can help customers, clients, and users with help and governance. Cross-channel availability for help and assistance has bridged the previous gap between customers and business/product representatives.
The advent of new business technology has provided exciting event opportunities as well. For example, educational webinars and group calls have been hosted to connect business professionals across industries, time zones, and company cultures.
From a software perspective, digital transformation has brought on more governance for users. High levels of software configurability and flexibility allow users to leverage software features according to their specific needs. Seamless integrations and connectors allow for process unification across platforms. A high level of scalability allows organizations to evolve their software usage as process complexity grows.
4 Summary Areas of Digital Transformation
Here are four general areas for digital transformation success.
- Technology: Demonstrate the value of business technology for organizational operations. This value should be clear to internal stakeholders, external collaborators, clients, customers, users, etc.
- Data: Protect important business data and support user-friendly data management processes.
- Process: Provide key performance indicators (KPIs) to demonstrate process evolution and enhancement while gaining actionable insights.
- Business Growth: Embrace ever-increasingly complex processes and more robust offerings per a given digital transformation strategy.
Why Does Digital Transformation Matter?
As the needs of clients, users, stakeholders, and customers evolve, business technology must evolve with them. Without digital transformation, organizations in any industry can fail to survive and prosper. User-friendly, scalable, and widely applicable technology is becoming increasingly available. As such, organizations need to ensure that they are not only keeping up – but quickly innovating.
4 Digital Transformation KPIs
Here are four digital transformation key performance indicators (KPIs) to measure success:
- Strategy Efficiency: Strategy efficiency performance metrics may include project cycle time, customer trends, value assessments, and whether or not milestones are met.
- Strategy Efficacy: Strategy efficacy performance metrics may include the increase or decrease of deals and contracts, customer retention rates, increased or decreased revenue, and other comparisons to past trends prior to the strategy’s implementation.
- Micro-Metrics: Micro-metrics allow organizations to learn and adjust during agile experimentations of strategy.
- Strategy Outcomes: Strategy outcomes include strategic impact (revenue growth, lifetime customer value), operational impact (productivity improvements, scale, operational efficiencies), and cost impact.
Get Started With Legal Ops Digital Transformation
Now you can define digital transformation, and you understand its importance. You know how you can get started with digital transformation. As such, you can get started with legal operations digital transformation.
There is one contract management software solution that offers the right tools for a seamless contract management digital transformation. The solution that contract managers need is CobbleStone Contract Insight®.
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*Legal Disclaimer: This article is not legal advice. The content of this article is for educational purposes only. The information on this website may not present the most up-to-date legal information. Readers should contact their attorneys for legal advice regarding any particular legal matter.
