Managing digital transformation within companies

When the Internet becomes a field of supply and demand to be received without restrictions or intermediaries, you are in the presence of digital transformation, and this is the level that you may try to reach as the owner of a traditional company that aspires to transfer its operations to the Internet. As your employees take their places on the broad ether network, where they can reach the direct beneficiary of their services, products and market value, you may be wondering how to effectively manage the digital transformation of your company?

Defining digital transformation and its importance

Digital Transformation is defined as the use of digital technology in providing services or businesses by replacing manual or non-digital processes with digital ones or changing old digital technologies with newer ones. The phenomenon of digital transformation has started since the advent of computers and has increased exponentially with the advent of the Internet. That is, it is not new at all.

This proliferation makes us stand on two great facts: The first is that digital transformation is already present in different degrees in every company or business. The second is that it becomes more and more important with time. It will flourish in the future because it is the natural vessel for all advanced technological applications ranging from electronic games to modeling, industrial simulation, 3D printing, automation, artificial intelligence and other fields.

It is not limited to the aforementioned fields, but digital transformation includes all areas that embrace modern technology and what will come after it, which has no limits except for human imagination and its ability to innovate and invent new solutions. This means that it will make a significant contribution to the economies of countries and companies, of course, with its estimated added value.

Digital transformation, in addition to the costs of managing and operating a traditional company, also serves to introduce the company to target groups through social media, websites, and high-speed and wide communications. The company is better able to reach a larger geographic area, and categories of customers that go beyond the categories defined in the traditional business plan. It also makes production easier, more economical, and more. It also opens the way for the company to hire an unlimited number of experts in various fields at a cost much lower than the cost of traditional recruitment.

While the contribution of digital transformation in some countries of the world reaches a third, it is non-existent in some countries and does not exceed 4% of GDP compared to the global average of 22%. However, this is not the end of the story, digital transformation is taking place in full swing from the ocean to the Gulf.

According to experts, the number of digital users is likely to reach 160 million users by 2025. They can contribute more than 3.5% of the GDP, which is equivalent to approximately 95 billion US dollars. In addition, digital transformation may positively affect financial and social inclusion, combat poverty, increase opportunities for high-quality health and educational care, and reduce pollution burdens on the environment by reducing carbon dioxide emissions.

The digital transformation appears in the spread of the digital representation of companies and businesses, the increasing demand for digital services and the centralization of goods, products and services around the customer, instead of focusing the production process on products as in the past. The proliferation of modern software plays an important role in defining the digital transformation of traditional companies.

The digital transformation tools are represented in the digital applications, programs and systems through which you will accomplish the operations or services provided by your company. If your company provides financial and accounting services to companies, you will need software to organize customer projects, and to perform the accounting tasks for each company separately, and a system for communicating with customers. Tools for management, human resources, and whether your company is aiming for a partial or complete transformation, there are a few steps that will transport you safely into the digital world.

Advantages of digital transformation for traditional companies

Satisfaction and happiness of customers, something that is impossible to achieve with traditional methods, or simply far outweighs its feasibility. One of the great advantages of switching to the Internet is; User experience as a very important factor in the growth of any business. Experts say that one point in a positive user experience scale equals millions of dollars in revenue.

So this is your staple to achieve more business growth by meeting the needs of your customers in terms of price, quality and speed. These are elements that can only be effectively achieved by moving to digital operations and improving the user experience, which is what digital transformation is basically about.

The transition of your traditional company to the digital world is accompanied by an increase in the level of productivity, a quick response to changes in the markets, and in any case, your budget will see a reduction in expenses and an increase in profits. This is clearly demonstrated by what happened last year, when Amazon's profits tripled thanks to the increase in the number of online shoppers during the period of total closure during the Corona pandemic. Although this is an unplanned rise by the company, it is a positive impact of digital transformation. On the other hand, Apple's profits fell due to its inability to keep pace with the wave of digital transformation, and the delay in launching its new phone, "iPhone 12".

Digital transformation management steps

You can transform your company from a traditional company to a digital company that provides its services, and accomplishes its various operations via the Internet, by following one of the modern strategies or devising a new one that suits your company specifically. In both cases, your chosen plan should include changes in the following items, which are linked to each other by hierarchy and dependence, which are clearly visible in their sequence:

First: Assessing the degree of digital transformation of the company

Before starting the digital transformation process, the company needs to assess its digitization status. Identify the processes that are currently undergoing or embodying this transformation, and then determine the true starting point. The assessment of the degree of transformation is focused on five axes:

1. The ratio of the company's technology users to the percentage of licensed software.

Numbering or digitization depends primarily on the use of technology tools, software and special and ready-made applications in the performance of the various operations of the company. Of course, a company is not without aspects of digital transformation, so when we plan to move from the traditional mode to the modern situation, it is necessary to take into account the actual steps that took place automatically earlier. Starting from scratch is always discouraged in ordinary life, let alone in businesses where the slightest overspending or mentorship makes a difference.

2. Analysis of the possibilities and constraints of use.

Digital scalability is a feature that is not available in all departments. There are departments in which work conditions require determinants of digital transformation, such as warehousing and logistics tasks that still depend on humans, although this is one of the variables that are beginning to appear on the horizon. As the applications of artificial intelligence are steadily invading the markets day by day. The company's project management department needs to analyze the benefits resulting from the transformation, and does not neglect the obstacles to using technology in the operations that take place within the company, whether between its members working in the department, and each other, or between the company and prospective or current/old clients.

3. Quantity of operations executed on new software/new system

The operations that are actually carried out through the computer or digital applications constitute a percentage of the operations included in the digital transformation process. Therefore, what has already been done should be taken into account and evaluated in the previous stage. Top management has to figure out how many processes actually need to be transformed from the total number of previously digitized processes.

4. Productivity Indicators

Measuring productivity indicators in light of the digital transformation is one of the things that strongly influence management decisions regarding the requirements of the new digital system. Production indicators are based on a number of things, including: production measurements, access to target groups and new markets, and the profits that accrue to the company from implementing digital transformation policies and building a new work culture.

5. Return on investment in digital transformation

When an investor pays to implement digital transformation, and spends a lot of money on software, hardware, and hardware preparation needed to carry out the task perfectly, it means that he expects profits that outweigh these expenses. So it is very important to put the expected returns from the investment in the field.

Second: change the business model

In light of the previous information, determine what requires modification or change of the business model. And choose what suits your company's needs from tools that enable it to carry out tasks on the Internet, and carry out administrative operations, marketing, sales, automation and communication with customers. This is done by taking into account several factors including cost, ease, security, and the technical capabilities of the team and target groups alike.

These changes include the vision, mission, objectives, marketing, business plan and budget. By making the necessary changes to keep pace with the current changes that accompany the process of digital transformation of the company, which will take it out from the number of traditional companies to the spaces of digital travels, and the worlds of electronic commerce and artificial intelligence, leading to an innovative model that does not only achieve the goals of the stage, but is characterized by sufficient openness to accommodate the acceleration The tremendous in technological and digital development, achieving sustainability and the ability to withstand the frenetic digital race that includes the entire world.

Since digital transformation is not only concerned with technology, but also goes beyond it in a number of aspects, it can be summarized in these five axes:

1. User Experience

It is one of the most important characteristics of digital transformation. Whether the user is an entrepreneur who benefits from digital applications or a customer who requests services or products. In both cases it is necessary to provide speed, ease, clarity, fun and effectiveness in the user experience.

2. agility operations

Many companies everywhere have tended to increase the agility of their administrative, production and process systems. But the main advantage lies in the flexibility it provides in operations, the integration of human resources and digital tools, reducing risks and ensuring that goals are achieved. This does not explain the apparent scarcity of adoption by major companies in the world, but at the same time it does not prevent the legitimate expectation of an increase in the demand for process agility tools in the near future.

3. Culture

Digital culture or digital maturity is something that requires work to achieve within the organization - especially - when the company is less advanced in the digital transformation ladder. Increasing the level of digital culture among employees of companies desiring digital transformation is a must. For example, awareness campaigns, digital education and the production of educational content that includes both employees and customers are essential elements for the success of the digital transformation process.

4. Empowering workers

The capabilities of employees to keep pace with change in the work environment and methods are no less important than capital. Capabilities and talents are really important business heads. The transition to digital transformation requires a measure of attention to the training needs of employees and workers. And empowering them with the necessary tools that move them to the future of business, and make traditional tasks easier and more accessible, and open up broad prospects for unlimited development in the areas of specialization.

5. Integration of digital technologies

Digital integration is the joint work through digital tools and applications so that everyone can access data or information on an electronic device inside the company from outside, without compromising the privacy and security of this data.

Third: Forming the Transformation Leaders Team

It is very useful at this stage to ensure that the work team is enriched with effective leadership cadres with experience and skill in spreading the culture of digital transformation while preserving the company’s personality, brand and information privacy. The team tasked with driving change in your company should have digital competence, brilliance in communication, and the ability to positively influence all parties involved in the process.

The role of Team Leaders includes revamping and developing processes to improve overall organizational efficiency and effectiveness such as: data and document management, information dissemination, etc. As the stage manager in your company, you must support the work at all levels. And in the process, don't forget to add more flexibility to the decision-making process.

Of course, it is possible to attract leaders from outside the company to support the digital transformation of the company’s working teams, or to train some leaders from the various departments in preparation for them to take on the task of changing the ways of thinking of workers and to ensure that they master the new work tools. At this point, it is quite possible to change the composition of the work teams and to hire new employees who work remotely.

Fourth: Digital Transformation Strategy

While emphasizing the previous points as parts of the grand strategy to bring digital transformation and move to remote work, a different type of planning is required, in which middle and upper management may break the barriers that prevent a qualitative leap in production through open planning. And the adoption of work systems and policies that can be modified and developed to keep pace with the acceleration that characterizes the field of work on the Internet. By abolishing the structural hierarchy, everyone works under the supervision of the director. Each department of the company operates independently of the other departments in accomplishing its tasks and according to the work plan.

Fifth: Effective Communication Strategy

Effective communication is the backbone of the digital transformation process. It is the goal and purpose of the entire process. The enormous potential that the information revolution currently offers owes much to the parallel revolution in communications. Although the need for effective communication begins with the formation of the company through achieving harmony and harmony in the joint work between team management and company management on the one hand, and between team members and some of them on the other.

Therefore, great care should be taken to link the three business elements to a well-established channel of open, free and effective communication through a strong communication system supported by reliable applications that are suitable for the purposes of the company and its business model, characterized by high quality and superior concurrency. Hsoub has developed the Ana Tool, a tool that brings together everything you need to manage your online business and team in one place, that you can use on your journey to develop your company and the journey to digital transformation.

Of course, this does not substitute for transparency, credibility and freedom in expressing ideas and opinions within the organization, which ensures the dissolution of barriers between the three mentioned elements (management, work team, customers), and thus ensuring the firmness of the company's vision and goals in the conscience of workers after they leave traditional offices.

Effective communication also educates customers and improves marketing and advertising results with accurate and creative descriptions of products and services. One of the great benefits of effective communication is to keep senior and middle management informed of the most important challenges and risks surrounding the process of digital transformation and sustainability that parallels surviving in a world based on innovation, renewal and alternatives.

Sixth: Evaluate the transformation process

Assessment of the current situation in terms of digitization remains an essential process of management. And change management and it will remain essential even during and after the transformation, but here it adopts criteria and indicators to measure performance and productivity that differ slightly - especially - in their pace and proximity. A special system for evaluation and follow-up can be designed or one of the ready-made indicators can be used as long as it meets the purpose. It is a previous step aimed at seeking development, not just sustainability. You should focus on some values ​​whose high is an indicator of success.

The level of digital maturity of employees in the company, whether they are permanent employees or freelancers assigned to specific projects.

Focus on user experience in plans and strategies.

Percentage of revenue from new products, services and operations.

Seventh: Development and innovation

In an accelerating world that is eager to innovate new solutions and product development, the company must adopt a strong policy of development, innovation and reproduction of the business model, including the requirements of practical reality, market needs, customer desires, competition requirements, survival, obstacles to the progress of transformation or the difficulties surrounding the changing work environment. In this way, Netflix managed to increase the number of its subscribers by 74% in the last quarter of 2020 and in just three months thanks to the success of its orientation, which it launched shortly before the closure, as it launched a continuous broadcast without stopping, at a time when there was no choice but to stay at home.