Digital transformation: What is it and how can it benefit you?
Different authors understand and define the concept of digital transformation in different ways. However, what they all have in common is the idea of a change that occurs thanks to the use of digital technologies in all aspects of society. Authors Andreas Kaplan and Michael Haenlein mention this concept in their book Digital transformation and disruption: On big data, blockchain, artificial intelligence, and other things. They are providing a single, easy to understand phrase. The implementation of digital technologies has brought changes to our society, and it is important to know and analyze these changes in order to implement the new technologies in the best way possible.
This transformation had already begun many years ago, however, the COVID-19 pandemic accelerated this deployment of technology in different aspects of life, from the personal, at home, within the family, in large groups of friends and family, to business, and a society as a whole. A collective change of mindset forced society to learn about and use technologies that were rarely used before or that were perceived as being exclusive to the new generations.
Some authors consider that the digital transformation points to a world where everything is connected. This means that there is no longer anything that separates any person in the world from communicating and interacting, especially in a business context.
Companies and the business world represent a very important part of human society, and large-scale digital transformation must be focused on them. No one, whether as a person or as a company, can be left behind. Growth is necessary and it is not just a matter of keeping up with other companies and organizations, rather, one must reach that point and be the differentiator in order to grow, look for new ways to make bigger and better contributions to the business and improve the customer experience.
Ignorance of existing processes and technologies, as well as the myths around new technologies digital transformation often slow down companies, which is why information is crucial for growth.
The importance of digital transformation
Digital transformation in companies requires the integration of technologies in all its areas, especially across core systems that run the business, like digital banking platforms, insurance agency management systems, HR systems such as Workday, and even systems such as Salesforce. It must be implemented in such a way that manual or paper-based processes disappear, and the siloed approach of the past is replaced by data that flows between systems and is easily and instantly accessible and retrievable. An example would be customer agreements and contracts. These often require signatures and when people use pen and paper to sign them, those paper records are archived in physical warehouses for years. Through digital transformation with electronic signatures, what starts as a digital file in Word remains digital for the entire lifecycle of the document – from the time it is created and sent for signature, through to signing and storage. The e-signed document and the data it contains is then accessible, downloadable, and retrievable in a digital format (PDF). Integrations between systems also make it possible to use the digital data captured as part of an electronic signature process to trigger downstream processes (the next steps in the process). An example would be in customer onboarding and account opening, where once the new client has applied to join a bank or credit union and they have finished signing all the necessary forms, that data could flow into another system to generate and send a welcome package – automatically, without the need for any manual work by an emloyee.
Often, digital transformation requires a change in culture and takes several iterations until it works at its best. According to Michael Decouto, director de marketing y digital, Clarien Bank, “La cultura digital de nuestra organización es una parte integral del logro de nuestros objetivos digitales y cumpliendo nuestra promesa de marca."
It is important to start from within the organizational culture to establish digital-centric thinking. You have to experiment, which can be difficult, especially if the results are not visible in the short term.Keeping up with current technologies involves advantages in the organization and externally. The optimization of processes and data analysis within the organization leads to better customer experiences, better relationships with collaborators, but above all to better decision-making within the company. And of course, it also helps to identify new business opportunities.
A change in culture is very important to give a meaning to digital transformation. It is important to understand the importance of making the necessary changes in order to move forward. However, an analysis and reinvention of processes, products, and sometimes whole areas is required to be in a position to take advantage of technology in the best way. The workflow itself could change radically, especially as organizations adapt to the mobile channel, and it is important that the people who make up the organization are willing to go through these changes, starting with the heads of the organizations.
This new mindset and culture of acceptance of change is necessary given the rapid evolution of technology. Tomorrow, the entire process that has been evolving and developing in recent years could change and it is important to be prepared for it and accept it.
Critical Elements of Digital Transformation According to McKinsey
According to the consulting firm McKinsey, in order for a digital transformation to be successful, four critical elements are required: talent, data, technology and a fast execution. Technology is therefore the engine of digital transformation, data is its fuel, the process is the guiding system and the capacity for organizational change is the landing platform of this new digital era. Everyone needs to be on board to work together to provide the best customer experience.
Advantages of digital transformation
One of the greatest competitive advantages that digital transformation provides is the generation of data. In analogous processes, no data is generated, or in some cases data must be collected manually, slowly, and inefficiently. Data can be generated in large quantities, so data analysis is necessary, and it must be used it in an efficient and organized way so that it does not become a disadvantage.
In addition to the generation of data, the main advantages of digital transformation for organizations include:
- Optimize processes in the organization. Digital transformation is an opportunity to improve processes with new technologies. We know that analogous processes that do not involve digitalization can be much slower. For example, one of the world’s leading auto finance companies recently automated the financing process with customers. Moving from complexity to simplicity is a daunting challenge that requires effort and persistence, but if properly achieved, can yield significant benefits. This is what led the company to leverage OneSpan Sign and Pega as an integrated solution, enabling seamless digital workflows and simplifying the client experience. As a result, they have reduced processing times up to 70% and reduced errors that typically happen as part of a manual, paper-based workflow.
- Opportunities for a quick response. By doing everything faster, our opportunities to respond are better and more. The data obtained becomes a very useful tool to generate optimal responses in the short and long term.
- Improve internal and external communication in the organization. There are many communication tools nowadays and there is one to suit each organization. Relationships with associates, as well as with customers, are crucial for the growth of a company. A good use of technology brings the client closer and creates customer loyalty.
- Optimize internal and external costs. Communication tools already provide a big improvement when it comes to costs and expenses. However, optimizing processes also results in a lower use of resources, or, at a minimum, better resources at a lower cost.
- Attract the best and most skilled talent. Attracting talent is never an easy task for the human resources department. Businesses usually want the best people, but it is important that they are also up to date and that they can handle the best technologies, as well as being willing to change and apply that knowledge. The organization will not attract the best talent if it has not begun this process of transformation.
As previously mentioned, what these and many other advantages have in common is the use of real-time data as the main source of progress. It is important to always measure things correctly, especially in order to use technology in the best way in all areas of a company.
How to start the process of digital transformation for organizations
The first step is dealing with the culture of the organization. Digital transformation will not be complete without a change-ready way of thinking, as well as a mindset of continuous improvement. Training the organization to deal with new technologies is a second step, but it will have no effect if the people within the organization are not willing to embrace that change.
Training should focus on digital skills. Communication, dynamics of remote work, new tools such as collaboration platforms, smart forms, electronic signatures and videoconferencing, and even self-learning are some of the skills that must be developed. It may involve not only a change in processes, but also in the product or the business model itself, and employees should be prepared for it. It can only work if employees leave their comfort zone.
A next step is to focus on designing digital strategies. During the digital transformation process in companies, very often there are processes that are maintained while the transformation is still in progress. Although necessary, the focus of the new strategies should be on new technologies and digital tools, or at least include them.
New opportunities arise from new technologies. Customers, employees, the business itself and the strategy are the most important aspects for the business to function, however, it is important to do everything with a mindset of change and adaptation, as well as a focus on new technologies.
OneSpan offers digitization technologies such as e-signature and digital identity verification, to enable digital transformation for organizations and their customers, partners, and employees. Authentication solutions, fraud prevention tools, and mobile app security are other OneSpan products that help companies secure their digital processes for the online and mobile channels to minimize risk and protect the customer’s digital journey. This would not be possible were it not for the technologies that have been developed and others that are yet to come.