If you’re among those business executives who are taking the prospect of digital disruption seriously, you’re already ahead of the curve. Studies show that across all sectors, four in 10 of the top firms in an industry will be displaced by digital disruption within the next half-decade. Perhaps even more surprising is the fact that surveys also show that as many as 45 percent of companies across all industries do not consider the impending effects of digital disruption as a matter deserving of executive-level attention. Of the Fortune 100 companies listed in 1975, only 25% of them are currently on the list today. Those that do not adapt and change will be disrupted.
If you have yet to factor digital disruption into the future of your business, it’s not too late to begin. Companies should always consider specific organizational factors like strategy, company culture, technological IQ, and overall readiness when choosing the right way to approach digitization. However, the following three models provide a framework and guidelines to take operations digital.
Choose a partner to jumpstart digitization.
Large companies whose operations are deeply rooted in traditional business models may find it easier to outsource digital practices in the beginning. Companies that were “born” digital, or those that have invested significant resources into developing a digital platform, may have a modern service that your business could strategically use to bring its own operations into the future. For example, a company without a strong ability to reach customers online may partner with a social media company to advertise their products or services until they can establish a digital presence on their own.
Some companies see long-term digital partnerships with outside entities as an option that increases their relevance and profitability in the marketplace without a complete overhaul of their business model. In these instances, both companies avoid the complicated, drawn-out process of acquisitions and formal joint ventures while still combining resources to reach the greatest possible number of consumers.
Shift your primary organizational focus to going digital.
One of the most common issues that companies encounter when attempting to go digital is department leaders who do not understand why digitization is receiving priority over other operational aspects. Prioritizing digital transformation can be especially difficult for long-established companies that have operated under a traditional business model for decades. Certain company leaders suddenly find themselves having to focus on a process they don’t completely understand.
Still, making digitization your main goal is an effective way to help your business succeed in the digital age. As CEO, this approach requires you to redistribute the budget and departmental headcounts in order to provide more support for digital programs. Some executives even hire CDOs (chief digital officers) in order to oversee the transition.
Leaders who opt for this approach can’t forget to maintain strong lines of communication with department leaders throughout the duration of the transformative process. Making sure all leaders understand the value of digitization will help mitigate animosity and ward off potential internal conflict.
Digitize from the outside-in.
For certain businesses, internal processes cannot be transformed through a digitization without completely shutting down operations temporarily. In these instances, companies should consider reversing the order of the typical technological integration model.
By separating analog operations from their digital counterparts, a company may designate a subset of employees to work on digitizing operational processes without interrupting the company’s daily functions. Once the digital platforms are in place, the traditional processes can be migrated over and integrated seamlessly so that productivity remains relatively constant .
This method can be extremely effective, but it must be done with care. Companies that undertake this approach to digital transformation must carefully consider the order in which processes are integrated and closely monitor the effects of each process as it is phased in. Being smart about the order in which processes are integrated will help avoid chaos during the transformation.