In the current technological era, digital transformation is a familiar phrase to us. Digital transformation is a large-scale change and not all businesses have enough financial and human resources to implement digital transformation quickly and comprehensively. So in today's post, Johnson's Blog will help you understand about What are the levels of digital transformation?.
What is digital transformation?
Currently, there are many explanations for the concept “What is digital transformation”. Therefore, it is difficult to define exactly what digital transformation is, because this concept will have differences in different fields.
In the simplest terms and from a business perspective digital conversion is the integration of digital technologies into all areas of an enterprise, they take advantage of digital technologies to change the business model, the way businesses operate as well as provide new values for customers. of the enterprise. Digital transformation also helps businesses to constantly innovate, experiment with more new models and also accept failure.
In Vietnam, digital transformation is often understood in the sense that the process of changing a traditional business model to a digital business operated by applying new digital technologies such as big data, cloud computing. Cloud) or Internet of Things (IoT) aims to change operating methods, work processes, and even company culture.
Digital transformation is also very easily confused with the concept of digitization. We can simply understand that “Digitalization” is the process of modernizing conventional systems to digital systems. For example, converting documents from paper to soft files stored on computers, etc. Meanwhile, digital transformation is the extraction of data obtained from the digitization process, and then using high technologies for analysis. , transform the data to produce higher value data. Or to put it simply, digitization is seen as part of the digital transformation process.
>>> See more: The role of leadership in digital transformation What is for business?
What are the levels of digital transformation?
Overall, there are three levels of digital transformation that businesses can make:
- Switch operation: This level of transformation focuses on improving operational efficiency and streamlining business processes through technology. Examples include automating manual processes, improving data management and analysis, and leveraging cloud computing and other technologies.
- Transforming customer experience: This level of conversion focuses on improving the customer experience through the use of technology. Examples include using mobile apps and online channels to enhance customer interactions and interactions, personalizing customer interactions through the use of data and analytics, while leveraging artificial intelligence and other technologies to deliver a seamless customer experience.
- Business model transformationThis level of transformation involves fundamentally changing the way a business operates, including its products and services, target markets, and revenue streams. Examples include using digital technology to disrupt traditional business models, leveraging the Internet of Things (IoT) to create new products and services, and using data and analytics to inform business decisions and create new business opportunities.
Each level of digital transformation can bring significant benefits to a business, including improved efficiency, enhanced customer engagement, and new revenue streams. The degree of transformation a business chooses to make will depend on its goals, resources, and competitive landscape. However, businesses embracing digital transformation at all levels are well positioned to succeed in today's digital marketplace.
Operational transformation is the first level of digital transformation a business can take. It involves using technology to improve operational efficiency and streamline business processes. The goal of operational transformation is to reduce costs, improve the speed of business processes, and enhance the overall customer experience. Some examples of operational transformation initiatives include:
- Automate manual processes: Automating manual processes, such as data entry, invoicing, and customer service, can reduce errors and improve efficiency.
- Improved data management and analysis: By leveraging data and analytics, businesses can better understand their operations and make informed decisions to improve efficiency and performance.
- Leverage cloud computing and other technologies: Cloud computing and other technologies can help businesses scale their operations, reduce costs, and improve their ability to respond to changing market conditions.
- Deploy online and mobile channels: By providing online and mobile channels, businesses can improve the customer experience and increase the accessibility of their products and services.
Through operational transformation, businesses can gain a competitive advantage by reducing costs, improving efficiency, and enhancing the customer experience. In turn, this can help businesses increase revenue, attract new customers, and build a solid reputation in their industry.
Transforming customer experience
Customer experience transformation is the second level of digital transformation that businesses can make. It focuses on improving the customer experience through the use of technology. The goal of customer experience transformation is to create a seamless and personalized customer experience that enhances customer engagement and loyalty. Some examples of customer experience transformation initiatives include:
- Increase customer engagement through mobile and online channels: By providing online and mobile channels, businesses can improve the customer experience and increase the accessibility of their products and services.
- Personalize customer interactions through the use of data and analytics: By leveraging data and analytics, businesses can better understand their customers' behaviors and preferences, allowing them to personalize interactions and improve the overall customer experience.
- Leverage artificial intelligence and other technologies: Artificial intelligence and other technologies can help businesses provide a more seamless customer experience, such as through chatbots for customer service or personalized product recommendations.
- Implement a multi-channel experience: Omnichannel experiences involve providing a consistent and cohesive customer experience across all channels, including in-store, online, and mobile.
Through transforming the customer experience, businesses can improve customer engagement, increase customer loyalty, and set themselves apart from the competition. In turn, this can help businesses increase revenue, reduce customer churn, and build a solid reputation in their industry.
Business model transformation
Business model transformation is the third level of digital transformation that businesses can make. It involves a fundamental change in the way a business operates and generates revenue. The goal of business model transformation is to create new revenue streams, reduce costs, and increase competitiveness. Some examples of business model transformation initiatives include:
- Moving from a product-based business model to a service-based business model: This involves shifting focus from selling products to providing services, such as through subscriptions or maintenance agreements.
- Adopt new business models, such as the sharing economy: This involves leveraging technology to generate new revenue streams through platforms that connect customers and service providers, such as carpooling or home sharing.
- Create new value propositions through the use of data and analytics: By leveraging data and analytics, businesses can better understand customer behavior and preferences, allowing them to create new value propositions and generate new revenue streams.
- Reimagining traditional business models through the use of technology: Technology can be used to reimagine traditional business models and create new revenue streams, such as through the use of blockchain or the Internet of Things.
Through business model transformation, businesses can create new revenue streams, reduce costs, and increase competitiveness. In turn, this can help businesses achieve sustainable growth and long-term success in their industry.
>>> See more: Steps to convert numbers of the business
Levels of digital transformation are a framework for businesses to understand the different ways they can use technology to improve operations, customer experience, and the overall business model. The three levels of digital transformation are Operations Transformation, Customer Experience Transformation, and Business Model Transformation.
Each level builds on the previous one, and businesses can take any combination of these levels depending on their goals, resources, and industry. However, it is important to note that digital transformation is not a one-time event but a process of innovation, adaptation and continuous improvement. For successful digital transformation, businesses need to understand their goals and objectives, invest in the right technology and tools, build a culture that supports digital transformation, and continuously measure and improve. improve their efforts.
Hope with that information Johnson's Blog If you share, readers will have a better understanding of What are the levels of digital transformation?. The step-by-step digital transformation makes businesses feel more secure and saves a lot of costs and resources during operation.