Misunderstanding the concept of digital transformation is quite common. At first glance, it seems like a purely technological feat. However, the reality is much more complex. Digital transformation is not about technology – it’s about business.
It doesn’t matter whether it’s a new microwave, a new machine or a new employee – any novelty you bring into the workplace is going to affect the way things are done. Novelties change how people behave, slightly or drastically. Considering this, it’s clear that a new approach to essential business processes has to come as quite a shock to everybody involved.
When we talk about digital transformation, we don’t only talk about the shiny new software that makes everything faster and easier. We also talk about crucial changes to the core of any business – the company’s culture. Digital transformation is the rite of passage from the good, old ways of thinking to the brand new, digital mindset. Everybody is involved – not only your IT team.
Digital transformation does start with the integration of your personalized Digital Service Management platform. However, it doesn’t end there. It transforms the very soul of your business – your company’s culture. This includes the way your teams work, your approach to risk and change, and ultimately, your customer experience.
Executing something like this is not easy. However, the consequences of not doing it are harder. One by one, companies from the financial service industry (FSI) get replaced by fresh new faces because they didn’t keep up with the times. According to research published by Deloitte Center for Financial Services, 90% of financial industry professionals think that digital technologies are disrupting the industry, yet only 46% see their organizations adequately preparing for digital disruption. This is worrying news, as companies in the field of financial service must be on top of their game to earn and keep the trust of their customers.
Decision making is an area that withstands the biggest changes in the digital age. With tightening regulations regarding transparency of the decision-making process, financial service industry companies feel an increasing pressure to stay away from making instinctive decisions.
However, with the proper tools, there’s a foolproof solution. With properly executed digitalization, the company can start generating and analyzing heaps of data in incredible detail, in the matter of seconds. Whether it’s customer feedback, employee efficiency or response to a new product, the data that digitalization brings along is truly priceless. Used in the right way, this data can become the most valuable asset in the decision making process. Not only can it be used to bring decisions that are based on hard facts, but it can also reveal criteria that wasn’t even considered before. Taking company-generated data into the equation ends up with double benefits: the data-driven approach results in safer, informed decisions, and automation of repeating decisions becomes a major time-saver. Still, only 38% of Deloitte’s survey respondents thought their organizations brought decisions based on data.
A well-executed digital transformation is the most visible in relationships. Whether that’s among coworkers, stakeholders or customers, the quality of collaboration is bound to skyrocket.
The change starts with the way employees interact. Per legacy, the FSI companies prefer a siloed working style. These are characterized by fixed team structures and well-defined roles. However, the digital era requires more flexibility, and a switch to a collaborative work style. These are seen in team structures and dynamic skill sets, both of which can be adapted to suit particular business needs. The results of such fluid work environment are evident in both performance and employee happiness. In fact, Deloitte researchers found that employees are more likely to stick around for a longer time in companies with a collaborative work style, compared to those working in siloed FSI firms.
On the other hand, one of the greatest issues of digitalization in the financial industry is the democratization of information. As the way information is shared and accessed changes, data becomes more readily available to stakeholders from customers to competitors. This, of course, raises concerns as information security stays a crucial part of the financial industry. Making sure that adequate planning and security measures get implemented in your digital strategy is a prerequisite for success.
That being said, organizing data access and decision rights properly can be a segue to higher efficiency. With better collaboration, each individual understands the objectives clearly, finally aligning goals across the company. Once internal communication is in harmony, customers start to feel it too – their interactions with the company become more resonant and genuine.
Performing your digitalization strategy is not only about the technology. The transformation needs to be deeply rooted and meticulous. It has the power to affect your business inside and out, reforming your identity and culture. Digital transformation is an adaptation of your collective mindset to the new age, and it results in higher engagement, easier collaboration and more data-driven decisions. Ultimately, it resonates on the quality of your communication with your customers, driving customer experience. Digital transformation done right is the best investment that you can make today for a successful tomorrow.
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