Digital Transformation isn’t what you think it is
Igor Pauletič / / Sales
Igor Pauletič / / Sales
Let’s face it: most providers that develop software, sell servers or disc arrays, or offer web design services are not able to actually help you digitally transform your business. In most cases, these are actually just traditional IT service providers promoting themselves by riding on a wave of current hype.
Digital transformation entails much more than just digitalizing a process or two and introducing paperless operations. I think it first and foremost entails a key shift in business models and changing the relationships between the participants in a business ecosystem. This shift cannot take place without modern ICT and, of course, the consumer habits developed in this era of mobile and Internet-connected devices.Digital transformation is not just an IT project. At least it shouldn’t be. Click To Tweet
Uber and Airbnb are usually cited as examples of effective digital transformation. Every time I hear this I wonder if they’re truly IT innovators or merely innovative solutions created by people that were first and foremost experts in the activities their two companies specialize in.
One of our own clients is a great example of effective digital transformation in Slovenia. It’s a bank that believed customers most valued quick, easy loan approval when they went looking for a consumer loan. At least for most customers, this was even more important than the loan costs or anything else. So in order to increase its competitive advantage, the bank had to be able to approve consumer loans faster than all its competitors. In order to do that, it had to use a completely different procedure for assessing customer creditworthiness than others were currently using.
The bank saw an opportunity for assessing its potential customers’ creditworthiness by relying on external sources linked to an online app, through which customers can obtain a loan within minutes without consulting a banker. After a few months of marketing this type of online loans, the bank’s share of consumer loans is significantly larger than its share of open transaction accounts, which may indicate that the product has been a success. In the long run, if it turns out that all the loans approved this way are also being paid off, this will definitely be a great example of digital transformation in Slovenia.
At least to me, the above example proves pretty clearly that digital transformation is far more than just an IT-project. At least that wasn’t the essence of this project. In the end, of course, IT helped make it happen, but the first initiative came from an entirely different place. It is true, though, that the people promoting the project had to have very good IT literacy in order to identify this business opportunity in the first place.Digitalization won’t get you wanted results unless you engage in some real conceptual reflection. Click To Tweet
If you turn to FrodX asking how to go about digital transformation, we’ll always suggest using a product/market fit analysis, at least as a first step.
To sum up, digital transformation of your business operations is primarily about seeking out the unique aspects of your product that make it significantly more attractive to the market and target audience. It may be enough for it to be cheaper, something you achieve through a more direct customer relationship that cuts out the middleman. Maybe you have to make it possible for customers to access your product faster and on a self-service basis. Maybe you need to lower the risk associated with making a purchase decision. In any case, you must first analyze or reflect on how you can meet your customers’ needs in a different and more customer-friendly way. Once you know what your uniqueness is, find a partner that will help you implement these ideas. Digitalization will probably be inevitable. But you won’t get the results you want unless you engage in some real conceptual reflection.
P.S. We can help you figure out how you can be the solution your customers are looking for in a unique, customer-friendly way. Send us your particular challenge!