4 Digital Transformation Myths Businesses Should Take Note Of

The term digital transformation is mainly synonymous with radical disruption of businesses, including enormous investments in technology, a full-fledged shift from a physical to a virtual world, and maybe even taking over a tech startup. Traditionally run manufacturing processes, supply channels, and business models must be given a 360-degree facelift. Indeed, such a wholesale turnaround is sometimes the need of the hour. 

That said, for most businesses, digital transformation doesn’t mean outright disruption. On the contrary, it means undertaking incremental steps to serve customer needs. It means physical stores and online stores need to work in unison. It means following a people-centric model to ensure the success of your digital transformation process. 

This article attempts to dispel widespread misconceptions about digital transformation and clarifies how companies should react to these myths.

Myth 1: A total turnaround in the product/service value  proposition 

Reality: Typically, it involves a step-by-step approach using digital tools effectively to meet client needs

HBR’s 10 MustReads, “On Leading Digital Transformation” authors Nathan Furr and Andrew Shipilov state in their definitive article “Digital Doesn’t Have to Be Disruptive” that some businesses believe to achieve the digital transformation they need to reinvent their company’s value proposition, or risk an existential threat to their business.

While doing so, many companies, even though they might just be starting with their digital transformation process, look for high-tech products or platforms to serve their customers’ needs. Sure, some companies might succeed; however, the customer needs aren’t met by most companies despite the digital leap. The challenge is to find a way to meet those needs using apt digital tools that resonate with the customers. Even traditional companies that use digital tools to meet customers’ needs in a better fashion have the edge over digital entrants. 

Take the case of G7, a Paris-based traditional taxi company, founded in 1905 and known for its rude drivers. When the company faced a threat from Uber, it developed an app that allowed customers to book a taxi. The app offers sharing, regular cab, green cab, VIP, van, and more. However, it’s different from Uber in important ways: it’s got better-trained drivers; cleaner cars; and cars that can be pre-booked for the exact time. More than anything, G7’s prices are constant, unlike Uber’s. Uber uses surge pricing. In other words, prices have temporarily increased due to increased demand and a shorter supply of vehicles. This form of dynamic pricing helps Uber to multiply their fares. 

Nevertheless, one thing is for sure: Uber’s arrival forced taxi companies to step up their services and even organize etiquette lessons for drivers; however, one can’t argue that it led to overhauling the G7’s value proposition.   

Or, to put it another way, the reason your company exists has nothing to do with digital transformation. Its sole purpose is to find technology to help you assist customers in better managing their needs. Like G7, your company can also keep serving customer needs even in the digital era by leveraging the right digital tools. 

Myth 2: Digital will eliminate physical 

Reality: Digital and physical need to work hand-in-hand 

Undoubtedly, going digital makes it possible to do away with expensive physical infrastructure and ineffective intermediates. That said, digital can’t replace physical completely. Retailers are attempting to find methods to combine physical and digital tools to maximize each.

Galeries Lafayette, the biggest department store chain in Europe, understands very clearly that only a physical store can help build an emotional bond with the customer, while digital helps better understand the customer’s needs. At its flagship store, the employees are equipped with tablets. When the customer, after thorough online searches, reaches the store, the tablet allows the employees to quickly pursue the online catalog and familiarize themselves with the product the customer is looking for. 

Customers value physical stores because they can touch and feel the products. They can find various items online and run a trial at the physical store. They can even buy products online and pick them up at the store.    

Physical stores going the digital way is one thing. Even digital natives are taking the physical route to building emotional connections with their customers. Bonobos, an upscale, e-commerce-driven apparel subsidiary of Walmart, has opened physical stores to help customers try on clothes. 

These stores use technology to take advantage of data, drive cost savings, and meet demands that digital technology lacks, such as fostering emotional relationships and addressing the difficulties of clothes or eyewear fitting.

Myth 3: Digital transformation is not for small businesses 

Reality: Business transformation is indispensable for businesses of all sizes 

For organizations of all shapes and sizes to remain relevant and competitive in today’s market, digital transformation is essential. However, it could sound like a daunting task for a small business with a tight budget.

However, small businesses simply cannot shy away from implementing the appropriate technologies in their companies, as relevant technologies increase productivity, decrease expenses, enhance the customer experience, and eventually raise profits.

Multiple technologies such as mobile apps, automation, machine learning, and more help customers get what they want. So, customers prefer to purchase products or services from brands that offer digital customer experiences and cater to their demands.  

Not surprisingly, more and more businesses are considering implementing cloud technology in their organizations. As hybrid and flexible working options grow in popularity, cloud-based solutions make it simple to hire workers who prefer to clock in remotely or work outside regular office hours, opening up endless opportunities for smaller businesses.

Myth 4: Digital transformation is technology-centric

Reality: Digital transformation is people-centric  

The term “digital transformation” is automatically linked to technology. In a way, it’s not wrong as technology adoption basically ensures efficient returns and a greater degree of customer intimacy. However, an issue arises when employees are not yet ready for technology changes, and concrete goals are not in place. Implementing digital transformation in such worst-case scenarios will only amplify the existing issues.

This is where adopting the people-centric formula of digital transformation comes in. This happens when employees are taken into confidence and made to understand that digital transformation is an opportunity for them to scale up their skill set, which, in turn, would make them suitable for future jobs. (And that any fear about AI replacing humans is simply unfounded.) 

Nevertheless, managers must follow an inside-out process to implement a people-centric approach. For that, the employees need to evaluate their contributions to the organization and connect their skills with the elements of the digital transformation process. Using an AI tool to enhance a salesperson’s efforts is becoming increasingly common. For instance, AI tools are wired to suggest which customers to call, which to avoid, when to call, what to say during the call, and so on. Some tools even have a gamification element, making the process more interesting for the salespeople. 

In addition to a people-centric approach, the next best thing businesses can do is to rope staff and other customer-facing executives to suggest different digital tools that could support them in their day-to-day operations. This is important because, unlike consultants, employees have better knowledge about the different business functions and the gaps that could be plugged in using various digital tools. Using insider knowledge is better than hiring consultants from outside who might offer only off-the-shelf solutions.  

Final Thoughts

Digital transformation is an ongoing process. Though the companies don’t have to adopt an all-or-nothing approach, small, incremental steps are the order of the day. For that matter, small businesses should leverage technology in whatever way they can to manage customer needs better. If not, they will lose out on the competition. Additionally, physical and digital stores must work together to ensure higher customer satisfaction. People should be central to your digital transformation initiatives and not technology. Always remember that people run businesses; technology is just there to assist you.