Thirty percent of financial service CIOs in 2019 agree on the vital importance of the switch to the digital domain for their company’s relevance, and indeed survival, in the future. Why then, have a mere 12 percent fully embraced the paradigm shift in responsiveness and adaptability? Let’s take a look at what this means for the future of business.
What is digital transformation?
It might be easier at first to talk about what digital transformation is not. It’s not “business as usual,” the traditional model that around 25 percent of financial services organizations still use. It’s also not defined by businesses whose digital aspirations are limited to optimization of existing processes and practices, yielding only limited potential for additional value creation.
Even companies that view themselves as “fast followers” or “early adopters” of digital technologies may not be digital leading companies. If they continue to stick with their existing business model, while implementing some marginal digital changes without a consistent plan, they will still miss the mark in the transformation process.
We are at an interesting turning point for business and industry. Digital transformation is a complete game changer. That’s why the word “disruptor” has crept into common usage when talking about the digital implications ahead.
What’s required at this point is not a gradual shift to all things digital. A real paradigm shift is needed and there’s no time to waste. This change is as immediate and radical as the invention of the wheel.
Why is digital transformation important for all businesses?
Digital transformation is not a future trend that needs to be watched and planned for. It’s “Go Time” on these protocols. The shift is not characterized by the way a company does business. It connects businesses and changes the way they do business together.
It may not even be a preference. If I’ve got a digitally leading company, and your company is using a model from 30 years ago, our processes may be incompatible with each other. I may not have a choice but to look for one of your competitors that have gone digital. It just won’t be possible for digital leaders to conduct business with those who have decided to cling to the status quo.
What action steps must you take to become a digital business leader and ensure your company’s relevance?
- People – Have you been hesitant to include millennials and younger workers into management positions and succession plans? If so, you’re doing this to your company’s detriment. These are the people that speak the digital language fluently. To embrace technology, you must make this shift in employees and be open to their ideas.
- Infrastructure – This should be realized without much explanation. Internet of Things (IoT) and machine-to-machine technologies allow the digital transformation to take place. For example, new developments such as 3D printers and cloud computing are used by digital leaders.
- Processes – With new people, new protocols and infrastructure, processes inevitably change. All must be evaluated and converted to digital leading best practices.
What happens if you decide to keep doing things the way you have for years?
You may be asking why this change is so important. After all, your current systems have worked successfully for years. There’s no sugar coating it, those days are over. If you choose not to accept digital transformation and make the necessary changes to embrace it… in short order, you will start to lose your ability to compete for business in today’s and future markets. You will limit the life of your business and its ability to maintain growth.
Staying in your comfort zone and sticking to traditional models may give you a sense of security, but it won’t be a lasting comfort.