Businesses have built growth strategies on digitisation and digital transformation for many years now. That’s because they realised that digitalisation could help businesses reach their target market more quickly and effectively and build a solid customer base, while efficient processes and automated workflows enable businesses to diversify and expand.
Indeed, the term ‘digital transformation’ was originally created to describe how digital technology could ignite growth by disrupting the marketplace through the digitisation of non-digital products.
During the pandemic, businesses prioritised digital transformation initiatives as teams transitioned to remote/hybrid working and customers purchased goods and services online. And now, in the post-pandemic world of work – as we continue to reinvent how we do business and connect with each other – digital transformation is still a buzzword.
Yet everywhere you look, every business has some kind of digital footprint – whether that’s a website, mobile app or social media platform. Because of this, I believe that the term ‘digital transformation’ is no longer relevant – ambitious business owners should no longer talk about it. Instead, we must talk about ‘digital evolution’ and adopt an evolutionary mindset.
What is digital evolution?
Digital evolution is the continued adoption and refinement of new and emerging technologies to improve business efficiency, reduce costs, overtake competitors, and achieve better outcomes.
According to Harvard Business Review, of the annual $1.3 trillion spent on ‘digital transformation’ pre-pandemic, an estimated $900 billion was wasted. When the pandemic hit, and in full crisis mode, many companies increased digital spending to revolutionise their digital offering, boost their online presence, and simply survive. But without robust long-term strategies, many of these companies are now stuck.
We see it all the time at Vidatec. For example, a medium-sized leisure and tourism company invested in a website and online booking system, however progress on this has stalled and booking numbers have remained stagnant. With digital evolution, the company could use advanced chatbots and automated workflows to enable customers to book trips, find information and quickly resolve any queries.
This could be combined with analytics and machine learning to gain customer insights and tailor marketing campaigns for a more personalised customer experience. The result of this is likely to be increased revenue, improved margins, as well as an optimised back end of the website which frees up staff time for innovation.
A key benefit of digital evolution for an SME such as this looking to rapidly scale is that it’s generally more cost-effective because you’re evolving an existing programme, rather than scrapping it and starting again. This approach also tends to be a better use of employee time and capacity, with the added benefit that your people are free to focus on the next phase of innovation (as in the case above). This is especially important in a cost-of-living crisis when budget-holders are being driven to ‘sweating assets’.
How to practice digital evolution
A digital evolution mindset requires the engagement and buy-in of the relevant stakeholders in your organisation. You cannot have – nor can you sustain – evolution in a bubble. So, ensure any plans are underpinned with appropriate training and development opportunities and supported by a robust communications and engagement plan.
It’s also important to understand that digital evolution requires a different financial mindset to transformation.
It’s typical to have significant upfront investment for digital transformation – but the danger here is that money is spent quickly and easily because of the hunger to deliver big, and fast. Digital evolution requires a mindset shift toward regular, sustainable long-term investment, over a period of time to create meaningful improvements.
A good approach is to ensure a clear and concise business case against each item on your roadmap. What will be the result of the feature or capability? What market, customer or stakeholder benefits will it unlock? How long will it take to realise this benefit? These questions will support your prioritisation, ensuring focused spend where it delivers the most benefit.
A digital ecosystem
The single best way to practice digital evolution and maximise your investment is to break down any silos and manage as a digital ecosystem; because in a digital ecosystem, all information technology resources are interconnected and function together in harmony, as a single unit.
In moving from a siloed, singular to a connected, ongoing approach you inevitably move from digital transformation to digital evolution. Indeed, savvy business leaders everywhere are increasingly seeing digital evolution as the way to maintain the change first initiated by Covid-19, and continue to compete, grow, and succeed.
Companies must now shift their corporate mindset away from the outdated concept of digital transformation. Digital evolution will ensure businesses can continue to evolve at a steady and sustainable pace in service of their customers and with a people-centred approach.
Greig Johnston is CEO at Vidatec and a former CTO. He has worked in the technology sector for over 25-years, buying and selling technology services. He specialises in helping businesses of all sizes develop digital strategies that deliver help technology leaders across many sectors mitigate risk, reduce cost and increase revenues.