Digital transformation has taken over companies across the globe.
Businesses can either succeed or fail (and quickly, if they don’t innovate.) Digital transformation has allowed many industries to completely pivot, creating new business models and reaching new customers. Digital transformation has improved everything from customer communication and employee hiring to manufacturing and distribution.
Digitized companies can now do things faster and more efficiently than ever before.
As a board member, your job is to see the big picture for your organization. With that in mind, it is crucial that every member of your board is apprised of the importance of digital transformation and is willing to oversee your company’s digital transformation. It is necessary that your board can foster innovative practices and promote taking up new technologies that your workforce can utilize fully.
Here are 4 reasons why your board of directors should champion digital transformation:
- Maximum ROI
In McKinsey Global Survey Results, 75% of those companies surveyed reported that “[they] have yielded some or significant cost reductions and improvements to employee experience…more than two-thirds of respondents say these change efforts increased revenue from existing streams, and more than half cite the creation of new revenue streams [emphasis in the original].”
Think of your marketing strategy. Instead of having an in-house team, you could hire freelancers or outsource various graphic design needs. Instead of paying the salary and benefits of several employees, you could hire people on a per-project basis, greatly reducing your overall costs.
Despite the incurred costs in digitizing your business, it looks as if these investments will begin paying for themselves with long-term cost benefits as well as new revenue streams.
- Improved Workforce
Digitizing your company will inevitably either require you to upskill your workforce and/or attract and hire new talent. Human capital will always supersede technological advances. In McKinsey Global Survey Results, they found that these employee changes resulted in “increasing revenue from existing streams, finding new revenue streams, reducing costs, and improving employee experience.”
- Better Communication
57% of the top-performing organizations surveyed in McKinsey Global Survey Results reported that their senior technology leaders were involved in the digital transformation. Top-performing organizations are also three times more likely to have clear and transparent communication between their IT and business departments.
When considering how to restructure your business in order to accommodate new technologies, it’s clear that regular and transparent communication and collaboration is a proven path for long-term success.
- Greater Ability to Reach a Global Market
Before Amazon, FedEx, and UPS, shipping was the limitation for the major businesses, so businesses relied most on local customers. Today, any company can reach customers around the world if they have a website, efficient shipping services, and customer service support to troubleshoot.
Companies who lag in their digital transformation do so at their peril. Overseeing a digital transformation for your company can be daunting, but to not do so could mean losing out on major profit margins.
Why Company Culture Needs to Be Where Your Board Puts Its Energy
A digital strategy can be difficult to initiate for numerous reasons.
First, there is selecting the right technologies for your business among the slew of those available. This will mean surveying the needs of your customers, discussing openly with your workforce and executive team, assessing what technologies are available or soon to be available for your needs, and pinpointing what processes you want to optimize by bringing in new technology.
Second, there’s organizing how your company will incorporate these new technologies, what skills your company is currently lacking, what skills you’ll need to hire for, etc. This may be the most difficult step because it will involve assessing your workforce’s current skills and deciding how to upskill them, and then coordinating with the Human Resources Department on what skills are needed in the new talent they hire.
Third, there must be communication and collaboration between the board of directors and the executive leadership team, and managers to ensure the technologies are fully utilized. Even with a lot of communication, there can still be a gap between implementing a strategy and seeing it come to fruition.
Despite all of that, your board must be the stable force in the digital transformation process while also not micromanaging. Influencing the company culture can be a way to do that. You can build more flexibility within your company culture by promoting and suggesting new technologies to managers, departments, etc. Encourage teams to explore new options. Get members excited about new offerings.
