Digital Transformation

Digital transformation is the process of using advancements in technology to continuously evaluate and:

• Empower employees
• Transform products and services
• Streamline Operations
• Exceed customer expectations:

Figure 1.2 – Pillars of digital transformation

There are several definitions available on the internet, but the one that I mentioned here has the essence of what most organizations desire to do through their digital transformation endeavors.

Each of the pillars that form the bedrock of any digital transformation has significance, and one cannot be deemed more important than the other. However, depending on the maturity of the organization and market conditions, one of the pillars might need to be prioritized over the other by the organization's leaders.

One of the most challenging and crucial portions of this digital transformation is to energize and empower your workforce to not only participate but also lead and accelerate this transformation at grassroots level. Let's take a closer look at how employees can be empowered on this mission.

Empower employees

How do you empower employees of an organization to lead and accelerate the digital transformation journey? This empowerment comes from making employees contribute directly to the digital transformation and making them equal partners in celebrating the wins and dissecting the losses.

About 10-15 years ago, a frontline worker or information worker would at best be providing a set of requirements to the business analyst, who would then draft hundreds of pages of Business Requirements Documents (BRDs). These BRDs would then get passed on to the Information Technology (IT) department to build the next set or a new version of a Line of Business (LOB) application. LOB apps are built or procured from third-party vendors and their purpose is to solve typical business problems within an organization or within an industry. Examples include a talent management app for HR, invoice approval or tax calculation apps for finance, and an expense reporting app for all employees. During the building process, there will be various sub-phases of planning, design, development, and testing, before the application is ready for consumption. By the time the application is ready for production use, it is already too late, because the next version, and most of the ground assumptions and principles, would have changed or evolved, such as the number of users, scenarios, stakeholders, and business goals. There is a heavy price to be paid for this failure and, evidently, the pace of transformation suffers a great deal.

Another point worth noting is that millennials are a significant portion of the workforce today, and that percentage is going to increase in the upcoming years. What does this mean? This population is much more ambitious and technically literate, and they are going to be using technology both at work and in their personal lives. As part of engaging with this young and growing workforce every day, we realize that a majority of this new workforce is motivated to spend less time doing manual, labor-intensive, repetitive work and wants to focus more on adding value to the organization in much more meaningful ways. This is a favorable situation for organizations to have. It would be perilous for organizations to not have the right strategy, nor invest in the right set of technology to tap into this vast workforce and use them to transform their businesses.

Additionally, there is increased pressure for every one of us to start learning to code, including kids in school (https://www.nytimes.com/2017/06/27/technology/education-partovi-computer-science-coding-apple-microsoft.html). There are obvious benefits of learning to code, such as helping us to boost creativity and problem-solving abilities, and increasing professional advancement opportunities. However, it cannot be refuted that not everybody is wired to be an excellent coder and loves doing this all the time! It cannot be denied that some of the most creative minds in technology have not been the best or greatest coders, but they were always driven by their passion to innovate and make a change, a very good example being the legendary Steve Jobs. This book is going to be of immense help for such innovators who wouldn't like to spend a lot of time learning to code in a new language before bringing their ideas to fruition.

Anybody can build an app and automate without formal knowledge of coding; this is where the promise of this new low-code/no-code platform that is now available with Microsoft Teams and Microsoft Dataverse for Teams comes into play. This enables technology to meet people where they are, rather than asking them to go through a massive learning curve of learning to code in a certain language before deciding to solve a business problem. Thus, we will be empowering everyone to build low-code/no-code applications and other digital solutions to make a change, whether they are an information worker within an organization, a teacher in an elementary school, an analyst in an investment bank, a health professional in a hospital, a volunteer at a non-profit organization, or whoever. In the next few chapters, you will start to appreciate this claim as you start putting your ideas into action.

Meanwhile, let's delve into the remaining three aspects of achieving digital transformation.

Transform Products and services

A classic example to explain how and why products and services need digital transformation is the case of Netflix, the online streaming giant that we all are familiar with today. In 1997, Netflix was founded to sell and rent DVDs by mail, but changed to a subscription-based streaming service and also plays an active role in the production and distribution of its own content. While Netflix has become one of the largest entertainment companies that we all know of, many of its competitors, who started with the same business of renting out DVDs and VHS tapes, have now become extinct.

With the advent of broadband, Netflix was able to use the benefits of technology – advancements in internet streaming speed whereby consumers stopped measuring their internet speed in kbps (during the era of dial-up modems) and now measure their internet speeds in Mbps and even Gbps, with some ISPs using fiber optics. Netflix saw the opportunity to transform its business into a streaming service. There are several such examples where businesses have transformed their products or services by using advancements in technology.

The most important reason why other businesses and organizations have perished is due to their lack of willingness to transform their products and offerings. It is equally encouraging to see how some other organizations, and even certain classes of industries, have also come into being because of doing exactly the opposite. Digital technology is the foundation of their existence, and they never stop to evaluate and transform their services. The ride-sharing industry (such as Uber and Lyft) and home-sharing services (such as Airbnb and Vrbo) are all examples of this. A few more examples can be found in industries that are seeing this digital transition of their products and services, such as in-home fitness, gaming, and educational and professional development. There is a shift to provide products and services via a subscription model and delivered to your home either physically or virtually through the internet.

While these are some radical changes in industries that sell services, there have been some massive strides made by organizations selling products. With the advent of IoT devices, most of the products sold these days, ranging from home appliances such as a connected refrigerator or a smart TV, all the way to domestic and fighter aircraft, are all capable of generating enough telemetry to self-diagnose issues. This transforms the product from being an issue or defective into a product that can self-diagnose and heal these issues. This helps organizations build trust with their customers when it comes to the reliability and serviceability of these products. In the case of connected appliances, many appliance manufacturers get telemetry signals through IoT devices planted in them and can detect signals that tell them it's time to replace the air filter or water filter in a smart refrigerator and then offer value-added services such as sending replacement filters for a monthly subscription fee.

We have seen how products and services can be transformed by using the benefits of digital evolution to deliver a stellar customer experience and become a leader in the industry. We have also seen organizations carving out a net new niche industry.

Next, let's look at how digital transformation is applied to the backbone of any organization – its business operations, which power the organization to deliver its products and services to the customers on time, with the desired quality.

Streamline Operations

All sorts of processes and activities that take place within an organization that help it to deliver products or services are collectively referred to here as operations (sometimes referred to as business operations). Most organizations have well-defined processes or standard operating procedures to carry out day-to-day activities. As the maturity of the organization increases, so does the efficiency of these processes and procedures. However, while these models help to make the existing processes efficient, it is necessary to focus on partial or total transformation.

Going back to the example of 5G-connected cows, it might look and sound radical at the beginning, but it is becoming increasingly evident that hiring humans for mundane and repetitive tasks that don't need cognitive skills will become increasingly difficult due to what we discussed about the characteristics of the new evolving workforce. As technology keeps breaking barriers, it will make inroads into a lot of such legacy practices, processes, and procedures, even if they have managed to survive unchallenged for so many years.

One of the most elementary processes that happens in almost every organization dealing with products and services is the process of maintaining an inventory of raw materials or finished products or services being rendered on a day-to-day basis. There is a lot of manual effort involved here, and the process is often error-prone due to human involvement. To cite an example, a manufacturing firm that makes machines or cars will have a lot of components arriving as raw materials. If all the parts need to go through a quality assurance process and meet specifications and standards, it is not possible for humans to scale and ensure that all the raw materials meet the quality bar and even regulatory needs. This is where artificial intelligence (AI) and machine learning can be used to process large volumes of inspections. Cobots – collaborative robots – can also further augment human labor rather than replace it. By taking on dangerous, physically strenuous, and repetitive tasks, these new apps, bots, and automations are making factories safer and more efficient for employees.

To give a simpler relatable example, as a modern information worker, you must have seen organizations requiring employees to digitize documents such as receipts or manually type in massive amounts of data from invoices. This takes several hours of manual work, and it is often error-prone. However, in just a couple of hours, using the receipt processing capabilities of AI Builder, anybody can build an app that will automate this process and save several productive hours for the organization.

Important Note

If you want to learn more about AI Builder and prebuilt receipt processing, please see this link: https://docs.microsoft.com/en-us/ai-builder/prebuilt-receipt-processing.

Operations is a crucial function in any organization and, often, a new start-up or a developing organization struggles to streamline their operations, often neglecting the need for transformation of this vital backbone, often to their peril.

Now, let's look at the most important aspect, the foundation of any organization: happy customers! In the next section, let's see how digital transformation is shaping the future of customer experience and helping some organizations to embrace a customer-obsessed culture.

Exceed Customer expectations

There is a tremendous opportunity to influence customer expectations in the different phases of the customer life cycle, such as marketing, sales, acquisition, retaining, and servicing. While each of these processes represents an opportunity to use digital technology and improve the customer experience, given the purpose of this book, let's focus on a couple of aspects that will demonstrate the value of applying digital transformation to customer-related processes and thereby exceed customer expectations.

Organizations today are increasingly sensitive to their brand's reputation, especially on social media. Besides just targeting random folks for your marketing campaign, it is equally important to connect with each of these customers individually to build a long-term relationship. JetBlue Airways (jetBlue) is a major American airline that does a stellar job of providing a wonderful customer experience when dealing with complaints. On any given day, you will see this organization's Twitter handle trying to improve customer experience, whether related to a delay in takeoff, switching seats, or changing travel dates. Besides addressing customer issues, this Twitter-based help desk is also helping to build the brand's reputation as a customer-friendly organization, given the quick responses and near real-time resolution of customer issues. This is a very good representation of digital transformation applied to marketing, and it can also be categorized as the digital transformation of the customer service (servicing) life cycle too.

Let's take an example of an airline passenger who is stranded at an airport due to overbooking. The customer tries to reach the customer support department of the company through which the booking was done, and at least the first 5 to 10 minutes are lost in sharing basic details, such as the booking reference. Hopefully, after this, the customer service agent can resolve the case quickly and rebook this passenger. That would be an ideal situation, assuming you can get through to a customer service agent who understands what needs to be done. If you analyze this experience and how much time and money is being spent by the agent and the customer, then it becomes obvious that there is a great opportunity to improve this process. Therefore, many organizations have deployed some sort of automated voice assistant for phone calls, or chat bots on their sites, to deal with this. And with these digital assistants or bots, once you pass your booking reference number, it can pull all the information about the customer, provide all the information, and even re-book the customer using the customer's preferred date.

Besides providing huge savings for the booking/airline companies by cutting down the time spent by customer service agents on these calls, these digital assistants/bots also help to improve customer service expectations. Besides making drastic improvements to KPIs such as average response time, customer service cost, and first call resolution, this sort of automation helps bolster customer confidence in the organization and brand retention, which will be reflected in CSAT/NPS scores over the course of time.

Thus, the path of digital transformation rests on these four pillars, and you should now be in a position to appreciate what digital transformation is and why it is essential for the future existence of every organization, whether they are corporations, the public sector, health, the education sector, or anything else.

We are living in interesting times due to the COVID-19 pandemic, and it has helped us to learn and validate the benefits of digital transformation that some organizations were able to reap while others just perished. Businesses are connected and dependent on each other more than ever, customers are connected, and the velocity of change for their customers, their industry, and their supply chains is unprecedented. There is a level of agility that is required, and this can only be achieved by digital transformation.

Important Note

Many organizations, some your favorite brands, had to file bankruptcy and go out of business overnight. Here is a list of some of these organizations: https://www.forbes.com/sites/hanktucker/2020/05/03/coronavirus-bankruptcy-tracker-these-major-companies-are-failing-amid-the-shutdown.

It is abundantly clear that the digital transformation of the four pillars of your organization mentioned previously is imminent, and it has become more urgent than a "good to have" business objective, due to the changing economic conditions of current times.

Two of the most important factors that can contribute to the pace of this transformation are as follows:

• Availability of talent (skilled employees) to carry out this transformation
• Pace of transformation

This is where the role of low-code/no-code development platforms comes to the fore.