Digital Transformation and What It Means For Smaller Organizations

“In 2022, digital transformation will take twice as long & cost 2X more than anticipated.” – Gartner Inc.

Digital transformation is a service offering near and dear to the hearts of all of us at Bakker Business Services for a straightforward reason: It’s a business initiative perfectly aligned with our company vision.  When it comes to the resource allocation and tactical elements of how a business can best help its team take back their time and thrive in their mission, digital transformation projects are a top-notch use of company resources.

Let’s start, however, by defining broadly what digital transformation is.  It’s going to look different in almost every organization, as digital transformation not only affects processes – it also affects and is influenced by company culture.  When it comes to defining such a broad-sweeping term, perhaps analyst Brian Solis’ holistic definition is the best starting point:

“Digital transformation implies the realignment of, or new investment in, technology, business models, and processes to drive new value for customers and employees.”

That last bit is of particular importance because building efficiencies for employees is key to making more room for innovation and holding space for the important (but not always urgent) work that pushes them further toward their missions.

Another definition that does a great job capturing the essence of digital transformation is this one from the blog of The Enterpriser’s Project:

“Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.” 

In short, digital transformation is equally about building value and escaping inertia.  We think that when it comes to making an internal business case for any new initiative, it’s tough to imagine two more compelling outcomes.  Before we dig deeper into these two excellent reasons for undertaking a digital transformation exercise, let’s quickly have a look at the difference between digitization and digital transformation.

Say what you will about 2020 with its many sweeping and occasionally crushing new challenges, but it has spurred many an organization into action.  Chiefly among these adaptive actions have been digitization and digital transformation undertakings.  To illustrate the difference between the two, let’s look at a friend’s business, Link Greenhouses.

Digitization vs. Digital Transformation

Owner/operator and personal friend, Lisa is a bit of a technology Grinch, to say the least.  In fact, she is the last person you would ever expect to engage with technology, and she rather resents (in the most good-natured way possible) the need to carry a cell phone to operate her business.  Several years ago, however, she realized that there was some leverage to be had through allowing a few new tactics into the greenhouse…

Digitization: Lisa realized that through developing a following on social media and occasionally sending emails to her customer base using an inexpensive email automation platform, she could extract better results from her marketing and advertising efforts than what she was previously returning from traditional channels.  Effectively, she had digitized her marketing and advertising, but her business operations otherwise remained precisely the same.  The new channels drove physical traffic to her retail location, and customers came into the store to make their selections and pay for their orders.

Digital Transformation: In early 2020, as governments began enacting quarantine measures, there was some question of how Lisa would be able to operate her retail business at all.  To hedge against the possibility of forced closure, Lisa commissioned an online store where customers could access all of the same products and even transact payments.  The customers would then pull into numbered spaces in her parking lot, and masked staff members would place the orders into the customer’s vehicle trunks, completing the 100% touchless transaction.  All communications, including changes to orders, product returns/exchanges, took place through the shopping platform and email channels.  This was the digital transformation of Lisa’s farm stand business: she had not just transformed specific tactics, but instead, she transformed the entire way in which the business operated and delivered value to customers.

The above is an intentionally simple example meant to dispel two of the top fallacies about digital transformation.  The first is, “we’re too small to benefit from that,” and the second one is, “we can continue not to prioritize this.”  Lisa would not mind us stating that she is the last person on Earth we ever expected to undertake such a project, but she would also share that she now has no interest in returning to the old model.

Why Digital Transformation?

Let’s get back to why an organization would undertake a digital transformation project.  Like any value-building business initiative, such a project requires an investment of resources – namely time and money.  This brings us to a critical reason for this work – it’s about disrupting inertia.

Inertia can look like many things, but in most small businesses, it often looks like critical, undocumented processes with a single point of failure, such as a legacy team member.  Or perhaps it’s part of your path to purchase that creates a bit of friction for customers or donors, but they have traditionally accepted it as the cost of doing business.  Maybe it looks like a bunch of dead inventory because nobody has taken the time to capture or study data that would illustrate spikes in demand.  The important point is simply this; “that’s the way we’ve always done it” is a phrase that should regularly be examined through a first-principles lens that asks “why?” and “could we do something smarter?”

As much as digital transformation is more about shedding outdated processes and legacy technology than it is about adopting new tech, it’s also about enabling innovation. Here’s a great visual illustration of why an organization of any size should think deeply about how they could benefit from digital transformation:

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In one of our recent brain trust sessions, we heard some incredible stories of how not-for-profits have leveraged digitization and sometimes even gone full digital transformation during 2020. Here are some of the examples:

Transforming Donor/Stakeholder Engagement
At the heart of digital is the experience that everyone involved has with an organization, from team members to donors, to the communities they serve.

Greater Collaboration Across Departments
As 2020 caused so many teams to move to a 100% distributed model, digital transformation enabled unity and collaboration throughout those teams.  Organizational culture has a significant role in making it work, but workers still need the right tools at the end of the day.

Improved Agility and Innovation
So many of our brain trust partners shared inspiring stories of innovation, and at the heart of many of their pivots, there was the enabling force of their tech stack.  We’re big believers that process should always precede technology, but the tech makes an excellent lever once an organization has its strategy in place.

How To Get Started

Spotting areas of opportunity in your organization is often a matter of asking simple questions or examining legacy ways of doing things.  Start by thinking about places that your team or your customers get stuck in the muck: where do prospects abandon your sales/donation processes, where do your team members burn loads of time on things they dislike doing?  What are the elements of doing business with your organization that you consider “necessary evils” but still create disruptive friction with prospects and customers alike?

Funny enough, legacy processes aren’t usually the only guilty party. Legacy technology can also be a drain that you’ve become so accustomed to organizationally that you don’t even notice anymore that it’s draining.  Two things to watch for:

  1. Outdated software that requires special maintenance costing you time and/or money. An example might be a proprietary solution that requires an ancient operating system for it to function or old, on-premise installs of enterprise solutions that have evolved into SaaS models, but your organization didn’t make the leap to the cloud.
  2. Software or other technology solutions that were purchased that have way more firepower than what you needed, just so you could get specific features. Look for newer low cost, specialized subscription solutions.

Want to dig deeper?  We’ve just published a brand-new case study about a digital transformation project our team recently delivered.  Click here to download Enabling Donor Engagement & Sticking to The Mission: A Digital Transformation Case Study.

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