A Quick Guide to Business Digitalization

We’ve all heard of digitalization and think it’s happening naturally. But the truth is, some companies still struggle with this. The usual challenge is the awareness of how it can affect their businesses and why is it so important to digitalize their processes.

In this article, we will cover this three major parts:

• what digitalizing business processes even means
• what are all the things that can (and should) be digitalized
• the general steps in the digitalization of processes

What is digitalization?

In literature, we have various definitions of digitalization. One of them is this:

Digitalization is the integration of digital technologies into everyday life through the digitization of everything that can be digitized (Encyclopedia of Information Science and Technology).

This definition differentiates digitization from digitalization, and one other commonly used term in this context is digital transformation. These are all related terms but they don’t mean the same thing. Let’s make a quick distinction:

• Digitization — changing data and information from analog to digital
• Digitalization — changing business processes from analog to digital and gaining additional value for doing so
• Digital transformation — reshaping processes as a result of digitalization, making them different than before because digitalization allows us to

Let’s take the example of buying and watching movies at home. Firstly, people went to video stores to buy or borrow movies and watch them at home. Then, with the wide usage of the internet, those movies were transferred online (this is digitization) and you could download them, so there was no need to go to the store which saved your time (this is an example of digitalization). This, along with the advances in technology, led to the digital transformation of this process — you no longer need to download the movie (and that saves you your storage space) and the movie is just one click away — you can watch it directly on the platform.

Another transformational process connected to this example is the change in the payment process: from pay-to-view to a subscription model with a monthly fee for unlimited movies whenever you want it.

So now that we learned what these concepts refer to, you might be thinking “Okay, but why are we talking about digitalization when digital transformation is obviously something we should obviously go for?”

Well, the answer is simple — digitalization is often something you could start doing today with the right tools and knowledge. Dgital transformation is usually one step after digitalization and requires a bit of research, testing and time. So we’re starting simple, with digitalization that comes after digitizing your data and information.

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What can be digitalized?

The thing is, with today’s technology and tools you can probably digitalize anything that comes to your mind, but let’s stick with the most common examples.

Digitalization of data

This is probably the most used form of digitalization and is widely spread for a long time. The best examples are:

• various databases (customers, vendors, products, people…)
• digitalized invoices
• forms
• interviews, surveys and polls
• signatures and approvals
• appointments

And all sorts of other data that can be collected and used digitally for better and faster usage.

Converting data to digital form for more efficiency is probably the oldest example of digitalization in business. Its great power lies in cloud storage. Cloud storages remove the necessity of owning external discs or big computer storage and remove the risks of losing data.

Digitalization of knowledge

One thing I’m personally the most excited about is the digitalization of knowledge. Today, knowledge is already widely spread all over the internet in various forms — audio, video, written, etc. The COVID-19 crisis made the transition to digital knowledge much faster and more available than ever, and today you can get your master’s degree online from a college on the other side of the world. It’s not even something unusual. Also, the digitalization of knowledge brings great value to its users, but also to its producers. There is a big pool of consumers to spread the knowledge, brand and overall business much faster and on a much bigger scale.

Digitalization of communication

Also something that exploded in the COVID-19 crisis, digitalizing communication is something a lot of us cannot live without anymore. Why? Simply because of how fast you can transfer information to someone and get a response, or even see a person who is 2000 kilometers away from you. This is a key point that enables remote working and simplifies communication, resulting in better digitalization of business processes.

Digitalization of business processes

If you’re like me, you probably like taking notes whenever possible or you’ll just forget something important. Well, switching from taking notes on paper to some of the vast number od note-taking tools is a game changer on a personal, but also on a professional level. Imagine all the papers surrounding you at your work desk just gone and transferred to the cloud storage. Amazing, right? Well, note-taking is just a fraction of what you can digitalize and make your life easier. Let’s list others:

• Day-to-day tasks
• to-do lists
• project planning and executing
• collaboration
• meetings…

And the list can go on and on.

Digitalization of customer experience

For a company, there is no point in doing business if your customers aren’t happy or not using your products or services. Well, digitalization is enabling customer experience to improve on a great scale, but that entails certain responsibilities. Nowadays, customers can experience much greater value from a product than before. Some of the examples are personalized features, follow-up after purchase, fast customer service or overall digital products that perfectly serve some of the customers needs. But, this also means that customers can research your competition much easier than before. There is also more competition that you need to be up to date with. And let’s not forget all the latest trends which implies your constant investment in innovation and improvement of the product. Overall, the digitalization of customer experience is something that easily leads to the digital transformation of processes and can bring great value to your business.

How to start your digitalization process?

The whole process of digitalizing your business can be overwhelming, so I singled out some steps to follow and not get lost on this journey:

1. Assessing the current situation
2. State goals you want to achieve (you guessed it, they need to be SMART)
3. Develop digital strategy
4. Measure results
5. Adjust and constantly look for improvement

1. Assessing the current situation

The first step is to see how things are done right now. This is really important because it gives you a clear starting point. The thing we need to so now is often called a TO-BE analysis. How would you know what needs improvement if you’re unfamiliar with the current situation? Even if you think you know everything about your company, there is no harm (on the contrary!) to get it all out on paper (figuratively speaking, save paper and use note-taking tools!) and bring to your consciousness all the things that are important for your business.

Here are some things you should assess when starting this process and include in your TO-BE analysis:

INTERNALLY:

• business processes
• data and storing
• resources
• technologies
• customer experience
• internal communication

EXTERNALLY:

• market
• customer segments
• external communication (marketing campaigns, customer service, etc.)
• stakeholders
• competitors and substitutes
• overall business environment (place, time, opportunities, laws and everything that’s important for your business and not covered above)

Of course, these things can be divided into even more detailed groups, but this is an overview of core points that are important to consider when starting the digitalization process.

When doing this analysis, it’s easy to stray away and start analyzing the overall state of the business, and that’s totally okay. But if you’re time-bound, try to keep the focus on how are those things documented and done in terms of “can we do it digitally, or can we do it better”.

2. Set SMART goals you want to achieve

We’re clearly not doing digitalization just for the sake of doing digitalization, so we have some goals we want to achieve during this process. The goals you set need to be SMART (Specific, Measurable, Achievable, Relevant and Time-bound).

The best way to understand this is with an example: Let’s say you’re trying to get more customer reviews so you can improve your product. But a goal that simply says “Increase customer reviews.” is not enough, and definitely not a SMART goal. To make it SMART, let’s add all the needed variables: “Increase customer reviews by 20% in the next year.”. With this goal, we covered all the variables a SMART goal needs to have to be usable and measurable.

3. Develop a digital strategy

This is where you fill the gap between the current state of your business and your goals. Of course, this is probably the hardest part and requires a general knowledge of digital tools, techniques and strategies that will help your business achieve the set goals. Sometimes, the best thing you can do here is to hire an expert, but you can always try to do it yourself if you’re confident enough and can analize all the possibilities. For example, you can research the internet for digital tools, explore what the competition is doing or test some of your findings on a smaller group inside your company to see if it works.

4. Implement digital strategy

Another tricky part is implementing a new digital strategy throughout your business. Changes are hard. Knowing how to deal with them and how to deliver them to your employees are the key to make this step a success. Open communication, leaving space for employee feedback and stating all the benefits of new processes are just some of the things needed for a successful change of digital strategy.

5. Measure results

Since we know our SMART goals, measuring results shouldn’t be a problem at this stage. After some time passes from strategy implementation, you would be able to track its course. Also, seeing the success from clear data and measurement is a confidence booster for your company. And if the numbers are not so great, you can start changing things and prevent losing money on time.

6. Adjust and improve

Technology is developing rapidly and digitalization is a never-ending process. Because of this, you need to be on a constant lookout for updates, new tools, automatizations and more to ensure the efficiency of your processes, provide the best customer experience, stay in touch with the industry and ensure optimal revenue without unnecessary money loss.

To ensure a better understanding, I would like to show you an example from Step 2 (increasing customer reviews) and run it through the whole process:

1. How is it now: You’re receiving customer reviews just through your customer service when customers call for help. These reviews are probably not accurate because you get them only from people that are having some problem, and the percentage of reviews received is very small compared to the products sold. Customers are buying your products online in 80% of cases.
2. Your goal is: Increase customer reviews by 20% in the next year.
3. Digital strategy: Since the purchase is done online in 80% of cases, you have sufficient data. You can start asking for digital reviews through emails a week after a purchase has been made.
4. Implementing digital strategy: Someone needs to automate those emails, so you delegate that to email marketers and developers that work with newsletter technologies. Also, someone needs to collect the reviews and check them regularly to see if there is something that’s repeating or if there is some space for improvement. This task is assigned to email customer service.
5. Measure results: After 3 months you collected reviews from 30% of online purchases which is on track to ensure the completion of your yearly goal.
6. Adjust and improve: There was an update to the email automation tool you use, so you can invest some time and resources into its implementation to further increase user engagement.

To sum everything up:

• Digitalization comes when you digitize data and information from analog to digital and gain additional value for doing so
• You can digitalize almost everything, but these things are the most common and important for businesses: data, knowledge, communication, business processes and customer experience
• The steps to take when starting a business digitalization are:

1. Assess the current situation
2. Set SMART goals
3. Develop digital strategy
4. Implement it
5. Measure results
6. Adjust and improve

I hope this helps you with your journey of digitalizing your processes and ensure optimal results for your business. If you have any questions, want to discuss this topic further or need any help in your process, contact me via my Linkedin profile.