5 Strategic Digital Transformation Domains for Your Small Enterpriseby@davidkostya
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5 Strategic Digital Transformation Domains for Your Small Enterprise

by David KostyaJuly 27th, 2022
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Digital transformation is the process of adopting digital technologies to improve business processes, enhance innovation and value for customers. The internet has largely changed how we do business, and we’ve had to observe beyond traditional business models and shift our focus to consumers to survive. The CEO of a Chinese steel manufacturer set out to build a customer-centric organization to gain a competitive advantage by improving customer feedback acquisition. In this article, I’ll take you through 5 strategic digital transformation domains for your organization.

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The digital era has largely changed how we do business.

With the growth of internet users and online platforms, we’ve had to observe beyond traditional business models and shift our focus to consumers to survive.

One word to describe this change is digital transformation; the process of adopting digital technologies to improve business processes, enhance innovation and value for customers.

Check out my previous article on how artificial intelligence is transforming the building and construction industry to discover different ways digital transformation is making headways into the modern economy.

If your business has survived the last two decades, it’s likely that you embraced digital technologies.

Today, 4.66 billion people use the internet actively. Our customers are online; interacting with other brands and customers. They can access information, publish content, and make purchases at the click of a button.

The internet is part and parcel of everyday activities. For businesses, it’s a need we can barely do without.

Interestingly, while every business owner knows that, many hardly understand how aspects of our businesses have been altered by the digital transformation wave.

In this article, I’ll take you through 5 strategic digital transformation domains for your organization.

1. Customers

Traditionally, the relationship between businesses and customers was one-directional. Companies marketed to customers and persuaded them to buy products and services. 

They utilized efficiencies of scale such as mass production and broadcast communication to drive sales.

With mass production, all customers had to accept one product to fulfill their needs despite having different preferences. Technology was expensive, and businesses found it challenging to customize products for customers.

Broadcast communication empowered businesses to communicate one message to all recipients simultaneously, which is the very contrary of what a proper digital transformation strategy means today. 

Hence, businesses influenced customers and could manipulate price, features, and quality to sell more.

The internet impacted the customer first among the digital transformation domains.

It shifted power from businesses to customers by introducing an influence model; customer network.

Through digital tools, customers can discover, evaluate, buy and use products while sharing and interacting with brands. Since they are dynamically connected, they can influence others and shape brand perceptions.

Price Water Cooper found that 73% of consumers consider customer experience an essential factor in purchasing decisions.

Therefore, you should rethink the traditional marketing funnel. Customers’ purchase paths are more varied now than before. They are moving within networks, devices, and mediums.

You have to change how you view customers, from targets for selling to a group of potential brand champions and partners. Content intelligence tools can give you valuable insights into your customers so that you can design content they will love to share, and as a result profit from the digital transformation wave.

Customers have become more influential on businesses, as businesses are on customers.

The CEO of a Chinese steel manufacturer set out to build a customer-centric organization to gain a competitive advantage. 

By improving customer feedback acquisition and offering data visuals for stakeholders, the company generated a 4% increase in gross profits meeting its CEO’s expectations.

Moreover, the shift in focus helped the company achieve more customer satisfaction.  

2. Data

Data has always been a critical driver of business. As such, data is one of the domains of digital transformation with the most significant influence on business competitiveness.

Traditionally, data was produced within a business through manufacturing, sales, and marketing operations and used for evaluation, forecasting, and decision making.

It was costly to obtain, store and utilize this data. Storage facilities were expensive to acquire and maintain, and businesses had to invest heavily in experts to manage them.

For instance, in the 1990s, a 1-megabyte hard drive would set you back about $9, and data storage solutions were hard to come by, partly because CIOs were not prioritizing digital transformation endeavors in their budgets..

Additionally, most data was structured. Hence, while it provided valuable quantitative insights, it lacked in qualitative understanding of customers. The limited perspectives businesses had might have cost them many opportunities.

Lastly, paper-based operations were time-consuming and frustrating to work with, considering the difficulty in manual searching of data.

Today, digital tools have enhanced the data landscape. Businesses and customers are producing content at a phenomenal rate.

Every interaction and process within your business and with customers results in data production. However, storage is affordable and uncomplicated including the highly scalable cloud storage systems 

Yet most data is unstructured data from social media, mobile devices, and sensors on every object in your company’s supply chain.

The biggest challenge, therefore, is finding a way to derive valuable information from this data.

You should treat data as an asset and use advanced data analytics tools and technologies to arrive at new insights and solutions.

For instance, you wouldn’t waste time in manual research when Optical Character Recognition OCR Software and Intelligent Document processing tools can digitize documents and extract data for fast and easy browsing.

An international transport and logistics company was spending so much time in manual document processing. 

By shifting to an OCR software to automate document digitization for data extraction, the company saved 15,000 man-hours per year and streamlined document processing.

Implementing digital technologies to solve business data challenges gives you a significant boost in business.

3. Competition

Traditionally, businesses did compete with rivals that looked similar to them and within their industries. They needed similar production inputs, used similar supply chain partners to compete for the same customers.

Since businesses only focused on competitors within their industry, they had less pressure to develop innovative services and products. 

In most cases, economies of scale played a huge role by ensuring the most prominent companies continued to dominate, though we can still name that as one of the benefits of digital transformation today as well..

Businesses viewed their customers as advertising targets and focused more on improving technology to outdo their immediate competitors. 

Companies from other industries posed little competition thus were considered as potential partners.

Today, competition is among the strategic digital transformation domains for your organization to look into as no static industry boundaries exist.

The digital era has enhanced asymmetrical competition, where businesses from other industries, who look nothing like you, offer competing value to your customers.

Long-time business partners may become your biggest competitor when they get the opportunity to serve your customers directly; an event referred to as digital disintermediation.

Competition has been redefined to a model where businesses seek to influence the same consumers in the most impactful way.

Due to the interdependent business model and mutual challenges across different industries, you should cooperate with direct rivals to leverage their capabilities.

YouTube, a free video-sharing website, was conceived to enable internet users to watch videos online. However, it brought a storm to the cable television industry, offering a content-rich alternative to paid services. 

Today, 94.5 % of watchers streaming videos on TV are watching YouTube as well.

Essentially, YouTube leveraged improved internet access to offer value to customers and thus pulled them from a market in a different industry.

4. Value

Before the digital era, a business’ value proposition was relatively steady and defined by the industry.

Products were updated, marketing strategies tinkered with, and business operations improved incrementally; but business value remained relatively stable.

Businesses differentiated themselves based on price, quality, and branding and continuously delivered the best version of the same unique selling point.

They provided products that conformed with industry standards as they used a limited perspective of what customers considered valuable, which is the very opposite of the digital transformation trends that define the modern enterprise today.

Due to a lack of access to comprehensive market data, product differentiation was hard and expensive for businesses to achieve. Hence the market mainly was flooded with monotonous products fulfilling customers’ needs in a similar fashion.

In the digital era, value became one of the most impacted domains of digital transformation.

A business value proposition is constantly changing. Due to easy access to information, your competitors are constantly discovering ways to appeal to customers. Likewise, customers’ preferences are shifting as more options are available in the market.

To stay afloat, you must be evolving by harnessing technology to enhance your business’ intrinsic value.

The pace of change varies from industry to industry. Still, considering the blurred industry boundaries, one change in a completely unrelated field can disrupt your market and change the course of business.

So you must constantly align your company goals to accommodate constant changes while focusing on offering value to your customers.

Amazon’s growth since the 1990s is an excellent example of a change in value proposition. It started by offering only books. Then with the growth of digital technologies, it ventured into selling other products. In 2006, it provided cloud computing and then ventured into logistics by 2015.

The constant improvements to enhance its intrinsic value have made it one of the most valuable companies in the world.

5. Innovation

This list of significant domains of digital transformation couldn’t be complete without innovation.

Traditionally, innovation was controlled solely in terms of the final product.

Because market testing was complex and expensive, most choices were made based on intuition by managers with limited time or a good understanding of the market and a sense of where it would move next.

The probabilities of failure were high, and so was the cost.

A lot of resources and labor hours were spent on ineffective iterations as businesses mainly depended on the skills, experiences, and preferences of product engineers.

According to a Harvard Business School Professor, Clayton Christensen, 95% of new product innovations failed. Assumptions could not be validated unless businesses were brave enough to produce them and see how they perform in the market.

Nowadays, digital technologies allow for efficient innovation. These digitally-driven techniques are characterized by continuous learning and fast experimentation. 

You can test ideas and get input from the market from the start of the innovation cycle, during development, and right up to product launch.

Your assumptions can be validated with real customers, and you can develop products iteratively through cost-effective and time-sensible processes while improving organizational learning.

As such, you have an excellent opportunity to leverage digital technology to analyze unstructured data and derive valuable insights from them. You can then act on these data-driven insights by focusing on designing products that cater to customers’ needs in innovative ways.

Ikea, a Swedish company that designs and sells furniture and home accessories, has managed to stay afloat since its foundation in 1943 by continuously innovating. 

It carries innovation deep within its philosophy which has propelled it to generate over $ 31 Billion in global revenue as of 2016.

Through a well-established system of innovation, you can improve the chances of your business thriving despite changes in economic conditions.


Those are the 5 strategic digital transformation domains for your organization.

These domains have a significant impact on your business. You should endeavor to act on these insights to ensure business success.

To recap:

  • shift your focus from marketing to customers’ experience,
  • analyze data and make data-backed decisions,
  • consider asymmetric competitors to leverage their capabilities,
  • continuously improve your value proposition, and
  • constantly innovate and adapt to changes.

By implementing these recommendations, you embrace a culture of change and position your business for success.

Ultimately, you need to rethink traditional environments and adapt to the new demands of the digital era.