In the last two years, we’ve all become well aware of the term “digital transformation” (DX). It is regularly touted as the next essential step for business development. But what does digital transformation really mean? Many firms immediately interpret this as a shift to only-online operations and an enlarged presence on social media. That is far from a complete picture, and there are a few key questions every managing partner should be asking, and answers they should be getting, to ensure the firm is actually on the right path.
First: What is Digital Transformation?
Let’s start by busting a common misconception: digital transformation is not only about technology. In a class at the Drexel University Executive MBA program, Microsoft advisor April Walker said this, “Digital transformation is not just ‘doing digital.’ Digital transformation is a deliberate, strategic repositioning of one’s business in today’s digital economy.”
As companies pour millions of dollars into digital transformation initiatives, they often do so with a focus on specific technologies, for instance automation or artificial intelligence or machine learning. In accounting, new technologies to automate bookkeeping and similar tasks are cropping up everywhere. Just because a firm integrates these, doesn’t mean they are successfully investing in digital transformation.
In essence, digital transformation is about using digital technologies to modify business processes, firm culture, and customer experiences to meet new demands in the market. Inarguably, we are in a digital age. Digital transformation is a context-aware, intentional process to adapt to this age.
3 Types of Digital Transformation
This aspirational definition is all well and good, but managing partners are busy, and even maintaining business as usual requires full attention. It is helpful to look at facilitating digital transformation in three key areas:
1. Process Transformation
How can processes better meet the needs of both internal and external customers?
This component of digital transformation may be the most technology-driven, and requires an assessment of existing processes and operations. How do these work in a digital-first environment? The last two years of social distancing and canceled events have accelerated adaptation in this area, requiring firms to think about digital marketing, networking, and lead generation.
2. Business Model Transformation
How is value delivered through accounting services, and does the current model adequately meet marketplace demands?
Consumer expectations are changing. Rising talent is young. Being aware of, and responsive to, these dynamics is key to effective digital transformation. Winding River Consulting facilitates this aspect of DX regularly for our clients. Often, an outside consultant is key to comprehensive analysis and change management. Contact us to learn more.
3. Cultural Transformation
How is your firm’s brand positioned to lead through change? Does your workplace culture and image reflect your vision and goals?
On the heels of The Great Resignation, talent acquisition and team leadership are at the forefront of everyone’s mind. Is your firm investing in its leaders? Do you have a strong, recognizable, consistent brand presence? Do you attract the right people at the right time, and are your people happy? These are not side issues: these are mission critical for long-term success.
How to Support Digital Transformation
Some firms have made more progress in digital transformation efforts than others. The world of accounting is at an inflection point, and managing partners have an unprecedented opportunity to get this right. Firms that are excelling at digital transformation share these traits:
- Managing partners and executive teams promote and own the process.
- There is a widespread vision and passion for success: “the art of the possible” has caught on.
- Value is created and monitored.
- All initiatives are built with flexibility, so ongoing improvements are possible.
Change is nothing new: it occurs regularly and in cycles. Digital transformation is the next frontier, and firms that commit to it will lead the way.
Winding River is here to be a trusted partner in the process: reach out to learn more.