Digital Transformation in Operations Management: Opportunities and Challenges

Jun 21, 2023 | Change Management, Digital Transformation, Operations Best Practices, Operations Management

Digital transformation has become the new term that has captured the interest and imagination of COOs running businesses across all industries. The short version of the explanation for digital transformation is it leverages technology to streamline operations, improve customer experiences, and most importantly, help organizations gain a competitive edge. However, digital transformation also presents challenges, such as change management, data security, and workforce skills.

Creating and implementing a digital transformation plan should help COOs take advantage of the many benefits, while turning the challenges into opportunities.

Opportunities of Digital Transformation in Operations Management

The positive impact of digital transformation has helped businesses improve operations. Whether you are the COO of a logistics company or restaurant chain, digital transformation offers several opportunities to improve your organization’s performance.

Streamline Operations

If the COVID-19 pandemic taught COOs anything, it is operating a leaner, more efficient company can boost both revenue and profit margins. Digitizing your organization’s operations benefits employees that now can opt to work at least part-time from home. Several studies indicate working from home full-time or on a part-time basis increases productivity by more than 75 percent. A report by Owl Labs showed 70 percent of employees that worked from home during the height of the pandemic discovered virtual meetings are less stressful than in-person meetings. Sixty-four percent of employees prefer hybrid meetings to always meeting with other team members onsite.

Digital transformation to streamline operations starts with cloud-based solutions that allow employees to remain connected in real-time 24 hours per day, seven days a week. Tools such as Adobe Sign simplify the document signing process, which increases the speed of completing projects.

Improve Customer Experiences

A digital transformation plan must include a customer-focused component. One of the key elements of improving customer experiences via a digital transformation strategy involves presenting information in real-time, without overwhelming customers with too much data. Getting regular customers involved in the digital transformation process by asking for feedback can help COOs refine their strategies to digitize all operations.

For example, SAP technology enables organizations to reconfigure customer touchpoints. This improves customer service by streamlining interactions through a fully integrated computer network. Different departments inner connect seamlessly to provide improved customer service, which is especially apparent in resolving complaints much faster under the new streamlined IT system. By developing a content-driven IT infrastructure, your organization can develop a 360-degree view of all services, which enhances access and ensures flawless interactions.

Deliver Innovation Through Agility

IT agility at all levels of your organization decreases the layers of bureaucracy to meet the needs of your customers. To thrive in the era of digital transformation, COOs must be open to embracing new technologies. The most effective way to embrace new technologies involves incorporating machine learning (ML), virtual reality (VR), and artificial intelligence (IT) into your IT platform. These three technologies represent the tip of the iceberg when it comes to delivering innovation through agility.

One important thing to remember: Your organization cannot expect to deliver innovation automatically by improving the agility of your IT platform. You also must create a culture that encourages innovation at all levels of operation.

Challenges of Digital Transformation in Operations Management

For every opportunity presented by digital transformation, it is met by a challenge that can derail the goal of improving operations.

Change Management

COOs must be able to manage change to benefit from implementing a digital transformation strategy. This involves managing change with transparency. Withholding information to team members can stall a digital transformation initiative. Employees tend to lose trust in the management team whenever they discover the management team has withheld critical information. Open, honest communication in all forms represents a good start in mastering change management.

Data Security

The CIO of your organization must work closely with the COO to ensure data security during the time it takes to transform the operations into a fully functional digital platform. Cybercriminals exploit IT platforms undergoing some type of upgrade, which means as the COO, you should make data security a priority during the digital transformation process. Integrating data security tools such as firewalls, data encryption, and multi-factor authentication (MFA) can help your organization leverage the power of digitizing operations, while at the same time limiting the number of vulnerable IT entry points for cybercriminals.

Developing Workforce Skills

Your organization’s digital transformation plan is only as effective as the team members making it happen. In addition to investing in new IT infrastructure, your organization also must invest in its people to achieve its IT goals. Training your team members to master new technical skills is the foundation for training. Ongoing training that helps your organization incorporate advanced technologies into its IT platform also should be a vital part of the program for developing workforce skills.

Training takes place in every department to create an inclusive environment for digital transformation.


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