Digital transformation is a complex process that many companies attempt, but don’t always achieve. Many confuse digitization with digital transformation, but the real impact comes when the digitization of operations drives significant change in the business.

Digitization is not just about implementing technology; it is about guiding the growth of the business in the desired direction, like a gardener guiding the growth of a plant. It is critical to understand that digital transformation does not have a definitive end, but is a continuous path of evolution for both the technology and the business.

The most common mistake is to try to plan everything in detail from the beginning. Instead, it’s more effective to focus on each step of the plan that delivers immediate value. This allows flexibility to adjust course as the organization and team learn from the process. The first step should be carefully chosen and detailed, while the overall plan should be adaptable to inevitable changes.

Of course, each company has its own reality, so start where processes are stalled. Where is time or money going down the drain? In other words, find the problems that are easy to solve, the digitalization opportunities that require less effort and bring more results.

7 Steps to Digital Transformation

1. Eliminate paper

The first step in digital transformation is getting rid of paper. You can still have paper around the edges, and receive and generate information on paper if absolutely necessary. Digitize all information in the organization and make it easier to copy, move, analyze, and integrate data. Gradually automate all your processes.

2. Structure the data

The second step is to structure your data. Having digitized images of documents is better than having them on paper. But images are hard to work with. Having text is better than images because you can search quickly, extract valuable data, and automate processes. And having the same data in a format such as a database table, XML, or JSON files is much better. This requires you to build software or buy. Try buying first, don’t reinvent the wheel. Develop custom software only if you can’t find anything that makes sense for your business. If you buy software, make sure it can be easily integrated.

3. Automate repetitive work

The third step is to eliminate as much human work as the computer can do. This is where you’ll start integrating your software and creating processes within it. If there is a human somewhere copying and pasting data between systems, start there. It’s common to find people in companies with tasks like, “Every Friday, I take the data from the CRM, the new contracts in the ERP, and put it into a spreadsheet to create a report. That kind of thing is very easy to automate.

4. Define consistent data flows

The fourth step is usually done in conjunction with the third. You define where in your IT ecosystem each piece of information is controlled. The information may be duplicated, but you need to ensure that each piece of data has a single origin and that the data flows remain consistent. For example, a request to cancel a sale in e-commerce can be made by the consumer or in the call center back office. In both cases, the cancellation is synchronized with the ERP, which updates e-commerce. Ensuring that there is no disparate information and that each process is looking for information in the right place is perhaps the most important thing you can do.

5. Automate decisions with algorithms

The fifth step is to look for human decisions that can be delegated, even partially, to an algorithm. We’re not talking about artificial intelligence, just simple algorithms. For example: Today, every order that includes services must be approved manually.

6. Generate Data Intelligence

In the sixth step, with the data structured and automated, generating reports becomes much easier. Now it’s time to give the business the ability to analyze and gain intelligence from the data. Since you defined the data sources and flows in the previous step, you can now map all this data and bring it into a BI tool or other data analysis tool. For most organizations, there are already simple tools available to help your business people get the insights they need to make decisions.

7. Apply Artificial Intelligence

We’ve reached the final step. Now you’re ready to apply artificial intelligence specifically to your business. In the seventh step, you look for places where humans are still working, and if you’ve done the previous steps well, you’ll see that humans are only working on more complex tasks that require intelligence, knowledge, and judgment. And it’s in tasks like these that artificial intelligence can shine, not by eliminating human labor, but by giving humans tools and information to make their jobs easier. 

As you can see, we’re talking about a long journey. There’s work to be done for years. But by dividing things up in this way, you create value right from the start.