Digital transformation
7 min read
7 April 2021

8 Characteristics of a true Digital Business

Kelly van der Horst
digital business

Becoming a true digital business or a digital-first business, or going through digital transformation, is an aim for many organisations. Digital maturity can lead to many strategic advantages and unlock a wide range of short- and long-term benefits that impact the bottom line, drive competitive advantage and can ultimately be a factor in the long-term survival of a business.

But what does it really mean to be a 'true' digital business and what are some of the key characteristics of these organisations? In this article, we're going to explore these issues and consider some of the traits of organisations who are making the most out of digital.

What is a digital business?

Before we can explore what it means to be a 'true' digital business, we need to define what a digital business is.

There is no consensus about what a digital business is: some might argue it is about having digital capabilities and investment in place, while others may say it requires having a certain level of digital maturity. Some will think it is about having a business model built on digital, and others may even say that a 'digital business' is more concerned with having a digital-first mindset and culture.

The truth is that a digital business can incorporate all these interconnected meanings. In our view, we'd suggest that a true digital business exists when one or more of the following are true:

  • The organisation has been through a significant digital transformation impacting both customers and the employee experiences
  • There is some kind of digital maturity in place, with the majority of transactions carried out entirely digitally
  • The business model and future business model is predominantly or entirely digital
  • There is a strong digital culture throughout employees, who embrace digital both for the everyday and the future.

What does it mean to be a digital business?

Taking in this definition, being a digital business usually means you have:

  • A significant ongoing commitment to digital in your processes, service delivery model and everyday operations
  • You have a digital business strategy in place, and digital is a part of other sub-strategies across your company
  • You are committed to ongoing digital business transformation, even if you have already been through it
  • You are actively investing in digital platforms, products and services
  • There is a digital culture - more on this below!

8 characteristics of a true digital business

It's fascinating to examine the various characteristics of a true digital business. Organisations of different sizes, from different sectors and based in different countries can exhibit similar traits.

1. A flatter organisation and less hierarchical culture

Many organisations are hierarchical in nature with multiple layers of management. This can lead to a risk-averse culture, stifling innovation and making it difficult to be truly agile and enable quick decision-making.

Truly digital organisations which invest heavily in digital platforms, particularly internal collaboration and communication tools, frequently find that they become consequently less hierarchical in their culture. When there is a quick and easy way to collaborate and communicate which all levels of the organisation can see, the need to have so many levels of hierarchy fades away.

Digital tools make it quick and easy for senior management to communicate directly with lower levels of the organisation and vice versa; there is simply no need to have several layers of management to get a decision finalised or to action something. Similarly, digital tools that everybody can access encourage transparency and accountability, reducing the need for micro-management. In the long run, this can lead to a flatter organisation, both in actual structure and in the accompanying culture.

2. A culture of digital innovation

Digital is a catalyst for innovation. Truly digital organisations often have a culture of innovation, with a desire to experiment and create new products, services and ways of working. Digital maturity often provides the opportunity for innovation, with more tools available for employees to implement new ideas. Successful digital innovation also tends to produce further digital innovation, with the right tools, processes and approaches in place to bring ideas to fruition and ultimately to market.

When these digital possibilities are in place, employees can take inspiration from successful examples of digital innovation by seeing ideas being taken seriously. Here, the impact on organisational culture can be truly transformative, with a spirt of innovation starting to become part of the company's DNA.

3. Leaders who embrace the power of digital

Digital transformation and navigating an organisation to digital maturity can be a bumpy ride; it requires strong leadership with a confident vision. Digital businesses tend to have leaders who truly embrace the power of digital, often leading by example through their use of digital platforms both inside and outside of the company. They also advocate for strategies and approaches that continue to have digital at their centre.

4. Use of data and analytics to continually improve

True digital businesses have a higher number of digital transactions that occur with both customers and employees. This produces potentially valuable data from which companies can use analytics and dashboards to gain insights to make improvements, as well as support decision-making. When you start to combine data from different systems and sources and consider them together, the possibilities get even more interesting.

Digital companies tend to exploit this data more actively compared to traditional companies. This is not only because data is more easily available to them and they can use capabilities like Power BI to coherently display it, but also because they have the digital platforms to easily act upon insights and make subsequent improvements. When this happens, teams get into the habit of using measurement to support continual improvement.

5. Hyper-automation of processes

Automation and AI present current and future opportunities to improve productivity. Digitally mature companies which have gone through digital transformation have often already digitised manual processes to drive efficiency, time saving and lower costs. However, true digital businesses tend to never stop, and continue to automate processes where they can, increasing productivity and improving services. The collective benefits of the improved processes brought about by hyper-automation can be very significant.

6. Attention to digital literacy and upskilling

The 'digital literacy' of your workforce is crucial. To get the very best out of digital tools, employees need the skills, knowledge and confidence to be able to put them to the very best use. Digital-first companies often take the time to invest in learning, training and ongoing support in this area to make sure employees can productively utilise the digital workplace. This goes beyond just knowing how to use a tool; it's also about being aware of the different options available, having knowledge of new ways of working and cultivating the required mindset.

Another significant issue is ensuring employees are given the right skills for the future workplace. Some true digital companies are starting to reskill sections of their workforce to take advantage of the future opportunities that AI and automation are going to bring.

7. A customer-centric approach

Digital-first organisations tend to be very customer-focused. With customer interactions becoming increasingly digital, particularly since the start of the COVID-19 pandemic, a focus on digital and customer service tends to go hand-in-hand. Developing richer digital touchpoints with customers is often a key reason for companies to invest in digital platforms.

Being customer-centric means having good data to better understand your customers in order to improve their experiences. Having more digital touchpoints with your clients means you can get valuable insights from your data, allowing you to drive improvements and implement a customer-centric approach to everything you do.

8. Optimal digital employee experience

There is a strong link between employee experience and customer experience. If your employees don’t have a good experience in their day-to-day work, have inefficient internal processes and are discontented, it will inevitably start to impact customer experiences. True digital businesses invest strongly in a good digital employee experience because they know it has a huge overall impact on everything from employee turnover to profitability and how customers feel about their brand.

A good digital employee experience improves productivity, reduces information overload, makes information readily available to help customer-facing staff inform customers, supports innovation and agility, and helps to retain the best talent.

Becoming a true digital business

An adaptive workspace like Workspace 365 can help you on your digital transformation journey, by for instance enabling you to improve your Digital Employee Experience, simplifying tasks and processes and improving communication and the adoption of digital tools. Curious? Why not book a free demo?

Subscribe to our blog

Get the latest tips, resources and updates to help work better!

Related articles