Research predicts that businesses will directly invest a total of $7.8 trillion into digital transformations between 2020 and 2024.

To make these investments pay off, businesses will need to ensure their employees remain engaged throughout the digital transformation process. This means internal communication will play a crucial role in making digital transformation successful.

In this article, we’ll cover the basics of digital transformation, and offer advice from a software company’s personal experience on how you can use internal communication to ease digital transformation.

What is digital transformation?

At its core, digital transformation is an umbrella term that involves the integration of digital technology across a business. The purpose of these integrations is to change how a business operates — by either optimizing existing processes or creating new ones.

There are 4 types of digital transformation, based on why digital technologies are used:

  1. Business process transformation. Digital technologies are used to lower costs, increase work quality, improve employee and customer experience;
  2. Business model transformation. Digital technologies are used to update or replace traditional business models;
  3. Product and service transformation. Digital technologies are used to expand the market reach by redefining the organization’s products and services;
  4. Cultural and organizational transformation. Digital technologies are used to redefine organizational processes, mindsets, and management processes. 

What are the key benefits of digital transformation?

According to a PTC survey, the top 3 benefits of adopting a digital model for your business are:

  1. Improved operational efficiency — as agreed by 40% of respondents;
  2. Faster time to market — as agreed by 36% of respondents;
  3. Meeting the changing expectations of customers — as agreed by 35% of respondents;

The graph below shows more details about the benefits associated with digital transformation.

Source: ptc.com

As evident, digital technologies have the power to trigger various vital improvements, reductions, and additions — such as the addition of new revenue streams. In fact, a Gartner survey shows that 56% of CEOs claim digital improvements have triggered revenue increases for their businesses.

A famous example of successful digital transformation

To better understand what successful digital transformation looks like, let’s look at a famous example — Domino’s Pizza chain.

Back in the 2000s, Domino’s had a poor reputation and a sales problem. The customers criticized the pizza quality. The stock price hit an all-time low in 2008., with $3,00 per share. 

On July 14th, 2021, Domino’s price per share stood at a whopping $486 — and it has a rising tendency. It is currently the world’s most popular pizza chain, with 17,800 stores in more than 90 countries. 

Why is Domino’s team so successful today? 

Well, they started by vastly improving their pizza recipes. 

But, they also introduced a lot of digital innovations.

Over the years, Domino’s perfected the company’s pizza ordering system via several apps and digital solutions:

  • In 2008, they developed “Pizza Tracker”, an app that helps customers track the progress of their orders;
  • In 2011, they introduced a Domino’s iPhone app that allows customers to order while on the go;
  • In 2015, they developed “Anywhere”, an app that allows customers to order via Facebook Messenger, Twitter, Amazon Echo, and even their Smart TVs;
  • In 2016, they introduced the world’s first commercial drone pizza delivery service;
  • In 2020, they launched the “Domino’s Carside Delivery” service, to meet Covid-19 safety measures and provide contactless delivery.

Today, half of Domino’s workforce are software and analytical professionals. The digital transformation of this pizza business proved crucial for success — even more so than the improved pizza recipes.

What are the key challenges of digital transformation?

The benefits and famous success stories are the ones that inspire businesses to adopt digital technologies. But, for many businesses undergoing digital transformation, the challenges may prevail. Namely, an Everest Group study shows that 73% of digital transformation initiatives fail. 

Smart Insights reports a complete list of challenges that accompany digital initiatives. 

33% of respondents highlight cultural and behavioral challenges as the No. 1 problem. 

Other influential challenges include various digital-specific deficiencies — such as:

  • the lack of understanding of digital trends;
  • the lack of the right talents;
  • the lack of IT infrastructure.

The chart below showcases that non-digital challenges are also relevant. Rigid business procedures, as well as the lack of dedicated funding, data, senior support, and internal or organizational alignment, cap off the list of key digital transformation challenges.

Source: smartinsights.com

How internal communication helped us ease digital transformation

As a software company, we at COING were always inclined to digital transformation. Most of the time, when we needed a cost-effective digital solution for our daily operations, we’d build it ourselves. 

When the Covid-19 pandemic started, this practice of ours became more crucial than ever, as we embraced remote work. It was then that we realized the true importance of internal communication.

To make our remote processes effective, we needed to make our internal communication processes effective, and fast. We stopped going to the office every day, so we needed to perfect our virtual communication systems.

In this regard, we were no different from at least 93% of businesses. As one Statista research shows, the pandemic has accelerated digital communications strategy schedules across organizations for 1 to 15+ years.

Source: statista.com

So, to make our remote internal communication effective, we needed the right digital tools. 

We were already using a team communication app, even before the pandemic — but we always wanted a solution of our own. 

So, we built Pumble, a team communication app that functions as a free Teams and Slack alternative. 

The key functionality of our app is instant messaging. 

It’s possible to send messages directly to individuals or groups of people. 

But, it’s also possible to create private and public channels that center on specific topics, where relevant teammates can ask or answer questions and participate in discussions. 

These features proved crucial for communication and collaboration during the pandemic.

At first, we used the app internally. But, our plan was always to launch it to the public. So, we had to communicate and collaborate on a regular basis, remotely, while building the app. 

In other words, to talk about the development of Pumble, we used Pumble — which became the focal point of our digital transformation during Covid-19 times, in more ways than one. 

Here’s how we used proper internal communication to ease digital transformation.

We communicated all changes 

To create a functional digital workforce, you’ll need the right people, the right technology, and the right processes.

Once you have that, you’ll need to make the process of digital transformation transparent, for the sake of the team. After all, a TINYpulse survey shows that transparency is the number one reason for higher employee happiness at work.

While undergoing digital transformation, people will have a lot of questions. And, answering these questions will help you keep your employees connected and engaged. 

While developing our product, we’d share all updates in a dedicated public channel. 

People would ask and answer questions, start discussion threads, and point out potential problems. 

We talked about what was new and what decisions needed to be made. We sought and provided positive updates, to inspire peers. We celebrated progress and wins.

This helped our team stay engaged with the project on a daily basis. It also helped align the everyday efforts of individuals with long-term team goals. 

We communicated the importance of all changes

You should not stop at simply communicating the changes that are happening — address why they are happening to begin with. Why will the changes benefit the employees? Why will the changes benefit the customers they serve?

With Pumble, we carefully scrutinized and tested every feature we wanted to add.

After all, this was a product we were making for ourselves, but also other similar organizations. So, we were able to perceive the effectiveness and potential use of the features, from a dual point of view:

  1. As a subjective team invested into making a successful product;
  2. As objective users who would be using that product.

This helped us understand the reasons for most changes. But, if we had questions, we’d voice them in appropriate private/public channels or via direct messages to groups and individuals. And, we’d always get answers.

So, be direct and honest about the digital transformation processes, their goals, and the changes they will bring. 

Acknowledge, discuss, and aim to ease concerns.

Test what works and what doesn’t, to better understand what you should do in the future.

And, most importantly, encourage progress-related conversations. 

When employees aren’t aware of the progress made by digital transformation and/or don’t understand why certain decisions are made, they’ll feel disconnected from the business. If they feel disconnected from the business, they won’t be motivated to perform their share of the work to the best of their abilities. As a result, any digital transformation program is likely to fail — and even bring the business down with it.

We communicated in a timely manner

The matter of having the right information at the right time often decides whether a digital transformation initiative will take off or not.

So, while creating a steady stream of progress updates, make sure these updates are timely

The fact that we were essentially collaborating on and in an instant messaging tool helped us maintain timely communication about digital transformation processes.

Whatever we wanted to know or share, all we needed to do was send a message. When we’d send that message to an organization-wide public channel, all teammates would be in the position to get the new information or ponder a question in a matter of seconds. Everyone would be able to react to the news, ask follow-up questions, provide clarifications, and extend the conversation, immediately.

This timeliness also eased cross-functional collaboration — no matter whether they belonged to HR, development, or marketing teams, people were added to channels if the topic was relevant for their roles and responsibilities. This way, everyone important to a matter would always be in the loop.

This is a crucial reason why proper internal communication is the key to successful digital transformation. People know exactly where, how, and when to look for or share information. And, what may be even more important, they understand they are expected and encouraged to do so.

We created dedicated water cooler spots

Water cooler spots, no matter whether they involve actual water coolers or not, are important for proper collaboration. After all, teams who socialize on a regular basis are more likely to feel comfortable enough with each other to share information. This means that water cooler spots can help you eliminate information silos.

Digital transformation has introduced virtual water coolers. They’re often the only socialization option for virtual and hybrid teams. Even office-based teams can find benefit in digitalizing their water cooler spots — especially companies that employ hundreds of people who rarely have a chance to communicate/collaborate with more than a handful of their peers. 

To keep casual conversations going while working remotely due to the pandemic, our team created fun-oriented dedicated conversation channels, alongside our business-oriented channels. We also introduced a #random channel where we’d ask random questions, share funny memes, or discuss insightful articles we’d find online.

The more such channels we added, the more we used the app. And, the more we used the app, the better attuned we became to best team chat app practices. We’d better understand what features we needed to add to make our digital solution effective, for ours and other teams.  Increased use also helped us understand how we can demystify certain features and decrease the expected training time users might need to start using the app to its full potential. 

We also socialized more, which helped us establish and maintain a positive virtual team culture — even amongst teammates who’ve never met their peers in person.

Wrapping up

Organizations undergoing the process of transforming their daily operations via digital solutions tend to focus on the business and technical aspects of the changes. 

But, you should not forget about the employees who will be impacted by these changes.

So, make communication about digital transformation an ongoing process. Aim to communicate everything people in your organization need to know, when they need to know it — progress, updates, and results. This will help employees better understand everything they need to know to make digital transformation successful — the whens, hows, wheres, and whys.

Our remote work experience had us completely digitalizing the processes of communication and collaboration. And, the results cemented our belief in the importance of proper internal communication. To embrace digital change, we need to know everything about it. When we embrace digital change, only then can digital transformation efforts live up to their full potential. 

About the author: Nikola Radojcin has been a social media enthusiast for a number of years. He currently works at Pumble where he makes sure the company is up to date with modern consumer needs.