Fourth industrial revolution or industry 4.0 is a continuation of what started in the 1840s, with the mechanization of processes through water and steam. The evolution of software, industrial automation, artificial intelligence, systems autonomy, resource optimization and Big Data move the business and personal life of the whole society.
Digital transformation is about change – in the process, in the way companies work and engage with their internal and external customers. All of them facilitated by technology. Customer experience, operational processes and business models are the three main areas that transform digitally.
The subject is quite broad. For this reason, we have developed material that better explains how digital transformation works, its importance, application examples, the profile of the professional to lead the movement and how to apply in a company. Follow us.
What is the fourth industrial revolution?
The first industrial revolution is marked by mechanization, steam and water. The second revolves around mass production and assembly lines using electricity. Electronic systems, IT and automation are the milestone of the third industrial revolution.
In general, industry 4.0 is related to the evolution of tools that emerged in the third industrial revolution. Its main processes include:
- cloud computing – data systems that operate through a server accessed via the web;
- intelligent factories – responsive and flexible companies, fully integrated by cyber-physical systems and capable of responding immediately to their demands;
- Artificial Intelligence (IA) – resources used for machines to be able to perform human actions in an improved way, such as reading and interpreting a large volume of graphics in just a few seconds;
- Internet of Things (IoT) – ability to connect everyday objects with the internet, such as the popular SmartTVs.
What is digital transformation and how does it work?
The concept of digital transformation can be summed up as the integration of technology with all areas of a company, changing its operational methods and how they add value to customers. In this sense, it may mean the replacement of traditional processes for the adoption of new and innovative practices.
That’s because while technology is the key element of industry 4.0, digital transformation is not just about implementing it. Often, it concerns the abandonment of outdated processes and outdated tools, so that new resources can take their place.
Basically, the digital transformation uses digital advances, such as analysis, mobility, social media and the Internet of Things to:
- improve the use of traditional technologies, such as ERP;
- change the relationship with external and internal customers, processes and the value proposal delivered by the business.
Why is it important to adopt these changes?
A company can take on the digital transformation for several reasons. However, there is a common reason among them all: guaranteeing the sustainability of the business in an increasingly competitive market. This is because the main factors related to digital transformation are profitability, customer satisfaction and opening up a competitive advantage. To understand the relevance of these changes, learn about some benefits.
Integration between departments
Digital transformation positively affects all levels of an organization. For this, all processes, strategies and the company culture must be included in the changes – mainly because the resources are made to be used together, as we will see in the course of this content. When all departments are aligned and act collaboratively, the tendency is for results to exceed expectations.
Increased efficiency
Directly, digital transformation involves optimizing processes, accelerating and simplifying workflows. With that, activities are carried out more efficiently. As we highlighted in the brief summary on Artificial Intelligence, instead of spending hours processing, storing and collecting data among stacks and stacks of paper, it is possible to use digital systems that do this job.
Simple and quick access to important information ensures that executives have plenty of time to analyze the results, thinking about the best strategies for solving problems and ensuring that the company takes an innovative and successful stance.
Customer acquisition and loyalty
Regardless of the moment, the industries are going through, the objective of any company is to be profitable. In order for sales to accelerate, it is necessary to meet customer needs.
The technological tools provide all the necessary support for this to be possible since generating secure, consistent and real data on consumer behavior. Its results can be used in favor of marketing strategies, sales and development of new products and services.
What are the biggest current transformations within companies?
To make the concept of digital transformation and its importance even clearer, discover the biggest changes promoted by technology within companies.
Analytical Tools and Applications
These tools – like People Analytics – were designed to collect and analyze a large amount of data, originating from various sources. The difference between the modern collection of information for traditional formats – such as satisfaction surveys, whose results were plotted on a common Word and Excel chart – are in the so-called 3Vs:
- volume – a large amount of data;
- variety – data is collected from different sources;
- speed – both collection and analysis are performed very quickly.
However, companies must prepare for a big data revolution. Its main characteristics – volume, speed and variety, already described above – are diversifying. The data is not just numbers and graphs collected. We now have mobile, sensor and voice data. The list keeps growing, after all, the technology keeps evolving.
Mobile apps and tools
More and more people have preferred to connect to the internet through mobile devices, such as smartphones and tablets, than by fixed equipment, such as computers. For this reason, many companies direct the application of their strategies to mobile devices.
The order was reversed. Today, we see an app available on Apple or the PlayStore. Then, they are adapted for use on the desktop. In reality, some cannot even be used on the computer. Its use is exclusively mobile, as is the case with digital banks.
Social media
Social platforms such as Facebook and LinkedIn, allow the organization to communicate with its internal and external customers. They can also be used as learning tools to monitor industry trends, customer feelings and competitor movements. That is, they are great sources of data for analytics tools.
Cloud information storage
For some time now, companies have chosen to store their most valuable information in the cloud, giving preference to software and information systems that guarantee this storage format as basic functionality. Practice will also change.
As companies seek to harness the efficiency of cloud computing to optimize their spending and working time, smart features for automation and data analysis services are developed.
The artificial intelligence employed in cloud systems considers the customer experience. This means that cloud storage is no longer just a place where important documents and data are stored, and is now used as a source of Big Data, generating value for the business.
What are the examples of industry 4.0 applied to business sectors?
In practice, industry 4.0 has gradually changed the way of doing business. See some examples of these transformations applied to the sectors of a company.
Digital transformation into marketing
One of the main focuses of digital transformation in marketing is to reach more people, turning users into customers at a lower cost. When resources are well used, they generate quality leads, bring the company closer to consumers and facilitate their loyalty.
The materials used in digital media are cheaper than production focused on analog and traditional media. For this reason, we have stopped receiving campaigns in our mailboxes. The news arrives by email.
The digitization of campaigns opens the door to automation, capturing information and analyzing data that can be used to improve dialogue with customers. Today, marketing professionals can create individual purchasing journeys, analyzing the behavior of each customer and shaping their experience throughout their interaction with the brand.
Digital transformation into sales
The ability and precision in collecting a large volume of data on consumer behavior are not only useful for the marketing department. Sales teams can guarantee expressive results by using technology to understand the purchase flow and the mindset of consumers.
Examining each customer as an individual and studying their behavior from the first contact to the purchase journey should be a joint effort between the marketing and sales sectors. This practice allows you to improve performance through practices that include:
- determine the effectiveness of sales techniques and strategies;
- access valuable information such as the public profile that they are most likely to buy at certain times of the year.
The more data and more sources available for collection, the more market information can be extracted by Artificial Intelligence systems. In addition to the sales history, these resources are capable of establishing relationships, standards and identifying bottlenecks.
The result of this combination is the opening of competitive advantage. In addition to implementing these processes, it is the role of managers to ensure that their teams use the systems in the best possible way, so that they really work integrated.
Digital transformation into services
Before industry 4.0 and the digital transformation were a widespread concept, customers were already hoping for easy service and payment for the services or products chosen. Today, stores and banks have reached applications. Some do not even exist physically or on computers, they are only on cell phones.
Smartphones, electronic payment systems and applications designed to meet consumer demand have created a new reality. Virtually everything you want is just a touch away, from ordering a pizza to a doctor’s appointment.
With this, consumers expect more and more companies to adopt digital as their main means of doing business. The future of work is in the hands of technology and the changes brought about by it in our society.
Digital transformation in people management
The survival of a business is not only in the hands of customers and profitability. For a company to be able to produce, sell and trade, it needs a competent, motivated and experienced human asset. At this point, digital transformation contributes in many ways.
Composing a high-performance team starts with recruiting and must be constantly developed through training and development programs. That said, it is possible to list a number of technological resources that have completely changed the procedures related to the human resources sector. We can quote:
- artificial intelligence, capable of crossing job opportunities and suitable candidates for the position and culture of the company;
- interviews that can be conducted through videoconference;
- information systems that allow professional aptitude and personality tests to be carried out even from a distance;
- internal surveys that reveal demands for companies to structure benefit and incentive programs that really make a difference;
- the same surveys, combined with performance indicators, allow managers to identify which skills should be worked on to increase efficiency, resulting in training more appropriate to reality.
What is the role of managers in digital transformation?
In a transformative scenario, managers must be able to create ways for employees, customers, suppliers and work partners to visualize how the company will be different after going through these changes. Then, you must involve employees so that all of this becomes a reality.
At the same time, they must be able to identify which processes can be modernized or implemented. For example, an HR manager may suggest the use of remote recruitment. The marketing coordinator is able to structure a market research process so that the team can contribute to the creation of a new product.
Regardless of the measures adopted that are related to the digital transformation, it is essential that they are able to act in the implementation of processes and in the integration of employees in the face of changes.
How to define who should lead these changes?
Every corporate process needs to be led by an experienced and competent professional. It would be no different with digital transformation: for technology to be part of an expressive change, it must be combined with leadership.
Whoever leads these changes must have different thinking, ahead of its time, encouraging innovation and new business models. In addition, you must have the common sense to incorporate new technological methods to improve the experience of your organization’s employees, customers, suppliers, partners and other stakeholders.
That said, the ideal leader must fulfill some requirements. See what they are:
- have enough technical knowledge to promote integration between business needs and technology solutions;
- if you are a professional who is part of the company’s team, you must be a trusted person;
- professionals hired exclusively to lead the changes must be previously integrated into the teams;
- the digital transformation is also focused on the customer, so the leader must be able to understand the shopping journey, to visualize things through the customer’s eyes and understand how the transformation can be aligned to their needs and expectations;
- the professional must be willing to take risks since the transformation requires that the projects be tried before their final implementation, which means the possibility of failures;
- teams can be resistant to change, it is important that the leader is able to deal with resistant professionals;
- the digital transformation can be confusing for industry leaders, for this reason, they must understand their concept clearly and must be able to explain the organizational changes necessary for the company to adapt to industry 4.0.
- in digital transformation, everything changes quickly, so the leader must be able to keep up with the evolution of technology, preferably one step ahead of the competition.
What are the best practices to lead this process?
To implement the tools that come with industry 4.0, companies need to start by looking closely at their own business processes. The aim is to identify opportunities for improvement. Without these first steps, the adoption of new technologies risks not making a significant difference to the processes. In some cases, the company may lose its competitive advantage.
With that in mind, we have separated a set of good practices so that digital transformation can happen and be beneficial to the business.
Innovative culture
The most challenging aspect of digital transformation is not technology, but the people who need to embrace the changes managed by it. Digital transformation is much more than investing in technologies. It means changing the company’s culture, using resources to improve work processes and customer relationships. For this to be possible, the organization as a whole must adopt a mindset of continuous innovation and quality improvement.
Internal communication
Keeping communication transparent can be the key to the success of the digital transformation. Communicating the change to professionals makes it easier to understand the future of the organization, where the company is going, why it is changing and why these changes are important.
The reality of industry 4.0 requires companies to be more creative in the internal communication channels adopted, moving away from traditional channels such as e-mails and joining platforms more interactive – like internal social media. The goal is to allow the entire organization to communicate through a more open dialogue.
Team development
The development of talents and skills is a fundamental action for routine changes and one of the most important factors for the success of the digital transformation. That said, the company must invest in team education, so that professionals can evolve with the processes. In this process, it is the leader’s job to expose the opportunities that can arise when employees master new skills and create an environment that encourages learning.
Adoption of resources
To create real competitive advantages, change needs to be greater than just improving and modernizing processes: it must be innovative. Therefore, the adoption of resources must be studied and well planned.
The safest way to make good choices and really apply the digital transformation in the company is through a complete audit of the systems already used and those that can be implemented. The objective is to identify challenges and, above all, find opportunities.
Digital transformation means big changes for any company. When done well, it will result in a business more aligned to the demands of customers and resilient to keep up with the digital future, which evolves faster and faster.
Leading digital change requires that managers have a very clear vision of how it is possible to transform the company into a technological and innovative world and begins with an internal assessment to identify gaps, problems and areas that present difficulties.
It is worth noting that managers are crucial elements for digital transformation to happen since it requires cultural change, adaptation to market conditions and new technologies. Generally, the key to the survival of a business is to increase its clientele and, consequently, profitability. In this process, human assets are essential.
Without people management efficiency, the transformation can encounter bottlenecks. The change must be orchestrated. The adoption of processes and systems that have developed with industry 4.0 should include everyone involved in organizational processes. Are you and your company ready to start this revolution?
