Digital Transformation: Everything You Need to Know
It is no secret that new technologies are revolutionizing how organizations function, including their legal departments.
Faced with profound global changes stemming from the pandemic, companies have no choice but to adapt if they want to survive. And because technological advances are rapid, organizations must show flexibility in their integration of change on all levels.
Today, we know that companies that have adopted digital tools have six times higher growth than those that have not taken the digital transformation turn (according to a study conducted by Roland Berger in 2014). In the age of remote work and dematerialization, the integration of digital in all company strata is no longer an option but a necessity.
Definition and History of Digital Transformation
Digital transformation is the process that allows companies to integrate all the new technologies available within their activities. This transformation forces companies of all sizes to review their organization and reinvent their processes. In short, digital transformation is the way a company integrates digital resources and technologies into their internal and external activities to create new business strategies and competitive advantages.
Digital transformation enables companies to maximize their potential and leverage technologies through simple and efficient processes and systems.
Surprisingly enough, the history of digital transformation dates to the 1940s, with Dr. Claude Shannon and his discourse “A Mathematical Theory of Communication,” which explored the early notions of digitization. Over the past 80 years, digital transformation has evolved from microchips to artificial intelligence, the Cloud, and Big Data.
Digitalization and the pandemic
The COVID-19 pandemic changed the world of work dramatically. With the global rollout of remote work, organizations hesitant about digital transformation couldn’t continue to avoid digital tools and technologies.
According to a survey carried out by Mckinsey, the pandemic sped up the adoption of digital technology by several years. Many organizations were pleasantly surprised to find digital transformation was easier and more straightforward to implement than they previously thought. Furthermore, companies overestimated the time needed to make these digital changes. Two years later, it is clear that a majority of these changes are here to stay.
Not only is digitalization making organizations and their internal departments more efficient and productive, but digital transformation is also an essential element for any company trying to maintain a competitive edge.
Ultimately, companies mustn’t allow their fears or misconceptions about digital technology to get in the way of change. Change can be difficult for all parties involved – including employees, managers, and organizations as a whole – but necessity will drive digital transformation.
Businesses may be slow to accept the reality that digital technology has become indispensable. However, organizations that embrace this reality are likely to succeed during these times of global economic uncertainty.
“The biggest part of our digital transformation is changing the way we think.” — Simeon Preston, Bupa
Digital Transformation and Organizational Culture
Not only does digital transformation shape the day-to-day operations of a company, but it also has a direct impact on organizational culture as well. With digitization comes a broader shift to an agile and digital culture.
Taking the digital leap is not without its potential problems, including resistance to change and lack of technical IT skills within the team. This is why a cultural evolution- in addition to thorough training- is necessary for organizations who are undergoing digital transformation.
The digital shift allows organizations and their legal departments to become more data-oriented and results-focused. Introducing new technologies also encourages employees to be more innovative, solve problems more creatively, and reach outside their comfort zones.
Ultimately, teams who embrace digital transformation are more creative, more reactive in the face of adversity, and are overall more likely to succeed in the long term.
Legal Departments: The New Business Partner
While each organization will have its own needs, legal departments are learning how to harness the power of digital tools to take on a more strategic approach that improves their operations and helps their business run more efficiently. With legal teams better equipped, general counsel have more time to focus on and implement a more informed action plan. As legal departments unlock more time and energy using digital solutions, they are better positioned to bring their organization more value than ever.
Using the right tools (such as Contract Lifecycle Management) optimizes and dramatically improves the legal department’s performance. As the legal field continues to adopt digital solutions, insight and data will become more readily accessible to both in-house legal teams and business leaders.
Business executives and other key decision-makers will have access to information that helps them make faster, better, and more impactful decisions. This new web of data will significantly help organizations prepare for future challenges and further refine in-house counsel team operations.
“Digital transformation is all about unlocking value in your business processes and releasing it back to customers – as well as being agile enough to use data and analytics to create new, innovative experiences.” — David Macdonald, Executive Vice President and Chief Sales Officer, SAS
The future of legal departments
Over the past couple of years, legal departments have rapidly evolved and stepped into a much more reactive role within their organizations. The emergence of legal tech and automatization of time-consuming tasks are allowing general counsel to take on a more strategic approach and follow a more business-centric work model.
As legal tech continues to develop, general counsel will increasingly implement automated solutions to make their teams more agile and reactive. This future of legal departments will help in-house counsel teams focus on more strategic tasks and prepare them to handle the challenges that lie ahead. Legal departments will also be able to analyze data to understand better what works, what doesn’t, and which aspects of their business are most effective in supporting the end goal.
The future of in-house legal departments is clear: by teaming up with innovative legal tech vendors, general counsel can achieve a more proactive workforce along with more predictability and profitability.
Conclusion: Digitalization is Here to Stay
When it comes to technology in legal departments, there is no going back. Their reliance on physical processes and the status quo is relegated to the past. General counsel are now focusing on becoming more agile and leveraging technology to become leaders within their organizations. Legal departments will continue to thrive with digital transformation, and no longer be a roadblock to business agility.
Although many businesses (and legal departments in particular) were slow to make technology adoption a priority, the pandemic gave a much-needed push in the right direction. Legal departments across the globe have come to realize that technology and business agility are crucial for their success. The use of cloud-based and other digital solutions will continue to gain momentum as more businesses enable a culture of innovation within legal departments.
This new digital era is empowering general counsel to make their value visible and become true leaders within their organizations. Legal departments will continue to revolutionize how they work and win back time using solutions such as Contract Lifecycle Management or Litigation Management.