We hear a lot about digital transformation these days, but the term is seldom defined. Rather, the focus tends toward the latest digital technologies to impact enterprises—mobile devices, social networks, cloud computing, Big Data analytics, etc.—with very little direction regarding how to actually adopt transformation. Worse, some people believe digital transformation is only about cool apps—quelle catastrophe!
Digital transformation is the number-one topic on the strategic agenda for most companies right now. Fear of being disrupted, falling into the Big Data black hole, or missing out on some incredible new business model is keeping many awake at night, and the phrase “adapt or die” may ring some bells.
My advice? Don’t be put off by the word digital. Digital transformation is transformation by any other name; it’s just the transformation flavour du jour. We are, however, increasingly seeing nearly every business become (at least to some extent) a technology business.
Let’s start by defining transformation: Transformation is a fundamental change to the entire workings of a business, from its operating model to its core infrastructure—from what it sells to whom and how it goes to market. A transformation program impacts every function of a business, from procurement, finance, and human resources to operations and technology, sales and marketing.
There are three key drivers of transformation: changing consumer demand, changing technology, and changing competition, all of which create an interdependent ecosystem.
Digital transformation is not about technology. Rather, it uses technology as a means to an end and goes beyond business.
Digital transformation is as much about the transformation of how individuals work and the cultures of organisations as it is about technology. Its most difficult task is to change the way we think.
To simplify, digital transformation largely comes down to three main areas of transformation:
Transforming the customer experience
- Digital technology has changed the game, but customers have changed the rules. Customers demand simple, seamless, personalised experiences across any channel, anytime, anywhere, and on any device. Customers now choose their own journey in multiple channels at their convenience. The pattern that emerges is not linear, as in the past. Big Data allows companies to sense and respond to customers’ needs in real time and predict the best way to engage with them.
Transforming business models
- Driving competitive advantage by expanding beyond traditional industry boundaries and transforming from an asset to a service/outcome-based organization is essential.
Transforming operational processes
- Although transformed customer experiences are the most visible—and arguably, the most exciting—aspects of transformation, companies are also realizing very strong benefits from transforming internal processes through process digitization, worker enablement, and performance management.
Predictably, many analysts, technology companies, and consulting organisations are ready to help you define your transformation journey. Each one can offer an informed perspective on the roadmap, solutions, and the best way of doing things for your business.
This article was originally published by Digitalist Magazine.