The phrase ‘digital transformation’ has become something of a buzzword. It is, however, far more than that.
It has been described as “the profound transformation of a business and organisational activities, processes, competencies and models to fully leverage the changes and opportunities of a mix of digital technologies and their accelerating impact across society in a strategic and prioritised way,” – in other words it’s a process of using technology to radically change your business and its application is associated with change in all aspects of human society.
Digital transformation, rather than just supporting or enhancing tradition or existing methods, enables new types of creativity and innovation. Digital transformation does not focus on a single IT project, it describes a series of projects that together, will change every facet of an organisation, from back office operations to customer interactions. Making these different processes intrinsically linked is often the end goal.
The Global Centre for Digital Business Transformation says that “organisational change is the foundation of digital business transformation”. Changing the nature of an organisation means changing the way people work, challenging their mind-sets and the daily work processes and strategies that they rely upon.
These challenges present the most difficult problems but also yield the most worthwhile rewards. They allow businesses to become more efficient, data-driven and nimble, taking advantage of more business opportunities.
According to analysts ‘IDC’ digital transformation could be worth $18 trillion in additional business value worldwide and it is this that makes it so important.
Meanwhile, research firm Gartner’s CIO Agenda suggests digital business will represent an average of 36% of a business’s overall revenue by 2020.
The group’s report, Gartner’s IT Market Clocks for 2016: Digital Transformation Demands Rapid IT Modernization, found that 66% of companies doing digital transformation expect to generate more revenue from their operations, while 48% predict that more business will arrive through digital channels. Other reasons for doing it were to empower employees with digital tools (cited by 40%) and to reduce costs (cited by 39%). It’s clear that there’s no better time to embark on your own digital transformation journey if you want to reap the rewards down the line.
Businesses are focusing on how they work on every level. It is the technology that underpins all digital transformation projects. So, what sort of technology are businesses looking at and adopting? Well as time goes on, these technologies are constantly changing but many businesses are concentrating on the technologies that help them harness and make sense of the vast quantities of data they are sitting on, as well as preparing for trends like IOT, the Internet of things, and mobile technology.
The internet of things, which includes the smart devices we already see in our homes could see the way to smart cities and change for many how we live our lives. For businesses, analytics tools, as well as cloud computing which lets your store data outside your own data centre, are high up on the agenda. This could see the end to data centres. Focusing on collaborative tools, like file sharing, apps and mobile devices, that let employees work wherever they are and give them instant access to information is seen as the way forward. We already see this in smaller ways, for instance, have you ever noticed when say a gas engineer comes to check your boiler, they more often than not will be carrying a company device that enables them to check their analyses or check for parts or information etc, whilst with the customer, making their visit faster and more efficient.
For businesses, digital transformation can be a complicated process and finding the right strategy for your organisation can be one of the biggest hurdles to digital freedom.
In Deloitte’s report titled ‘Strategy, not technology, drives digital transformation’, it discusses the merits of looking to a strategy for rolling out a path to digital maturation rather than the technology itself.
The report goes on to say, technology changes and adapts over time and it’s likely that in a few years, the technology your business needs will change. However, it’s vital that the way you implement that technology is watertight to prevent any hiccups along the way.
The report also explains the importance of scopes and objectives in a digital transformation strategy, with the technology the last consideration. It’s the technology that enables the processes to be fulfilled, but it’s the way they’re implemented that will have the biggest impact on company success.
It added that digital strategies can’t just focus on the online world, but need to bridge the gap between online and offline worlds. For example, a museum needs to consider offering an enthralling experience for both the customers physically visiting, but then continue that experience through mobile and social platforms.
To succeed in creating these new digital experiences requires a shift in skillsets, and embracing a collaborative culture, where people pool ideas and share expertise. The companies that are most likely to succeed in digital transformation are those with open minds that are happy to take risks.
But Deloitte added that having the resources available to them is also crucial. Leaders at forward-thinking businesses must have the tools at their fingertips to develop skills and know-how across their entire organisation.
The analyst firm, Forrester, recommends a dual-path approach, allowing IT to achieve long term transformation goals and reach a number of quick-wins to bring about business buy-in.
Ted Schadler an analyst at Forrester wrote in his report, titled ‘Take Two Technology Roads to Digital Experience Success’, “that a business should begin by prioritising investments that give benefits to customers and generate business value. From there, you can then split the strategy into the two paths of quick projects and longer-term transformation.”
When describing the quick-win path he highlights: “On this path, you will turn on functionality you aren’t using and extend your existing platform with new software. The cloud is your best way to layer in new functionality without rebuilding your existing platform.”
And for the longer-term path, he underlines: “You will define, select, and implement a modern platform to deliver long-term agility and capabilities. The cloud is also your friend here: It’s the future of digital experience platforms.”