In this series of posts, I will take a deep dive into Digital Transformation – the word/feeling/term that has taken the world by a storm. I have this word being referred to at lunches, coffee catch ups, and informal meets round the street corner and not to forget in almost all formal leadership summits. Hence I felt it will be very useful for me to indulge further upon this subject for the sake of all you netizens. In this series of posts, I will look through the evolution of the digital economy and then follow it up with its elements, approaches, areas, Strategies, industries specific implementations and last but not the least its importance beyond technology.
Digital transformation is the thoughtful transformation of business and organizational 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 prioritized way, with present and future shifts in mind. Just to keep it simple, an alternate definition would mention it as something that refers to converting processes, activities and models to meet digital economy requirements until the company is a fully networked digital organization.
Businesses have always been changing and innovating, technologies always came with challenges and opportunities, regulations and ecosystems have always evolved. That’s nothing new. It’s in the degree of interconnectedness and of various accelerations, which require profound enterprise-wide change, that digital (business) transformation is to be seen as more than a buzzword but as a challenge, force and most of all opportunity for organizations that will enable them to achieve the core business competencies they need to succeed in rapidly changing environments. So Why is it needed? Let us see below.
We need to make sure we speak the same language and it’s important to emphasize that digital transformation is not just about:
- Digital marketing, even if that’s an important part of the business activities and if it’s the context in which digital transformation is often used.
- Digital customer behavior, although it plays a role and customers are increasingly ‘digital and mobile’.
- Technological disruptions because the disruptions are always about customers, workers, markets, competitors and stakeholders, even if related to technological evolution and knowing that ’emerging’ technologies indeed can have a ‘disruptive’ effect.
- The transformation of paper into digital information as originally meant nor the digitization of information (flows) and business processes, which is simply a condition sine quod non.
Components of Digital Transformation: The basic seven elements of digital transformation that are required for you as an organization to lead a digital change is below.
- Leadership and Vision: It’s required for you as an organization to inculcate the thought process and clear vision in leadership. This particularly means that the leaders and management must stimulate the right digital culture. They should focus on improving the organizations operations, revenue, customer experience and competitive position. They should have holistic view of the digital threats and opportunities. They should be able to utilize the collective intelligence to reshape the competitive landscape.
- Formulating strategies: The organization should be able to define the outcome or result to help achieve the business goals. It should then work backwards to make a compelling digital transformation strategy. It should optimally harness technologies to deliver the value proposition. It could then utilize the niches like augmented reality, geo-location, and social media integration to extend the overall capabilities of the journey
- Information Governance: The organization should have formulated a strong governance plan and apply a strategic approach and then move to cloud applications to expand the reach
- Focus on Customer Journey: The organization should be able to identify customer needs with an accurate study of customer behavior and then should diversify customer experiences by utilizing the customer data, advanced analytics, online customer surveys and data mining tools.
- Define Technology Road map: The organization should align the strategic priorities towards long term planning before the actual tool investment with a well-defined technology road map. This should be followed up to enhance the existing technology stack with the latest tools to match current and future business needs.. This will help leverage technology to increase RoI, improve product and service portfolio, boost productivity and enhance customer satisfaction
- Business Disruptor: Businesses need disruptive elements like digital automation, collaboration tools, and enterprise analytics platforms. These help optimize, evolve or transform the entire value chain. Disruptive elements help organizations by modifying or replacing told methods with more faster and integrated ways of working across all the levels.
- Utilizing Technology: Big data allow businesses to have an incredible amount of data to analyze and guide business decisions. AI carries out precise predictive or prescriptive analysis for active strategy development
In overall essence the components help seek your way around the digital transformation to drive the digital way of change for your business.
Let us also quickly take a look at the general challenges that we face in the digital transformation journey so as to keep them in mind when we look at key approaches.
The right approach to digital transformation hence allows companies to adopt new technologies that meet the ever-increasing customer expectations. Additionally, cultural transformation is also critical as part of the digital transformation process. It must align with organizational norms along with their risk-taking capability to define and deliver compelling customer experiences. Based on these experiences, the new business models and operational processes are derived, which, in turn, drive the investments in technologies.
Stay tuned…. Part 2 of this foray, we will look key approaches to Digital transformation. Please feel free to review my earlier series of posts.
- AI-ML Past, Present and Future – distributed across 8 blogs
- Machine Learning – The Primer – distributed across 5 blogs
- The World of IoT – distributed across 4 blogs