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What is digital transformation?

What is digital transformation?

Digital transformation involves using digital technologies to remake a process to become more efficient or effective. The idea is to use technology not just to replicate an existing service in a digital form, but to use technology to transform that service into something significantly better.

Digital transformation can involve many different technologies but the hottest topics right now are cloud computing, the Internet of Things, big data, and artificial intelligence.

But it’s not just about the technology:

Changing business processes and corporate culture are just as vital to the success of these initiatives. Digital transformation projects are often a way for large and established organisations to compete with nimbler, digital-only rivals. These projects tend to be large in scope and ambition, but are not without risks.

While digital transformation is one of the most commonly-used — and over-used — phrases in the IT industry, definitions vary. What everyone can agree on is that, beneath the hype, the fluff and the confusion, digital transformation involves some pretty important changes to business culture.

Executives believe that level of investment is already leaving a mark. 46% think half of their revenue will be influenced by digital by 2020, according to analyst Forrester. The World Economic Forum suggests the value of digital transformation for both society and industry could reach $100 trillion by 2025.

Yet it’s not all good news. Forrester recently reported that digital transformation efforts are running into roadblocks amid confusion, delusion, and resistance to change.

To critics, digital transformation simply offers tech vendors another opportunity to rebrand their offerings: it’s not uncommon to see systems and services being sold as the answer for digital transformation. This kind of over-selling helps explain why Gartner believes digital transformation is approaching the trough of disillusionment.

Tech workers also express cynicism about grand talk of digital. No technology worker spends their working day digitally transforming, rather than coding, programming, and developing. And the phrase can be applied so broadly that it becomes effectively meaningless.

Digital transformation: Closing the gap between innovation and execution, these are the biggest challenges of digital transformation.

Why does digital transformation matter?

Such disillusionment might suggest there is little to be gained by focusing on digital transformation. But beneath the buzzwords there lies a crucial concept: digitalisation is helping smart entrepreneurs and pioneering executives to change the established economic order and the effects are everywhere.

From Amazon’s influence over retailing to Facebook’s impact on publishing, traditional firms and sectors are being challenged by nimble, digitally-savvy operators. Yet, while almost three-quarters of business leaders are aware their organisation is under threat from disruption, many are not taking the risk of change seriously.

Only half of enterprises see start-ups as a serious threat, according to research from Dell EMC, and almost one in ten do not believe they have any challengers in their market. In fact, 7% of executives say they are not concerned about the threat of digital disruption whatsoever. In these cases, a serious wake-up call is required.

What does digital transformation look like?

Technologies from big data to cloud and from the IoT to AI are helping entrepreneurs to develop new business models and disrupt the established way of running operations.

So, call it what you want, but digital transformation is very much a thing – and it is something that many executives in traditional firms are still struggling to get their heads around. While start-ups thrive through their new ways of working, their innovative use of data, and their integrated approach to advanced technologies, too many traditional organisations – both in the private and public sectors – are still stuck in legacy mode.

These enterprises are fixated on policy and process, rather than information and insight. Such slow-moving firms are getting left behind. Gartner says two-thirds of business leaders believe their companies must pick up the pace of digitalisation to remain competitive.

However, quickening the speed of development is tough. Digital is often viewed as a dark art that only a few experts understand. In too many cases, business leaders fill this knowledge gap with highly-paid consultants who deliver the hype of digital transformation instead of measurable business value. Case studies of projects that deliver true digitalisation are thinner on the ground than the experts have you believe.

What is included in a digital transformation project?

A genuine digital transformation project involves fundamentally rethinking business models and processes, rather than tinkering with or enhancing traditional methods. Digitalisation is not, as is commonly suggested, simply the implementation of more technology systems and services. Digital transformation should create something new, that might be an improvement to customer experience (for example by allowing customer self-service), streamlining the supply chain, or using insights from data to offer new products.

This creative requirement remains a tough ask for business leaders. Most organisations do not have a major problem generating new ideas, but many firms fail when it comes to implementing fresh business models or turning good ideas into organisational objectives, according to research from Cass Business School.


This gap between innovation and execution helps explain why digitalisation and disruption are often seen as the preserve of nimble start-ups. But it doesn’t have to be this way – there are great examples of digital transformation in the enterprise sector, too.

We have to realise, time is running out faster than we might think to jump on the Transformation wagon, Digital Transformation of Business are rapidly taking place on a vast level! Don’t fear the change and take this new Digital era head on!


Reference: Zdnet.com


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