Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers.
Digital transformation is imperative for all businesses, from the small to the enterprise. What’s not clear to many business leaders is what digital transformation means. It’s also worth noting that today’s organizations are in different places on the road to digital transformation. If you are feeling stuck in your digital transformation work, you are not alone.
This year, the COVID-19 pandemic has brought new urgency to meeting digital transformation goals – and forced many organizations to speed up transformation work.
What is digital transformation?
In general terms, we define digital transformation as the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers.
Beyond that, it’s a cultural change that requires organizations to continually challenge the status quo, experiment often, and get comfortable with failure. This sometimes means walking away from long-standing business processes that companies were built upon in favor of relatively new practices that are still being defined.
The “why” of your organization’s digital transformation might be around improving customer experience, reducing friction, increasing productivity, or elevating profitability.
Why does digital transformation matter?
A business may take on digital transformation for several reasons. But by far, the most likely reason is that they have to: It’s a survival issue. In the wake of the pandemic, an organization’s ability to adapt quickly to supply chain disruptions, time to market pressures, and rapidly changing customer expectations has become critical.
At a recent MIT Sloan CIO Symposium series event, IT leaders agreed that consumer behavior has quickly shifted in many ways since the start of the pandemic. Improving customer experience has become a crucial goal – and thus a crucial part of digital transformation. Hinchcliffe calls seamless customer experience “the most important discriminating factor for how a business will perform.”
Other areas of digital transformation efforts that COVID-19 pushed higher on CIO agendas:
- Furthering the reach of customer support via tools including chatbots
- Automation tools for resilience reasons
- Radical housecleaning of redundant or conflicting systems
What does a digital transformation framework look like?
Although digital transformation will vary widely based on an organization’s specific challenges and demands, there are a few constants and common themes among existing case studies and published frameworks that all business and technology leaders should consider as they embark on digital transformation.
For instance, these digital transformation elements are often cited:
- Customer experience
- Operational agility
- Culture and leadership
- Workforce enablement
- Digital technology integration
What role does culture play in digital transformation?
In recent years, IT’s role has fundamentally shifted. Rather than focusing on cost savings, IT has become the primary driver of business innovation. Embracing this shift requires everyone in the company to rethink the role and impact of IT in their day-to-day experience.
Although IT will play an important role in driving digital transformation strategy, the work of implementing and adapting to the massive changes that go along with digital transformation falls to everyone. For this reason, digital transformation is a people issue.
Digital transformation initiatives often reshape workgroups, job titles, and longtime business processes.
What drives digital transformation?
An important element of digital transformation is, of course, technology. But often, it’s more about shedding outdated processes and legacy technology than it is about adopting new tech. It’s also about enabling innovation.
If businesses want to evolve with the rapid pace of digital change today, they must work to increase efficiency with technology wherever possible. For many, that means adopting agile principles across the business. Automation technologies also help many IT organizations gain speed and reduce technical debt.
Here are eight key digital transformation trends that business and IT leaders needed to be aware of in 2020:
- Rapid adoption of digital operating models, including integrated cross-functional teams.
- A shakeout as those that have invested in big data governance and analytics leapfrog their competitors.
- Better use of AI and machine learning.
- Continued merger and acquisition activity in the IT outsourcing industry.
- Consultancies forming new digital partnerships.
- Expanding public cloud adoption.
- New digital transformation success metrics.
- More attention to long-term value of digital initiatives
As businesses formulate their own digital transformation strategy, there is much to be learned from CIOs and IT leaders who have already begun their journeys.
The key to a successful digital transformation in the IoT era is understanding its full potential.
Find out more at https://enterprisersproject.com/what-is-digital-transformation