Digital Transformation – A Journey
A lot has been written, said and discussed about Digital Transformation. Let’s look at it with a simplistic view.
What is Digital Transformation?
In a simpler definition, digital transformation is reimagining the business process considering the technology enablers available. It’s for the organizations to bring people, process and technology together under the realm of digital transformation to create values for the customers in the fast-paced digital world. It forces the enterprise to think how to do things better and faster with adoption of technology. Digital transformation is enabled by technology, however successful transformation is beyond technology adoption or deployment. Digital transformation is a journey, its’ not an event. So digital transformation is much more than just being “Digital”.
Why Digital Transformation?
The IDC report ‘FutureScape: Worldwide CIO Agenda 2016 Predictions’ emphasized that, “One-third of the top 20 firms in industry segments will be disrupted by new competitors within five years, and that it’s a matter of “transform or perish.”
There are many reasons for enterprises to adopt digital transformation as this is no more a choice, an imperative rather. We are moving through an era where services need to be better, cost effective, faster and connected. At the core of digital transformation, it’s enhanced customer experience, faster service maturity/efficiency and increased profitability/revenue that matter.
Customer experience: Whether external customers or internal employees, people have already adopted digital practices in all facets of their lives, from shopping online via their mobile devices to adjusting their home thermostat remotely. They are waiting for businesses to catch up.
Efficiency: digital transformation will make enterprises more efficient. Research shows, “Nine out of 10 IT decision-makers claim legacy systems are preventing them from harnessing the digital technologies they need to adopt to grow and become more efficient.”
Profitability: According to the MIT Center for Digital Business, “Companies that have embraced digital transformation are 26 percent more profitable than their average industry competitors and enjoy a 12 percent higher market valuation.”
Revenue: According to a Forrester Research report, the C-level predicts that nearly half of their revenues will be driven by digital by the year 2020. As competitors undertake digital transformations, it’s no more a choice.
What drives Digital Transformation?
Often, we think of technology, when we talk about digital transformation. Is it technology which drives digital transformation? The general feeling is that with technology changing at a faster pace, it’s easy to assume that technology disruptions drive the digital transformations to a large extent.
However, I believe, its digital strategy that drives digital transformation. Does this mean technology doesn’t have any role to play in digital transformation? Of course, it does. But technology is an enabler for digital strategy and the same can’t be ignored. Digital transformation should be led by both strategy push and technology pull. This can be further supported with a recent study by MIT Sloan and Deloitte which stated that it may not be technology, but rather strategy, that helps create digitally transformed companies. The MIT study stated that “the strength of digital technologies—social, mobile, analytics and cloud—doesn’t lie in the technologies individually. Instead, it stems from how companies integrate them to transform their businesses and how they work.”
What are the building blocks for Digital Transformation?
Digital transformation is a process, one which requires a structured framework. A framework is defined ‘as a structure with parts that fit together, join together and work together.’ The process of Digital Transformation requires organizations to challenge their core assumptions, to think differently about every aspect of their strategy, culture, structure, systems and processes and above all their customers.
Following are considered as the building blocks for digital transformation:
- Identify business drivers
- Establish a digital strategy
- Digital readiness assessments
- Build capabilities
- Innovate, Innovate and Innovate
- Apply Technology – The enabler
- Create disruptions
At the end, successful digital transformation delivers defined and measurable outcomes:
- Lower cost
- Increased efficiency
- Higher revenue
- Enhanced user experience
Let’s connect to experience the journey of Digital Immigration and Immersion with uBeA Consulting.
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