If you work in technology and don’t live in a cave, it is likely you’ve heard about digital transformation. We’ve all been there and it is likely it didn’t really mean much to you, so we’ve broken it down.

Digital transformation is imperative for all businesses, from the small to the enterprise. Ask anyone, and that’s how today’s businesses can remain competitive and relevant as the world becomes increasingly digital. What’s not clear, is what digital transformation means.

  • Is it just a catchy way to say moving to the cloud?
  • What are the specific steps we need to take?
  • What parts of our business strategy need to change?
  • Is it really worth it?

Digital transformation changes things

What is digital transformation?

Because digital transformation will look different for every company, it can be hard to pinpoint a definition that applies to all. However, 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.

Why does digital transformation matter?

There are a number of reasons that a business may undergo digital transformation, but by far, the most likely reason is that they have to. It’s a survival issue for many.

Digital technologies are changing the face of business. And this change is accelerating faster than the pace of transformation in organizations. To transform a large organization takes a significant amount of time, a huge amount of resources and a cross-functional set of business skills. Gartner predicts that through 2017, 70 percent of service provider-led digital business transformation will fail due to lack of business model innovation that delivers quantifiable business outcomes, whereas 70 percent of successful digital business models will rely on deliberately unstable processes designed to shift as customers’ needs shift.

However, change is also incredibly powerful and useful. It helps us do things better, more efficiently and with better results. When it comes to digital change, technology is constantly making such rapid leaps forward that organisations must adapt to continue to keep up with competitors.

Most organisations are complex in structure. Work is wide-ranging and takes place in multiple locations with a variety of different software and hardware. To move forward they must embrace digital change or risk getting left behind with consequences on costs and further pressure on service delivery. Digital transformation allows the centralising of data and access to the data in a way that improves agility, innovation, and efficiency. It allows organizations to understand that everyone is a contributor to both the organisations, and the most productive ways of working.

What does digital transformation look like?

Although digital transformation will vary widely based on organizations’ 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: improving and enhancing customer experience is the key driver for digital transformation. By making your processes leaner and more efficient, it is theorised that the time-savings and effectiveness translate into more satisfied customers.
  • Operational agility: being able to move faster, make changes that can keep up with customer and organisational demands is another digital transformation element.
  • Culture and leadership: perhaps the most crucial internal factor, but also the most difficult to execute and measure. Resistance to change is a constant and expected barrier to digital transformation, so the impact and management of the changes have to be planned and executed perfectly.
  • Workforce enablement: besides planning and strategising, having the correct tools in place, including training and support resources is critical to helping your workforce embrace the change.
  • Digital technology integration: last, but not least is integrating your new tech into your process and existing systems, so that you have a seamless transition of the process.

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. Nextgov reports, “Around three-quarters of the $80 billion the federal government spends on information technology each year is used just to keep legacy systems running.”

There are many drivers for digital transformation, but in today’s competitive world, it seems that disruption and the startup industry’s aggressive push into established markets are forcing companies to adapt. The complacency of yesteryears is gone, and we’re heralding the new dawn of technology.

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