Digital transformation is a very commonly used term in the IT world. It has become so common that employees and even some employers do not fully understand what the term means, and hence it leads to confusion while changing processes. So what exactly is digital transformation? Read the research blog to find out what it means to go through a digital transformation for your company and how it is becoming a necessity in today’s competitive world.
What is Digital Transformation?
When it comes to defining digital transformation, things get a little complicated. This is because the process of digital transformation is different for every company.
In general terms though, digital transformation can be defined as the integration of digital technology into every single area of any business. This results in fundamental changes in the way organizations work and how they deliver their goods and services to their customers.
It involves the use of various digital technologies that will help companies remake a process so that it becomes more efficient. The main idea behind digital transformation is to use technology to transform any existing service into something infinitely better and easier to use.
The process can involve many different technologies, but the ones that are being used the most are cloud computing, the IoT (Internet of Things), big data and AI.
Digital transformation is more than just upgrading the technology that an organization uses. Changing the business culture and environment to adopt to these technological advances is also a very big part of the process becoming successful.
Basically, digital transformation is the process of using upgrades in today’s digital technologies to create or modify business processes, its culture, and customer experiences. This is done so that the business can meet the changing business and market requirements.
It is the opportunity to re-imagine and reinvent how companies conduct their business and how they engage with their customers by using the best available technology in hand.
The Importance of Digital Transformation
There are many reasons as to why companies are taking on digital transformation, but the most common and likely reason for this is that companies do not have a choice if they want to survive in today’s competitive world. It becomes a necessity. No business wants to transform by choice – digital transformation is an expensive, extensive and tricky process. But if the company has not evolved in a while, their processes become old and outdated, and the business suffers. Hence, digital transformation becomes a necessary action to prevent the company from dissolving.
Business executives have recently reached the conclusion that digital transformation is a long-term investment. Each company is at a different place in their digital transformation journey, but speed has become crucial for all. There are many IT executives and leaders who have to deal with the pressure of showing that their company’s digital initiatives are continuous and that they are constantly improving to increase the agility and speed for the entire organization.
It has become almost a compulsion for IT executives today to match the pace of change in today’s rapidly evolving organizations. Bold action needs be taken and companies have to support experimentation and pathfinding in new and creative ways, while managing the daily goings on such as taking care of any and all operational issues, delivery of services and any emergencies that may occur.
Why do companies need digital transformation? The answer is simple; it is to improve customer experience, which has become the most important goal for organizations, which is why it is a very important part of digital transformation as well. Customer experience is now the most important factor in determining how a business performs today.
With digital transformation, companies take a step back and revisit all their processes starting from internal systems to customer interactions that take place both online and in person and optimize their processes.
What Drives Digital Transformation?
The main aspect that drives digital transformation for companies is that it encourages businesses to reconsider everything about their operations. This includes all their existing ideas of teams and departments that may be considered traditional. A lot of departments are now working together instead of being separated by job role to create a positive experience for the customer. Things like the company’s social media presence , for example, can include both service and marketing, that is tied together by a digital platform (customer’s preferred platform). It gathers customer information, and has the ability to create personalized journeys for each one, while at the same time routing all customer queries to your company’s service agents.
The Potential of Digital Transformation
One of the most important parts of digital transformation is to be able to comprehend the potential of the technology your company is using. What is the technology really capable of? How can your business adapt and change its operations and processes to make the most out of your investments in technologies?
With the help of digital transformation, customer service processes have been drastically changed, and so has the approach of the companies. In early days, businesses would have to wait for customers to approach you with any queries or issues that needed to be resolved. This could be done in person or by calling the customer care department. But, with the rise of digital media, especially social media, this service has also transformed, just like how it has transformed advertising, marketing and even sales. There are a lot of companies that have embraced the power of social media and used it to extend their offerings to their target audience by meeting them on the platforms of the customer’s choice.
Real transformation comes when you look at all available technologies and consider how adapting your business to them can give customers a better experience.
The Cons of Digital Transformation
There are many reasons why digital transformations are failing. Some of them include:
- Poor leadership
- Lack of communication between IT and the business
- Lack of employee engagement
- Substandard operations
The main factor that leads to a failed digital transformation is the organization’s obsession with a big change in a small period of time, their focus on cost cutting to drive business, as well failure to loop in the business with the transformation. The pressure to show results creates wrong expectations about how quickly digital transformation can be achieved, and when the investments do not pay off in record time, it calls for a failed process.
Another problem is that organizations tend to gravitate too quickly and start to use technology that will help them to cut costs. Downsizing from a hundred people to a team of thirty is all good, but the thirty people who have been retained do not usually help you meet the business outcome you are going for.
Moreover, approaching digital transformation as a technology journey independent of the business is a recipe for failure.
All those who criticize digital transformation say that the entire process just simply offers tech vendors another opportunity to rebrand what they have to sell. It is actually quite common to see many systems and services that are being sold as the answer to digital transformation.
There is also a lot of cynicism among tech workers about the grand talk of digital. There is no one who works in the tech world who spends their entire working day digitally transforming instead of coding, programming, and developing. The phrase digital transformation can be used for so many things that it is applied so broadly that the term itself becomes effectively meaningless.
Conclusion: Does Digital Transformation Ever Stop?
The answer is simple: it doesn’t.
There are a lot of working professionals in the IT world who make the mistake of thinking that digital transformation is a discrete project. But like any transformation, true digital transformation is a journey to have and not a destination you can reach.
Even today, digital transformation remains a confusing concept which involves delivering value to the business and its customers in new and unexpected ways.
There is a constant demand for change, and while it keeps coming, there are more than twenty percent of business and technology decision makers that believe that their digital transformation process is already complete. There is no way it can be complete and constant strategic iteration is the only way companies can stay ahead of the game. The change led by digitization is likely to go on forever.
How is data transformation evolving as a concept?
The form of digital transformation will only continue to evolve, which means that the process of defining digitization will always stay complex and contested. There is one thing that we can always be sure of though, which is that transformation, in whatever shape or form it may take, is here to stay. This means that all senior teams in organizations need to build a sustainable business strategy to manage it efficiently.