Digital transformation – let’s not be fooled by cliché
05.07.2021 - Read in 6 min.
Digital technologies are changing the world, us and our lives. What does digital transformation mean in business? Why is digital transformation necessary to survive in today's world?
It is being said more and more, including by the IT industry itself, that the term “digital transformation” is outdated. The reasons for this vary, from calling it “shabby”, to the misuse of the term by incompetent people who want to “shine”. There is a lot of truth to this, but by coincidence isn’t it also an “expired” phrase that has not yet really taken root in its full meaning?
Who is digital transformation for?
We can carry out digital transformation in a computer manufacturing company, in a bank, at a shoemaker or in a greengrocer. The introduced changes may concern the tools used, but also entire processes. IT helps to understand what is happening in the company or at the production stage, without changing the structure of the work itself. As for the goal, this process is to support survival in a new, changing environment. The transformation doesn’t only include swapping fiscal printers for those equipped with a liquid crystal display and a modem, but in-depth consultations on how to operate better and more efficiently in the organization, and what tools will best serve this purpose. Such consultations are the essence of digital transformation and allow it to be carried out effectively in its entirety.
Digital technologies are changing the world, us and our lives. Not all changes that we undergo are conscious. An apt example is the popularity of smartphones, which is not only the choice of customers, but also an imposition to choose a certain model of the path of change by hardware and software manufacturers. This does not mean that old phones based on Symbian or EPOC systems would be better today – they also digitally changed the world and are part of a dynamic digital evolution.
Is the excess of tools and technologies a barrier to transformation?
It is worth considering the issue of barriers to technological development resulting from the excess of tools and technologies. It is quite common to believe that not knowing what to choose from the range of possibilities and products, customers remain passive, fearing to make wrong decisions. An additional difficulty, then, is that digital transformation tends to be different for different companies and industries. It is definitely a process calling for a lot of consideration and one that should be carried out according to a specific plan and with the intended end result to be achieved.
“When digital transformation is done correctly, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.”
What does digital transformation mean in business?
Simply put, it is transforming businesses by changing the way they operate and adopting digital technologies to streamline their processes. Transformation is a mindset that requires continual improvement by challenging the status quo, experimenting with new ways of doing things, and recognizing those changes as being appropriate in this ever-changing digital world.
There is no single technology or software facilitating digital transformation. It is a combination of cultural and technological changes that lead to improved efficiency and effectiveness of the company. True digital transformation requires renewing most, if not all, areas in an organization, from the tools and applications it uses, to its supply chain and workflow, to customer engagement, to employees and their skill sets.
Why is digital transformation necessary to survive in today’s world?
If there is a golden rule on how to stay in business, it is the one that applies to evolution in general:
“Adapt to changing market conditions or you are at risk of extinction”.
There are many reasons why businesses need to digitally transform, but the most important of them is survival. This is due to the fact that companies that ignore the current state of the market are unable to meet new customer expectations and are often replaced by new businesses that do so.
“Over the past ten years, IT has changed the way people work. The next ten years of IT will be about transforming your company. ”
Aaron Levie | CEO of Box.
With the rapid digitization of society, organizations must change much faster. Research and statistics clearly indicate the need to undertake activities leading to digital transformation:
● Digital transformation could soon be worth $20 trillion in additional business value, according to IDC analysts.
● At least 40% of all companies will cease to exist in the next 10 years if they do not learn how to transform their businesses to adapt to new technologies.
● The agenda of Gartner’s CIO suggests digital business will account for an average of 45% of companies’ total revenues by 2025.
● Gartner’s IT market metrics for Digital Transformation and Rapid IT Modernization demonstrate that 66% of companies undergoing digital transformation expect to generate more revenue from it, while 48% expect to appear on digital channels in the next two years.
1. Customers expect the highest quality of services
Today, customer expectations determine the directions of development of new technologies. In most cases, it’s a very good trend. Indeed, new tools significantly improve the quality of products and services. Expectations are driving digital change. However, there are cases when the expectation of quality generates unexpected problems that should be anticipated when planning changes. This can be exemplified by AI and the case of automatic document flow systems generating large amounts of data in an unadapted infrastructure and requires optimization and improvement of technology just a few years after implementation.
2. Businesses need to increase productivity
Technology has enabled new processes, strategies and procedures to emerge that have made us more productive and efficient. Work overload reduces productivity by 68% in the case of employees who feel they do not have enough hours during the day to complete their tasks. Digital transformation can help increase productivity by eliminating commuting time, time spent searching for information, and time spent on other administrative tasks.
Full digital transformation will result in fast customer service, higher product quality, faster workflow and lead time, better information management, and reduced time and costs.
It should be kept in mind that not everything digital is (automatically) more efficient and effective. It is a particular problem in systems where the quality of the implemented systems has not been pre-emphasized. Without the time of project evaluation with error control, the system generates more and more errors in time and the elimination of errors and their consequences often costs many times the value of the implemented system and the expected benefits.
3. We need a competitive advantage
In a recent Gartner survey, “56% of the surveyed said their digital enhancements have already increased profits. Companies that are rapidly moving towards digital workflows clearly have a competitive advantage over those that continue to adopt traditional ways of getting work done.”
Summarizing, complete digital transformation is:
● Quick and easy access to information, saving employees time and effort.
● Better service and reduced lead time.
● Introducing savings by digitizing documentation.
● Mobile platforms enabling work anytime and anywhere.
● Leveraging new platforms and methods of operation, such as cloud solutions – allowing the organization to access the software it needs faster, saving space and money by using cloud storage instead of classic archives.
● New technologies, such as artificial intelligence and machine learning, give organizations visibility to make better decisions about marketing, sales, and product development.
● Improved internal and external communication and collaboration.
In the next article, you will learn tips on how to implement digital transformation and how to properly carry it out.