Digital Transformation has to be one of the most loosely defined business terms in use today. What does it even mean for modern work places, surely, every company has several digital elements? If a business is getting a load of new iphones for its employees – could that be deemed digital transformation? Humour aside, the point is there needs to be more clarity as to what the term specifically means - the type of change it involves and where the value comes from for both businesses in general and for IT organisations.
What is not in question is that companies across every sector now have some form of digital transformation on the agenda. Businesses are already assessing priorities and strategies for 2018 and digital transformation is bound to be placed firmly near the top of the ranks. Evidently, Gartner’s renowned annual CEO survey released in April this year showed that 42 per cent had begun digital business transformation and that IT related changes “had the highest ranking ever in the history of the CEO survey.”
What’s interesting is the seemingly rapid change in mind set, shifting toward digital business was speculative for most businesses just a few years ago, yet it has become a reality for many in 2017. Organisations see it as a major competitive differentiator and that getting ahead of the curve in the digital transformation race is a positive move. A view that was strongly put forward in another recent report released by Capgemini Consulting, which stated that 87% of companies feel that digital transformation is a competitive opportunity.
It’s now a question of ‘if’, not ‘when’, as the benefits of digital transformation are widely recognised, however the current debate centres on the ‘how’. A quantitative investigation carried out by Creative Intellect Consulting (CIC) showed that while digital transformation is happening across organisations of all sizes, industries and geographies, there are important drivers underpinning its progression. The study, which represented the views of Independent Software Vendors, Value Added Resellers and a range of enterprise organisations, found that business efficiency (speed) and experience (customer, employee and partner) were the strongest drivers prompting the change.
While technology will support these improvements, it is important to recognise that technology is not in itself the change. It is easy to assume that digital transformation is an IT initiative, due to its very nature. However, it is fundamentally an initiative based on business needs. When it comes to defining the ‘how’, it is clearly not as simple as introducing the latest technology. The same as any other business change, digital transformation presents several challenges and barriers. Workplace culture, cost and lack of knowledge, interoperability and integration in the technological tools were the biggest obstacles cited in the CIC study.
One obvious challenge is the fact that businesses have become highly dependent on familiar desktop and web technology, and tried and tested paper-based processes. Any new technology introduced as part of a transformation needs to offer usability, be cost effective and easily integrate with existing systems and practices. In terms of platforms, cloud and mobile were seen as “instrumental in the journey towards digital transformation”, according to the CIC findings, and viewed as an important part of being a modern, digital business. A technological solution to the ‘how’ would need to be in line with this thinking. Solutions that are able build upon, replicate and improve existing working practices.
For businesses to survive and thrive in the digital era, they need to focus on increasing the speed at which they operate, reduce operation costs and have the ability to embrace new processes and business models. Digital transformation is defined as seeking to achieve business outcomes through the adoption of new technologies. How? The culture barrier can be overcome with buy in from all key stakeholders across the business, not just IT departments, and new technology should be digital versions of familiar tools that enhance working processes and promote modern, innovative ways of working. Digital transformation equals business transformation and only when it is fully embraced will it lead to success.