What is Digital Transformation, really?
If you ask most executives, they will tell you that their organization is fully committed to digital transformation. But are they really?
The previous forty years have seen businesses invest huge resources in order to digitize their existing processes, from payroll to invoicing to customer relationship management. Digitization was about creating sturdy, reliable systems that allowed existing business processes to run more efficiently.
However, digitization never really sought to change those processes, and that is reflected in the inflexibility of older enterprise systems. Does that really sound like transformation?
What is digital transformation?
Businesses have been transformed by technology in recent decades. Consider the impact of e-commerce, for example: originally this was just an online version of old-fashioned retail selling. Now it is part of brand new and previously-impossible strategies, such as gathering customer data on a massive scale in order to power data-driven decision making at a C-suite level.
Digital transformation is about being an organization that can grow and develop to stay on top of a rapidly-changing market. Unlike simple digitization, digital transformation impacts every aspect of the business, including people, processes and customer interactions. It’s not about making a single change like installing a new system – it’s about becoming an organization that is powered by change.
Digital transformation in reality
Digital transformation may not be suitable for every system or application. Important record-keeping systems, for example, need to prioritize security over adaptability.
In every other part of the business, however, companies need to be ready for the next wave of digital transformation to come crashing over them. We’ve already seen so many industries be disrupted overnight by technology: taxis, newspapers, movies, even banking. When companies begin offering digital products and services, it fundamentally changes the nature of that company, and they need to be able to transform themselves from root to tip.
Even internal systems need to be ready for change. For example, internal email systems have always worked on the assumption that the user will be at a local desktop PC. Now, we live in a world of telecommuting and Bring Your Own Device policies. Internal systems need to be able to have the capacity to adapt when needed, without recourse to expensive and painful migration processes.
The Digital Transformation mindset
Many companies have missed out on the opportunities presented by new technology. Digitization has left them with systems that are impossible to update, often due to a sheer lack of staff who understand such antiquated systems. Migration to new platforms can be incredibly expensive, and runs the risk of data loss and downtime, as well as the expense of having to retrain and support staff.
Digital transformation is, fundamentally, an organizational mindset intended to avoid ever finding yourself in that situation again. It is about working with your people to develop versatile processes that respond to changing market conditions. And it is about implementing an IT infrastructure that supports your processes, by being flexible, powerful and future-facing.
Nobody knows what the future holds. Perhaps we will become more dependent on artificial intelligence; perhaps wearables will become a major part of e-commerce; maybe virtual reality will become the dominant communications platform. All that we know for sure is that change is coming, and the winners will be those who can most successfully change themselves.
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