What is Digital Transformation?

Arooj Fatima
Arooj Fatima

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Unbeknownst to many, 'Digital Transformation' has been happening over the past century. Why is it an evergreen phenomenon? What is it all about? And how do we effectively action on it? We unpack the fundamentals here.

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Definition of digital transformation

To start off, digital transformation is a very broad topic but it ultimately boils down to how a business uses technology to improve. Some changes are so drastic that it can even result in revolutionized business model for companies. Digital transformation in business has two basic parts: Internal operations and Customer Facing. Both are equally important but organization will need to decide which should be prioritized to combat threats of disruption and remain sustainable for the long term.

While digital transformation is empowered by new technology, successful transformation requires a complete reorientation of the organization that goes beyond simply implementing new technology. To achieve significant change, companies will need to focus on five pillars.

Pillars of digital transformation


1. Leadership

In any environment of change, strong leadership is required to direct the process. Ultimately, when push comes to shove, all eyes will look to somebody to make the decisions. Companies undertaking digital transformation need to demonstrate strong leadership and support from the management team; these leaders must demonstrate that they are taking this process seriously so that digital transformation keeps moving forward. The right leadership will also set the tone for its people and establish a beneficial culture within the organization.  

2. People & Culture 

People are perhaps the most precarious pillars of digital transformation. Without focusing on employees, an organisation will struggle to flourish. Companies that invest in their people, commit to their development, and respect their ideas build employee loyalty. It makes change management much easier to achieve. Once employees are on the same page, they will drive your transformation efforts forward.

Culture is present in every organization and it is the leadership’s (e.g. CEO, department lead, etc) responsibility to set it. If he or she instills a culture that embraces change, allows for failure, encourages curiosity while keeping its mission front of mind – he or she will develop a culture that not only accepts digital transformation, but grasps onto it with both hands. It is important to take the time to consider what an organisation’s culture is, and what needs to be enhanced for future growth.

3. Capabilities 

Capabilities refers to processes, platforms, talent and governance that allow a company to transition to a digital-first culture. At the beginning, an assessment of the organisation’s existing technology management practices, IT infrastructure and implementation models is required. A company’s current capabilities needs to be clearly understood in order to determine what needs to be developed in future. The aim is to create a pathway for technology enablers, platform architectures, digital services mastery, digital innovation and business practices to take hold.

4. Customer experiences 

Customers are the lifeblood of a business. Cultivating and strengthening those relationships determines if an organisation will flourish or struggle. When their needs are fulfilled and their pain points are solved in a seamless end-to-end process, loyalty becomes a by-product.

By valuing customers, digital transformation takes on the context of finding the best way to serve and benefit them with technology. Decisions on which solutions to adopt and how to go about doing it becomes clearer when seen through the eyes of designing a wonderful customer experience.

5. Processes 

This is arguably the most important pillar of digital transformation. As with any business transformation, it is necessary to optimize all your business processes. Optimizing digital processes requires detailed data audits. The initial tentative steps should begin with the establishment of data governance policies, data categorization and the safe storage of data based on key risks, sensitivities, and management needs. Your company’s ability to manage and store data is key to optimizing the operational efficacy of your business.

Conclusion

Technology is ever evolving. What is new today will be obsolete in a matter of years (if not months). There will always be a better way of doing things. Seasoned leaders know this, therefore by focusing their efforts on the 5 pillars of digital transformation, they position their companies to easily absorb new technologies, optimize their business model and, if needed, transform it completely.

 


 

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