What is Digital Transformation? An IntroductionDigital Transformation | 0 comments | by Erin Quilliam
Digital transformation may seem like a buzzword. However, it is an important step in ensuring businesses are prepared for the future and are able to work effectively within the new digital world.
What is Digital Transformation?
Digital transformation is more than the incorporation of digital technology throughout a business. It takes into account the latest technology, best practices, skills and talent in order to optimise the business for the digital future.
As the name implies, it is the fundamental transformation of your business strategy and business model to align with all things digital. A digital focus is therefore fully-incorporated in all levels of your business, rather than just acting as a set of tools or a platform used to reach customers.
One of the best, and succinct, definitions of digital transformation is from Greg Verdino. His definition is as follows:
“Digital transformation closes the gap between what digital customers already expect and what analogue businesses actually deliver.”
This definition not only encapsulates what Digital Transformation is but why it is important. Particularly for the future life of a business.
Common Aspects of Digital Transformation
- Big data & analytics
- Mobile technology
- Private & public clouds
- Artificial intelligence
- Machine learning (A form of AI)
- Internet of Things
- Software-defined networking & storage
Areas of Business Transformed as Part of a Digital Transformation
Digital Transformation should touch all aspects of a business and how it operates.
It is not simply employing new technology, but modifying business models and processes to best accommodate and take advantage.
It also requires cultural and attitude changes in many cases. And staff must be trained to think and work digitally, as well as how to use any new systems.
Why is Digital Transformation Important?
The changing nature of how we access and consume information has spurred the need to become digitally focused. As the world becomes more connected and digital-savvy, our demands and expectations for businesses evolve too. (Alluded to in Verdino’s definition.)
Because digital transformation touches every aspect of a business, there are various reasons for its importance. For instance, the implementation of technology and strategies can increase the efficiency of your business. It can also increase security, both internally with your data-handling, and externally with how customers interact with your business. Not to mention, the adoption of digital encompasses your marketing efforts and the channels and touchpoints where customers can reach you.
The importance of digital transformation extends beyond the bounds of making a more efficient and successful business. In fact. 27% of senior executives believe digital transformation is not a matter of choice, but of survival.
If your business fails to put any focus on digital, you face falling behind. When people have better digital solutions and access to technology at home than in the workplace, how can they not be frustrated? And when customers are more digitally savvy than those trying to sell to them, problems arise. (And when 90% of business lack needed digital skills, it’s a very real scenario.)
The Benefits of Digital Transformation
Many of the benefits of digital transformation have been listed above. These include factors such as the streamlining of business processes and increased efficiency. Other benefits of digital transformation are as follows:
Digital Focused Companies are More Financially Successful
The most digitally mature businesses have the highest financial performance. They are better at driving revenue through existing assets and outperform the average industry performance by as much as 6-9%. Meanwhile, companies who are mature in digital transformation management prove 9-26% more profitable than average industry competitors.
This puts forward the strong case that businesses that have a higher digital intensity, and digital transformation management, are the most financially successful businesses, regardless of industry.
Innovation Gives a Competitive Advantage
As Forrester spells out in their incredible research into the state of digital transformation, there’s a pitiful number of companies investing adequately in digital transformation. As they say, it highlights businesses inability to evolve, encumbered by outdated legacy systems.
Meanwhile, the general public now has access to more advanced technology and are more aware of the digital opportunities available to them.
It isn’t just public customers who appreciate the ease and opportunities online. The majority of B2B business is now conducted online. Which means whoever your market is, you’re more likely to deal with them through a digital channel than any other.
Ergo, simply the act of transforming gives your business a competitive advantage. It becomes future-proof and better aligned with customer expectations, whether you are B2C or B2B.
Not to mention, transforming offers the opportunity to provide more improved and efficient systems to carry out fundamental business functions. You can also offer a far better customer experience, increasing user engagement, loyalty, and conversions.
Transformed Companies Face Reduced Risks & Higher Security
In terms of IT, a transformed company faces a reduced risk of failure. By employing modern technology, a business is provided with software that is both robust, reliable, and future-ready. When software carries your vital business functions, it is imperative that it is efficient, dependable, and will last for years with your business.
Meanwhile, digital transformation provides the perfect opportunity to ensure maximum security for your business. This includes ensuring both your own business data is being kept safe from hackers, but customer information too.
However, only 31% of companies interviewed mentioned security as a concern. That means a worrying majority were not concerned or hadn’t even considered the idea data breaches and cyber-attacks.
Not keeping your security up-to-date and employing the most effective technology is a disaster waiting to happen. Because not only are your customers’ knowledge and access to technology increasing – but so are attackers. Not to mention, ensuring your business is adequately secure is not just a nicety for yours and your customer’s peace of mind. It’s a legal requirement.
Improved Decision Making
Arguably, we’re now moving from the digital age and into the data age. This is because there has been a veritable explosion of data that is available for you to use, better tools to gather information, and more sophisticated ways to analyse and manage it.
Having access to this data allows you to make more informed decisions. Digitally mature companies are those that have access to the tools and talent necessary to capitalise on this data. This allows the business to improve their decision making, gather new insights (and do so faster), and react quickly enough to this new information.
Final Thoughts on Digital Transformation
As the world around us changes and customer expectations evolve, it only makes sense that your business changes to meet them.
Digital transformation is simply aligning your business with the expectations of the modern world. It also offers a host of benefits and ensures your business becomes future-ready in the face of advancing technology.
Contact us today for your free Digital Transformation Consultation.Tags: digital first, digital future, digital ready, digital strategy, digital transformation, digital trends, digitised