Digital business transformation is a thorough shift in the functioning of an organization from the old traditional methods to new digital ones. It involves change in its processes, tools and activities with an aim to improve the overall performance of the business. This digital transformational leap is taken keeping in mind the present and future vision of an organization that wants to stay ahead of the curve with respect to changing technologies and customer aspirations. While it is used largely in the context of businesses, it also impacts sectors like governance and social agencies tackling social issues like pollution and literacy, to name a few.
The basics of digital business transformation are simple to articulate. As predicted by MIT Media Lab founder Nicholas Negroponte in his 1995 book Being Digital, any information that exists as an atom in the universe, can be substituted with the same information existing as bits on a digital device. Several current businesses on the digital medium are based on this theory. E-commerce is a good example of such a business that could move from the physical medium to a digital medium.
In the early years, traditional industries like goods transport and retail saw the business leaders deploying digital information systems that catapulted their processes into more efficient formats. FedEx revamped its shipment tracking process turning it into a digital one, as Walmart turned its inventory management in a digital format. In doing so, they created a platform for improved performance vis-à-vis competition.
A recent global survey by CA Technologies with Coleman Parkes revealed that firms in India are seeing the biggest business impact from their digital transformation efforts. Sunil Manglore, Managing Director of CA Technologies India mentioned, “Our survey results are a testimony to the strong correlation between digital technology and company performance.” The survey concluded that Indian companies were seeing an improvement as high as 55% in identifying newer ways of generating revenue post adoption of digital business transformation.
The success of digital transformation lies in its scope and its objectives. It is the strategy that drives a technology transformation project rather than the technology itself. In digital business transformation, the leaders are those companies that have managed to leverage digital transformation in their processes and improved the overall performance of their business.
To create a veritable impact in their businesses, the leaders need to deploy specific strategies. We are discussing some of these strategies below –
Building the Digital Agenda from the top
Organizational change of a digital nature can be brought about from the very top. Digitally mature organizations will have a top brass person at the helm of a digital transformation project. In this way, they sensitize everyone from the top to the last cog in the wheel about the relevance of driving the agenda. For a leadership voice at the top, she needs to be able to articulate the relevance of a digital transformation to the employees and link it to the company’s future. They also have to be digitally competent to lead it from the front themselves.
Build a Digital Roadmap
Digital transformation is a long-term project that involves all spectrums of work for the organization. Since technology is continually evolving, the businesses should have a road map in place to show them where they are and to compare their current performance to where they need to be.
Partha Iyengar, Vice President and Fellow at Gartner once opined, “CIOs are being asked to increase the business value that IT can deliver.” As pressure mounts on CIOs of Indian companies to move IT from a support function to a front seat driver, an effective digital transformation strategy road map becomes a must.
Creating Profound Awareness About the Future Wave of Digital Technologies
As simple as it may sound, digital transformation involves complexities that may make it harder to implement. This could be because of a lack of clarity on the part of managers regarding which options to consider. In such a case, the issue lies with the organization lacking suitable managerial skills required for a digital transformational leap. The leader companies have managed to gain a transformational effect from digital technologies by developing the right managerial and technological skills within their organization. Leadership that fails to address the urgency or the need for digital transformation within their business, is not able to reap the benefits of any transformational exercises that they may do. Another issue that stops digital transformation from yielding results is the institutional challenges. This may occur due to the attitudes of older workers, legacy technology, political undercurrents or a general fatigue towards change.
Which is why, one of the cornerstones of a digital business transformation strategy should be to create the right environment in which such challenges are systematically addressed through sensitization and creation of awareness on the topic. The leadership organizations in this field would give their employees the relevant skills to maximize the benefit out of their digital transformation journey.
Investing in Analytical Tools and Applications
In the current scenario, technology plays a strategic role in driving businesses efficiently. All facets of a business are being increasingly driven by technology. For instance, a customer service team is dependent on various tools to manage the complaints of its customers, the marketing team needs analytics to back up their campaign strategies, the finance team is continuously using analytical tools for business insights. These tools help extract value from the data available to the teams and shorten the time taken for different processes. The difference between the traditional computational tools and the new big data tools lies in three Vs; the volume of data they can handle; the variety of structured and unstructured data they can process and the velocity or the speed with which they can function. Big data performs on all these three aspects over its traditional predecessor. This dependence on digital technology makes it important for companies to develop a holistic technology strategy deciding on where to invest, when to invest and in how many stages to invest.
With the advent of emerging technologies like Artificial Intelligence, IoT, big data and predictive analytics the business landscape is altering at a scale and speed that is both promising as well as precautionary. Organizations that have already undergone phases of a digital business transformation are experiencing the benefits of leveraging analytics and big data in their value chain. It is predicted that by 2020, 50 billion devices will be connected through the internet and through digital technologies, organizations would have created around $14 trillion worth of economic value between 2013 to 2020.
A digital transformation enables an organization to free itself from the silos that a physical organization suffers from. It brings agility, efficiency and transparency to the organization. At its core, this transformation adapts the organization for the future business challenges.