By Sonia McPherson on Aug 23, 2018 12:12:24 PM
Look beyond the hype and you'll find a daunting task at the heart of digital transformation. Rather than focusing on any single IT project, digital transformation describes a series of projects that, together, change every facet of an organisation, from back office operations to customer interactions, often with the end goal of making these different processes intrinsically linked.
What is digital transformation?
The Global Center for Digital Business Transformation says that "organizational change is the foundation of digital business transformation". That's because changing the nature of an organisation means changing the way people work, challenging their mindsets and the daily work processes and strategies that they rely upon. While these present the most difficult problems, they also yield the most worthwhile rewards, allowing a business to become more efficient, data-driven and nimble, taking advantage of more business opportunities.
Why is digital transformation important?
Worldwide, digital transformation could be worth $18 trillion in additional business value, according to analyst house IDC.
Meanwhile, research firm Gartner's CIO Agenda suggests digital business will represent an average of 36% of a business's overall revenue by 2020.
The group's report, Gartner's IT Market Clocks for 2016: Digital Transformation Demands Rapid IT Modernization, found that 66% of companies doing digital transformation expect to generate more revenue from their operations, while 48% predict that more business will arrive through digital channels. Other reasons for doing it were to empower employees with digital tools (cited by 40%) and to reduce costs (cited by 39%). It's clear that there's no better time to embark on your own digital transformation journey if you want to reap the rewards down the line.
Define 'digital' in digital transformation
Naturally, transforming a business goes far beyond technology to encompass cultural change from the top to the bottom of an organisation. And CIOs must challenge mindsets, generate buy-in among all staff and make clear what the benefits of the new way of working are in order to succeed. But the journey does often start with the technology, so it's worth examining what 'digital' actually means here.
The technology that will help drive a business's objectives and give it forward momentum can change year after year, and obviously that depends on an organisation's current IT tools. One of the biggest challenges firms face right now, though, is storing and analysing the huge amounts of data they collect.
Without analysing this treasure trove, businesses are left paying for servers or cloud services to store a massive unusable asset. But getting the right tools to perform this analysis means firms can start to gain business insights and understand customer behaviour better. They can also make use of IoT data, and adjust their organisations quickly to take advantage of new market opportunities.
This puts analytics near the top of the list for most businesses, while cloud is often a must because it provides a reliable way to store this data without having to refresh on-premise servers every four years or so.
Collaboration tools that allow staff to work more productively and flexibly also give huge boosts to productivity if used properly. File-sharing services are almost standard now, and they let colleagues collaborate on documents wherever they're based, without building up multiple versions of Word files as a document is updated by different people. Mobile devices with access to apps that allow staff to message each other and share files mean no train journey is ever wasted time, and can improve employee satisfaction by giving them the option of working from home, or out of the office, when necessary.
Finding the right digital transformation strategy
Digital transformation can be a complicated process and finding the right strategy for your organisation can be one of the biggest hurdles to digital freedom.
Deloitte’s report, 'Strategy, not technology, drives digital transformation', discusses the merits of looking to a strategy for rolling out a path to digital maturation rather than the technology itself. Technology changes and adapts over time and it’s likely that in a few years, the technology your business needs will change. However, it’s vital that the way you implement that technology is watertight to prevent any hiccups along the way.
The report explains the importance of scopes and objectives in a digital transformation strategy, with the technology the last consideration. It’s the technology that enables the processes to be fulfilled, but it’s the way they’re implemented that will have the biggest impact on company success.
It added that digital strategies can’t just focus on the online world, but need to bridge the gap between online and offline worlds. For example, a museum needs to consider offering an enthralling experience for both the customers physically visiting, but then continue that experience through mobile and social platforms.
To succeed in creating these new digital experiences requires a shift in skillsets, and embracing a collaborative culture, where people pool ideas and share expertise. The companies that are most likely to succeed in digital transformation are those with open minds that are happy to take risks.
But Deloitte added that having the resources available to them is also crucial. Leaders at forward-thinking businesses must have the tools at their fingertips to develop skills and know-how across their entire organisation.
Forrester, an analyst firm, recommends a dual-path approach. This allows IT to achieve long term transformation goals and reach a number of quick-wins to bring about business buy-in.Forrester analyst Ted Schadler wrote in his report, titled 'Take Two Technology Roads to Digital Experience Success', that a business should begin by prioritising investments that give benefits to customers and generate business value. From there, you can then split the strategy into the two paths of quick projects and longer term transformation.
When describing the quick-win path he highlights: "On this path, you will turn on functionality you aren't using and extend your existing platform with new software. The cloud is your best way to layer in new functionality without rebuilding your existing platform."
And for the longer-term path, he underlines: "You will define, select, and implement a modern platform to deliver long-term agility and capabilities. The cloud is also your friend here: It's the future of digital experience platforms."
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