Digital transformation is the integration of digital technology into all areas of a business or organisation, fundamentally changing how it operates and delivers value to its customers (both internal and external). It’s also a cultural up-shift that requires organizations to continually adapt, become agile, challenge the status quo, experiment, and leverage the benefits of change. Ultimately it is about placing people at the centre of a better workplace.
What is Digital Transformation?
- Customer experience
- Data and analytics
- Business model transformation
- Digital operations
To succeed, organizations must focus on three key elements: People, Processes, and Technology.
Digitisation, digitalisation, and digital transformation are three methods organisations have been using to evolve their business models, structures, operational practices, and recruitment and employee skill-sets.
Digitizing operations is a fundamental pillar of digital transformation in that, without it, your organisation will be left behind by more efficient digital companies. An organisation may begin its digital transformation journey by digitizing processes and as it matures, re-architect processes entirely.
Strategic planning focused on the outcomes is integral to a successful transformation. These can be major undertakings, therefore building an outcome-based business-focused strategy that maps out the near-term along with the long-term objectives helps define the transformation path.
Digital transformation is the integration of digital technology into all areas of an organisation and its business operations, fundamentally changing how an organisation operates and delivers value to both internal and external customers.
The reduction or removal of business risk places a central part as does the increase on business efficiency. Reducing or eliminating manual processes is a common digital transformation goal. Manual processes are slow and error-prone, generating risk (and compliance failure), since users must re-enter data multiple times. Automated processes can relieve employees of many manual tasks. Therefore a central goal of digital transformation is the reduction of risk and increase in efficiency through digital automation.
- Leadership and Vision
- The Customer at the Centre
- Culture and Change Management
- Technology Integration
- Data-Driven Insights
- Agile Processes
Change is difficult, but it is also inevitable for most organisations as nothing ever stays the same, and resistance to change can slow down the transformation process, particularly within management.
The post-digital transformation phase is about refining established systems, focusing on employees and customer engagement with these systems, embracing emerging technologies like AI, and managing the maintenance and updating of the technical infrastructure. The digital transformation road map is designed to cater for iterative and agile change on an ongoing basis.
Some key digital transformation risks for businesses, including security, cultural resistance, data privacy, vendor selection, and organizational complexity. By understanding these risks, organisations can then take proactive steps to protect themselves and ensure their transformations are successful.
Increased efficiency, greater business agility and, ultimately, the unlocking of new value for employees, customers and shareholders. Many different paths lead to digital transformation and each organization’s journey will be unique. However, specific approaches, tools, products and services are now well established to assist most organisations transform and digitize.
- Evaluate existing employee skills
- Reveal gaps in talent, skills and knowledge
- Offer training to your existing workforce
- Promote where possible or recruit where necessary
Examples of weaknesses hindering a digital transformation strategy include manual processes that could be automated, outdated workplace technology or difficulty managing your workplace data. Weaknesses can also be assets, resources or attributes your company is missing. Most often, internal programme managers not skilled in digital transformation can increase risks severely by underestimating requirements.
A 2021 BCG study of 850 organizations found that just over a third (33%) were able to achieve their digital transformation objectives. While the failure rate is high, it’s trending in the right direction — success rates were up from 30% in 2020. The failure rate is largely down to lack of knowledge, preparedness and experience in running digital transformation programmes.
- Manufacturing
- Transportation
- Hospitality/Tourism
- Healthcare
- Financial services
- Education
- Retail
- Process Transformation
The Outcomes of Digital Transformation
