What actually is digital transformation?

Today, digital transformation has become hugely important for businesses of all sizes. Every study, article and panel discussion involving how businesses can remain competitive in this digital era promote this message. The importance of digital transformation is spoken about often, however there seems to be a lot of confusion among business leaders surrounding what exactly digital transformation means.

What is Digital Transformation!

It is difficult to give a generic definition to the term ‘digital transformation’ as it will look different for every company. However, it is an important process for integrating digital technology across every area of the business. These changes will affect how the business operates and deliver for their customers. Although it may sound simple, it is a complex process. It is also a cultural change for the business, which will require the business to challenge the norms and frequently experiment with new ideas. This will involve employees breaking old habits and learning new skills. It can be difficult to break away from processes which have been in place for a long time and this can often be a reason why transformations fail.

There have been a number of different definitions for digital transformation. For example, Greg Verdino states ‘ Digital transformation closes the gap between what digital customers already expect and what analog businesses actually deliver’, whilst Brian Solis defines it as ‘the realignment of, or new investment in, technology, business models, and processes to drive new value for customers and employees and more effectively compete in an ever-changing digital economy.’

Why is it important?

The main reason why digital transformation is so important is simply survival. Going through a transformation is very expensive and sometimes unsuccessful and so businesses don’t do it by choice, but out of necessity. Another significant reason is the added value it could bring to the business. Gartner’s CIO Agenda suggests that by 2020, 36% of a business’s revenue will be from digital business. In a recent survey by Gartner 56% of those surveyed stated that their improvements have already increased profits. There are also a number of other reasons why digital transformation is important which are outlined in Gartner’s IT Market Clocks for 2016: Digital Transformation Demands Rapid IT Modernization. For example, 66% of businesses who are embracing digital transformation are expecting higher revenue and 48% are predicting that they will get more business through digital channels. It is clear that this transformation is too important to turn a blind eye to.

Although IT will be important in driving the strategy, it is important not to overlook the people element in the digital transformation. Implementing the strategy and helping employees adapt to the new changes affects everyone in the organisation and cannot be overlooked.

Gartner, 2017. Gartner Survey Shows 42 Percent of CEOs Have Begun Digital Business Transformation. [Online] https://www.gartner.com/en/newsroom/press-releases/2017-04-24-gartner-survey-shows-42-percent-of-ceos-have-begun-digital-business-transformation

Red Hat, 2018. What is digital transformation? [Online] https://enterprisersproject.com/what-is-digital-transformation

Hellard, B. 2018. What is digital transformation? [Online] https://www.itpro.co.uk/strategy/28047/what-is-digital-transformation

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