Digital Transformation: What is it and why is it important?
Digital transformation and the business transformation it generates It has been around in one form or another for over ten years. There are many definitions of what Digital Transformation actually is, and how it affects businesses that apply it to their organisations.
Simply put, digital transformation is the integration of intelligent technology into all areas of a business. Business Transformation initiatives are needed to optimise business performance and achieve better outcomes.
Why Digital Transformation?
The Covid pandemic has forced many businesses into moving from developmental strategies to survival strategies. A Harvard review of Digital Transformation concluded that the effect of the pandemic on IT strategies has been akin to Mike Tyson’s comment that all plans are perfect until you are punched in the mouth. The corporate focus on business profitability has moved to one concentrating on business continuity and resilience.
In short, in many cases, long-term digital transformation strategies have moved to short-term imperatives, and have become key enablers of business survival.
The new strategies have included a move to outsourced Cloud-based technologies, providing customers with remote access to systems, working from home, and e-commerce. Covid has been a catalyst for many transformation projects, and a move to a digital platform and digital service delivery. Business practices have also radically changed. As an example, in the bricks-and-mortar retail world, online ordering and kerbside collection or home delivery is the new normal.
This environment is unlikely to change in the short and perhaps medium-term, and worldwide disruptions are likely to further disrupt supply chains and change customer behaviour. This will lead to increased financial and other pressures on business, often needing very quick responses. Comments in the media by global leaders indicate that they foresee digital transformation as a key enabler in business survival strategies over the next few years.
Some commentators say that if a business is not actively implementing digital transformation, it is unlikely to survive.
What Involves Digital Transformation?
Digital transformation is not just replacing or extending existing business processes with their digital equivalent. In many organisations, outdated workflow processes persist, simply because “that’s the way we do things”, and no one has ever examined their continuing relevance. They can present barriers to successful digital transformation.
If the transformation is to succeed it must be part of an overall move to a continuous integration/delivery environment where existing processes are modernised and continually reviewed and revised to ensure their relevance to changing business needs.
A key first step is therefore a root and branch review of current business practices and procedures leading to a development of a strategy to move to a new digitally-enabled work environment with new business practices and procedures. Some practitioners recommend a return to a zero base, and the development of new procedures and processes as if the business were a green-field site.
Some sacred cows may need to be sacrificed, and many people will find that they are removed from their current comfort zones to a totally new environment. If not carefully managed, that could be an issue. Communications with staff will be an essential part of the process, and their involvement in the transformation is vital to generate a sense of ownership.
The development of new processes must be carried out in the light of the new digital technologies.
Digital Transformation – the Introduction of New Technologies
A significant part, indeed, perhaps the rationale behind digital transformation is the use of intelligent technologies to replace existing manual processes and accrue accuracy and profitability benefits. Robots don’t need sick leave and can operate 24/7/365. This move was already underway on the shop floor with SCADA and CNC technologies, and the addition of AI and robotics have given some manufacturing industries the opportunity for a lights-out continuous production shop floor.
Big data and AI-based analytics can automate customer-facing processes. Many helpdesks already operate AI-based automated response systems for common enquiries.
Their introduction can have far-reaching cultural implications in an organisation. Often, the digitally transformed processes need enhanced people skills, a training and personal development requirement that needs to be built into the transformation project.
Overall, to answer the question “ Digital Transformation: What is it and why is it important?”, it is a vital matter for companies to address. If they don’t, they could be putting their survival at risk.