Digital transformation – breaking down the buzzword

Simone Leckning
Nov 23rd, 2020

What is digital transformation

Digital transformation is an overused and confusing term. But it is also an important one, as it can increase business value and competitiveness. Digital transformation is one of the top strategic priorities for organisations. And its importance has only grown after the onset of the COVID-19 pandemic, as many businesses have realised the value of “going digital”. However, using the term can cause confusion within the business, as there are many different understandings of what it means. This creates barriers to implementation, which can come at a huge cost.

Digital World

When broken down, the definitions of this buzzword have 3 common points. These are:

  • An increased use of digital technology,
  • A change in business culture, and
  • An ongoing process

Let’s look at these further.

An increased use of digital technology

This is the most straight forward point – that digital transformation requires more integration and use of digital technology. Businesses use software to improve customer experiences, connect with new technologies, modernize legacy systems and more. This plays an important role in an organisation’s ability to remain relevant and up to date.

However, it is not just about one piece of software that revolutionizes a business. Instead, digital transformation involves the creation and use of many different tools and applications within an organisation. To remain competitive, businesses need to not only optimise their current systems, but also build new innovative solutions for the future. True digital transformation involves integrating technology into all areas of the business, and developing new solutions. It is also essential to compete in a world that is becoming increasingly digital.

A change in business culture

Digital transformation requires rethinking how your business operates and uses technology, and how you use these technologies to deliver value. Continuing to use outdated solutions and software stop businesses from moving forward. Instead, employees need to challenge how things are done, and experiment with new solutions. This change can be difficult to implement, as some organisations have been using the same processes and technology for years.

The company also needs to rethink the role of technology in the business. This involves changing processes or systems into something better, or creating something new. The role of IT is changing, from running and maintaining current technology to being a major driver of business innovation.

An ongoing process

This is the part of the definition that is probably the least understood. Technology is constantly improving, and the expectations of customers are always increasing. This means that businesses need to continually to adapt and evolve. Digital transformation is a journey, not a destination.

In a study by Forrester, 21% of business and technology decision makers reported that they had completed digital transformation – but this is not possible. Companies need to continue to change and adjust, to match technologies and an environment that is always updating. Demand for change and improvements will never cease, and digital transformation strategies need to be able to adjust in response to this.

What all of this means

Digital transformation is vital for a business to compete in today’s market, and its importance will only continue to grow as technologies improve and consumer demands change. Organisations that ignore this concept will be left behind and become irrelevant.

 

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