Digital transformation initiatives — especially those centered around customer experience — will drive IoT expansion velocity. Building a technology infrastructure is relatively easy. The challenge is operationalizing data-driven decision-making that impacts the health of the business.
Digital Transformation Strategy?
The power of a digital transformation strategy lies in its scope and objectives. Less digitally mature organizations tend to focus on individual technologies and have strategies that are decidedly operational in focus.
Ideally IT spending is driven by the need to meet business requirements. ... Digital transformation can be defined as the acceleration of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact in a strategic and prioritized way.
Digital transformation is the profound transformation of business and organizational activities, processes, competencies and models to fully leverage the changes and opportunities of a mix of digital technologies and their accelerating impact across society in a strategic and prioritized way, with present and future shifts in mind.
While digital transformation is predominantly used in a business context, it also impacts other organizations such as governments, public sector agencies and organizations which are involved in tackling societal challenges such as pollution and aging populations by leveraging one or more of these existing and emerging technologies.
The human element is key in it on all levels: in the stages of transformation as such (collaboration, ecosystems, skills, culture, empowerment etc.) and obviously in the goals of digital transformation. Since people don’t want ‘digital’ for everything and do value human and face-to-face interactions there will always be an ‘offline’ element, depending on the context. Yet, also in non-digital interactions and transactions digital transformation plays a role in the sense of empowering any customer-facing agent.
A digital transformation strategy aims to create the capabilities of fully leveraging the possibilities and opportunities of new technologies and their impact faster, better and in more innovative way in the future. A digital transformation journey needs a staged approach with a clear roadmap, involving a variety of stakeholders, beyond silos and internal/external limitations. This roadmap takes into account that end goals will continue to move as digital transformation de facto is an ongoing journey, as is change and digital innovation.
Digital transformation is probably not the best term to describe the realities it covers. Some prefer to use the term digital business transformation, which is more in line with the business aspect. However, as an umbrella term, digital transformation is also used for changes in meanings that are not about business in the strict sense but about evolutions and changes in, for instance, government and society, regulations and economic conditions on top of the challenges posed by so-called disruptive newcomers.
Digital transformation covers a huge number of processes, interactions, transactions, technological evolutions, changes, internal and external factors, industries and so forth. So, when reading advice on digital transformation or reading reports and predictions it’s essential to keep this in mind. Although there are common challenges, goals and traits in organizations across the globe, there are also enormous differences per industry, region and organization. What could make sense in one region, doesn’t have to make sense in another, even if we just look at regulatory environments.
Digital business transformation areas
Digital transformation in the integrated and connected sense which it requires can, among, others, touch upon the transformation of:
Business activities/functions: marketing, operations, human resources, administration, customer service, etc.
Business processes: one or more connected operations, activities and sets to achieve a specific business goal, whereby business process management, business process optimization and business process automation come into the picture (with new technologies such as RPA). Business process optimization is essential in digital transformation strategies and in most industries and cases is a mix of customer-facing goals and internal goals today.
Business models: how businesses function, from the go-to-market approach and value proposition to the ways it seeks to make money and effectively transforms its core business, tapping into novel revenue sources and approaches, sometimes even dropping the traditional core business after a while.
Business ecosystems: the networks of partners and stakeholders, as well as contextual factors affecting the business such as regulatory or economic priorities and evolutions. New ecosystems are built between companies with various background upon the fabric of digital transformation, information, whereby data and actionable intelligence become innovation assets.
Business asset management: whereby the focus lies on traditional assets but, increasingly, on less ‘tangible’ assets such as information and customers (enhancing customer experience is a leading goal of many digital transformaton “projects” and information is the lifeblood of business, technological evolutions and of any human relationship). Both customers and information need to be treated as real assets in all perspectives.
Organizational culture, whereby there must be a clear customer-centric, agile and hyper-aware goal which is achieved by acquiring core competencies across the board in areas such as digital maturity, leadership, knowledge worker silos and so forth. Culture also overlaps with processes, business activities, collaboration and the IT-side of digital transformation. In order to bring applications faster to market changes are required. That’s the essence of DevOps: development and operations. In order to make IT and OT work together in businesses/processes/activities, change is required too (it’s not just the information and operational technologies, it’s the processes, culture, collaboration). Etc.
Ecosystem and partnership models, with among others a rise of co-opetive, collaborative, co-creating and, last but not lost, entirely new business ecosystem approaches, leading to new business models and revenue sources. Ecosystems will be key in the as-a-service-economy and in achieving digital transformation success.
Customer, worker and partner approaches. Digital transformation puts people and strategy before technology. The changing behavior, expectations and needs of any stakeholder are crucial. This is expressed in many change subprojects whereby customer-centricity, user experience, worker empowerment, new workplace models, changing channel partner dynamics etc. (can) all come in the picture. It’s important to note that digital technologies never are the sole answer to tackle any of these human aspects, from worker satisfaction to customer experience enhancement. People involve, respect and empower other people in the first place, technology is an additional enabler and part of the equation of choice and fundamental needs.