Digital Transformation
Digital transformation is the integration of digital technology across all functions of an organization, fundamentally transforming and revolutionizing the way it operates. Much further than that, it's a cultural shift that necessitates constant status quo challenge and frequent experimentation. This can often entail abandoning long-established organizational procedures and methods upon which businesses were founded in favor of relatively new practices that are currently being developed.
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Strategy & Organization | Business Process Optimisation | Cloud Migration | Innovation
What is Digital Transformation?
The process of digital transformation is crucial to the success and sustainability of any organizations ranging from SMEs (Small and Medium Organizations) to multinational businesses. This message is clearly heard from seemingly all sources researching how organizations can improve efficiency and become more competitive.
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However, many corporate leaders are unsure of what the term "digital transformation" actually entails. Is it merely another way to say shifting to the cloud? What concrete actions do we need to take? Do we need to employ a consulting firm or construct new functions to assist us in developing a framework for digital transformation? What elements of our business processes require modification? Is it really worth it?
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According to Jay Ferro, Chief Information & Technology Officer of Clario, digital transformation should begin with a problem statement, a clear opportunity, or an aspirational goal. The "why" of your organization's digital transformation might be around improving customer experience, reducing friction, increasing productivity, or elevating profitability. Or “if it's an aspirational statement, it might revolve around becoming the absolute best to do business with, utilizing digital technologies that were unavailable years ago," Ferro explains.
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Many business leaders usually think about what digital transformation will mean for their organizations. The term ‘digital’ is a loaded word that means many things to many people. “When you discuss digital transformation, unpack what it means," says Jim Swanson, CIO of Johnson & Johnson, who led digital transformation at Bayer Crop Science (and previously served as CIO at Monsanto) before joining Johnson & Johnson in early 2020.
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At Monsanto, Swanson discussed digital transformation in terms of customer centricity. "We talk about automating operations, about people, and about new business models," he says. "Wrapped inside those topics are data analytics, technologies, and software – all of which are enablers, not drivers."
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Transformation, Leadership & Culture
"In the center of it all is leadership and culture," Swanson says. "You could have all those things – the customer view, the products and services, data, and really cool technologies – but if leadership and culture aren't at the heart, it fails. Understanding what digital means to your company – whether you're a financial, agricultural, pharmaceutical, or retail institution – is essential."
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Digital Transformation & Governments
A key component of digital transformation is, of course, technology. However, very often, adopting new technology is secondary to getting rid of outmoded practices and outdated systems. It also involves fostering innovation and creativity.
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Many government sector organizations are on the verge of realizing the cloud model’s full potential – beyond cost-cutting to gain a strategic edge, notes Dave Egts, Chief Technologist at Red Hat. "Deloitte recently released a list of nine technology trends transforming government, and one, in particular, will be key to enabling the future of technology in government: The cloud as an innovation driver," Egts says.
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Why does Digital Transformation matter?
An organization could decide to undergo digital transformation for many reasons. However, the most likely reason is often business survival. In the wake of the recent pandemic, an organization's capacity to respond swiftly to supply chain interruptions, time-to-market demands, and rapidly evolving customer expectations has become crucial.
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We've seen the COVID crisis rapidly re-shape both the "what" and the "how" of organizations' digital transformation agendas, notes Melissa Swift, U.S. Transformation Leader at Mercer. Today, with a vast portion of the workforce are now remote employees. Digital technology has gone from "nice to have" to "the only way work gets done," says Swift. Consequently, digital transformation is now getting the problem-solving focus it likely long deserved.
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Swift points out other organizational areas where digital transformation has revolutionized operations. Among them is the usage of chatbots for extending the capabilities of customer support.
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Digital Transformation took on new urgency during the covid-19 pandemic. Many organizations achieved previously unimaginable speed of change. Today, business leaders recognize digital transformation as key to business sustainability and success. “As organizations have weathered the upheavals instigated by the pandemic, digital transformation has become integral to their responses and also their future plans,” notes Stephanie Overby, award-winning reporter.