Digital Transformation (DX)

Digital Transformation (DX) is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.

Digital transformation requires strong leadership to drive change. But it also requires a vision for what parts of the company you want to transform. Companies in all industries and regions are experimenting with — and benefiting from — digital transformation. Whether it is in the way individuals work and collaborate, the way business processes are executed within and across organizational boundaries, or in the way a company understands and serves customers, digital technology provides a wealth of opportunity.

Areas for Digital Transformation

Digital Business Transformation Areas
Digital transformation in the integrated and connected sense which it requires can, among, others, touch upon the transformation of:

source: i-Scoop

• 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.

The Importance of Digital Transformation

Why is digital transformation important?
Worldwide, digital transformation could be worth $18 trillion in additional business value, according to analyst house IDC. Meanwhile, research firm Gartner's CIO Agenda suggests digital business will represent an average of 36% of a business's overall revenue by 2020. The group's report, Gartner's IT Market Clocks for 2016: Digital Transformation Demands Rapid IT Modernization, found that 66% of companies doing digital transformation expect to generate more revenue from their operations, while 48% predict that more business will arrive through digital channels. Other reasons for doing it were to empower employees with digital tools (cited by 40%) and to reduce costs (cited by 39%). It's clear that there's no better time to embark on your own digital transformation journey if you want to reap the rewards down the line.

While cutting costs and refining an organisation's operations with the latest digital technology is appealing enough on its own, embracing a digital transformation doctrine can also make an enterprise more secure and robust in the face of IT outages.

Many IT administrators and CIOs might extol the virtues of having an on-premise app or database server where direct access is variable if something goes wrong and that by keeping such infrastructure nearby the IT department can ensure it's secure. That may have been true a decade ago, but the growth of cloud services, platforms and infrastructure have seen vast improvements in how reliable cloud-hosted and cloud-native apps and services can be.

Major cloud providers like Amazon Web Services, Microsoft Azure and the Google Cloud Platform, invest millions upon millions of dollars into building out their cloud infrastructure, from expanding capabilities to boosting redundancy and security. These days cloud providers can offer better services and security than all but the most robust private data centres and server rooms. And they can offer such cloud services at extremely competitive prices. As such, it makes pursuing digital transformation, especially from a 'move to the cloud' perspective a much easier and appealing process than it might once have been.