Digital transformation. To some it sounds appealing. To others, like just more vacuous jargon. However, embarking on a digital transformation can be incredibly beneficial – as long as you understand the term properly. So what is a digital transformation? And do you need one?
Introduced by consultants and business publications, the term “digital transformation” was originally applied to large organisations struggling to get to grips with an increasingly digital economy. As digitalisation took hold, some companies thrived and others perished.
At first, companies focused on e-commerce, IoT and apps. But this “digital transformation”, though beneficial, proved not to be as comprehensive as what was required. Sure, having a good e-commerce store, cool connected gadgets and a flashy app is great; but a true digital transformation required more.
Operations, structures, culture. Though perhaps less glamorous, it is exactly these elements which digitalisation can have the most impact – though most left them relatively untouched. Modifying these “deep” parts of any organisation will likely be uncomfortable and even distributive. Still, to make the most of the digital world, this is exactly what is required.
According to i-scoop, some of the areas most ripe for digital transformation are:
- Business activities/functions – marketing operations, HR, administration, customer service, etc.
- Business processes – operations and activities used to achieve a specific business goal
- Business models – from the go-to-market approach and value proposition to the ways businesses seek to make money and transform their core business
- Business ecosystems – Partner/stakeholder networks; specifically, gaining and actionable intelligence
- Asset management – In particular, intangible assets such as information and customer experiences
- Customer, worker and partner approaches – Changing the behaviour and expectations of stakeholders
Broad isn't it? And that list is hardly exhaustive. But it does show just how deep a true digital transformation has to penetrate. Indeed, “digital revolution” could well be a more appropriate term.
As more organisations embrace the need for a digital transformation, we will –as we already have – see some businesses flourish and others sink. And, as with all things, the sooner they act, the better. The types of businesses these changes will impact most are the established names; many of today's start-ups have progressive processes and systems built into their models from the offing.
What do you think about the term “business transformation”? Does it refer to a real and necessary change? Or is it relatively meaningless jargon? Email me your thoughts.