Digital transformation is one of the big buzzwords in the business technology industry. However, not everyone is clear about what the term means or how it might apply to their organizations.
Like most buzzwords and industry trends, digital transformation is a double-edge sword. On one hand, it has the potential to radically transform your business, but on the other hand, it opens up a multitude of business, operational, organizational and technological variables. While this provides great opportunities to some, for others it provides overwhelming options that can be difficult to navigate.
1. What is digital transformation?
Digital transformation is the use of technology to make quantum improvements – rather than more incremental adjustments – to an organization. It is more than a simple technology initiative. It is a strategy to completely overhaul an organization’s business model. For example, a company might leverage digital transformation strategies and tactics to overhaul its supply chain or renovate the way customers interact with the company.
2. What are the major components of digital transformation?
Digital transformation can entail any number of technologies, including ERP software, HCM systems, eCommerce,business intelligence, mobile applications, analytics, internet of things along with a host of other possibilities. It should be noted that digital transformation typically entails a flexible and creative use of potential technologies without being contained by any one type of technology. Digital strategies are typically heavily driven by an overarching business strategy rather than by the IT department’s need to upgrade current systems.
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3. How is digital transformation different from ERP software implementations?
Digital transformation is typically a more revolutionary change to a business, whereas ERP software deployments are centered around more incremental business improvements. In addition, digital strategies more commonly leverage innovative new technologies not currently being used by the organization. ERP implementations more commonly involve upgrading an outdated back office system. However, ERP systems can coexist with digital transformations and are often one of multiple components of a comprehensive digital strategy.
4. How do I know if digital transformation is right for my organization?
Digital transformation is most suitable for organizations that are aggressively pursuing growth, experiencing tectonic shifts in their industries, and/or are interested in overhauling their business models to be more competitive. For example, organizations in the publishing industry are ripe for digital transformation because their product (print publications) are quickly becoming obsolete, technology (the internet and mobile apps) are cannibalizing their legacy products and print-only organizations are struggling to keep up with this evolving competitive landscape. Organizations in this and other industries are leveraging innovative digital strategies to transmute their products, customer experience and supply chains.
5. What do I need to do to make my digital transformation successful?
Successful digital transformations require a host of strategies and methods. These include strongly defined business process management, a comprehensive organizational change management strategy, firm executive sponsorship and technological creativity and objectivity. Because these types of initiatives entail more risk and change than a more technologically-driven initiative, the people and business process aspects of the change are particularly important. It is important to invest in the right resources and activities to make these projects successful.These are just a few commonly asked questions to help you start on your digital transformation journey.
Dive into more detail by downloading Everything You Need to Know About Digital Transformation.