The term “Digital Transformation” has become more than just a buzzword as companies continuously work toward the goal of realigning and investing in the digitization of all business aspects to meet and predict customer demands. In the midst of these big changes, there has been much confusion about what it means to actually achieve digital transformation and how to monitor your progression through each stage of the transition.
What Exactly is Digital Transformation?
The way people use technology in their everyday lives has transformed how businesses must operate to have continued success in the future. Digital transformation addresses every aspect of a business to make better decisions and meet the needs of their customers. Essentially, when a business begins to make this change, they evaluate six main areas:
- Customers – Analyze, forecast and predict the best ways to engage with customers and optimize the customer experience accordingly.
- Activities – Business operations such as marketing, customer service, etc.
- Processes – Operations or activities necessary to meet business goals.
- Models – How the business functions including time-to-market
- Ecosystems – Partner and stakeholder networks as well as regulations.
- Assets – Tangible and intangible items like technologies.
The term is often linked to technology and the automation of processes to achieve business intelligence. This may also include transitioning to mobile or cloud technologies. The goal of Digital Transformation is to make every aspect of a business “digital” to provide better services or products to customers, while getting smarter and optimizing operations along the way.
As such, creating efficient application portfolio management strategies and reducing technical debt are critical to Digital Transformation success. As you evaluate the core areas of your business that need to “go digital,” it’s important to run an in-depth SWOT analysis to measure the stability of the building blocks that support those business operations. You should also identify transformation catalysts that require reinforcement as well as eliminate burdens that may slow down your Digital Transformation journey.
What is Driving This Change for Industries?
2015 was the year of the digital transformation craze, but how far have industries actually come in a year? Building on innovations in cloud, social, analytics and big data technologies, companies in the Music, Publishing, Retail, Travel and Telecom industries have been particularly successful.
In the Telecom industry for example, some call centers that employ social touch points have been able to drastically reduce the number of inbound calls by providing online “self-care” services.
In Retail and Consumer Services, mobile apps have completely revolutionized the taxi industry, creating a high-demand market for on-demand car services like Uber. Retail banks are trying to increase their relevance against more nimble, consumer-oriented companies with single-touch order buttons in their online banking applications.
Organizations like the World Economic Forum have started talking about the impact Digital Transformation can have on our society and how we can harness that power for good.
It’s clear that Digital Transformation is driving fierce competition in big industry sectors, but how can you make sure you’re ahead of your foes?
From an IT perspective, it is more important than ever to ensure that your core systems and business applications are driving this digital transition. Where should you look for opportunities to take advantage of this real revolution? How can you set new standards by shifting to predictive analysis? Will this help you remain one step ahead of the competition?
These are questions we will tackle head-on in our Digital Transformation blog series. Stay tuned over the coming weeks for best practices and detailed steps on how to set-up your organization for success.
In the meantime, check out what one of our partners has to say on the matter: Digital Transformation in the Context of a Two Speed IT Environment.
Erik Oltmans, an Associate Partner from EY, Netherlands, spoke at the Software Intelligence Forum on how the consulting behemoth uses Software Intelligence in its Transaction Advisory services.
Erik describes the changing landscape of M & A. Besides the financial and commercial aspects, PE firms now equally value technical assessments, especially for targets with significant software assets. He goes on to detail how CAST Highlight makes these assessments possible with limited access to the targetâ€™s systems, customized quality metrics, and liability implications of open source components - all three that are critical for an M&A due diligence.