Sparks from a sparkler

Digital Transformation: How Companies are Embarking on a New Business Paradigm

Is Digital Transformation the latest buzzword, akin to the “i{everything]” from five years ago, or is there really something to it? Is it something specific or a business concept? Does it mean developing a user-friendly web or mobile experience, or is it turning everything into cloud and SaaS?

We have been hearing all of these questions and many more from companies trying to figure out how to better support the digital ecosystem. There’s a lot to digital transformation, including its individual components, the impact on businesses, and activities organizations are performing in their digital transformation now.

Defining Digital Transformation
First, let’s define Digital Transformation and look at two major components that organizations need to consider. Digital Transformation is not one specific thing.  It is not a revolution but instead an evolution; businesses have been reinventing themselves and changing for centuries based on the market and technology advancements. Railroads opened up distant markets. The Industrial Revolution saw the rise of mass manufacturing.  Digital technologies are simply another stimulus for business change.

Digital Transformation is the technology, business models, and processes innovations used to create new experiences to drive new value for customers and employees in a rapidly changing digital environment. The focus is on how business can create new experiences that drive more unique value.

Organizations can drive value in several different ways.  For example, depositing a check from your mobile device is a new experience.  You save time going to the bank, save gas if you drive there, and get quicker access to your funds.  A new experience has created new value. Another example would be optimizing your internal software development processes to leverage the cloud and DevOps to reduce your development and deployment timelines. Using my previous example, let’s say you’re working on enhancement so that I could also apply my deposit to my mortgage automatically from my phone. In the past, this would have taken six weeks to develop, but now it can be done in two –to four weeks using cloud and DevOps. There’s value in an optimized implementation process.

To fully embrace Digital Transformation, two major components must be considered. The first is the actual customer experience they are creating and the second is the enterprise application process improvements to support the new experience.

Digital Transformation overlap

Customer Experience and enterprise improvements are not siloed, but are two sides of an effective digital transformation process that work in collaboration. Focus on external experiences to be created and how the enterprise needs to evolve and adapt to create them.

The Customer Experience component of Digital Transformation has unique activities and disciplines that are important.

  • How are you identifying the new experience?
  • How are you designing it? How are you evaluating it?
  • How are you leveraging technology to support?
  • What new business models are relevant?

The Enterprise Improvement component also has unique characteristics.

  • What technology investments should be made to ensure better experience?
  • How can we support a more rapid go to market?
  • How do our processes and system support the new business models?

Finally, both components must be governed by a new organizational culture and new thinking where leaders are leveraging the changing dynamics that exist in today’s digital ecosystem. In the next blog post, we will examine the key customer and technology dynamics driving digital change.

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