Digital Transformation Philosophy
What are the prerequisites for digital transformation? People have always had to work in the face of an unpredictable future, but it is obvious that technology is evolving even faster than humanity’s capability for easy adaptation. We are not just trying to adopt technology; we are also trying to understand the nature of change. Digital transformation is caused by the changing needs and expectations of consumers. Digital transformation is, therefore, a journey, not a destination. We need instruments to accompany us on this journey.
For instance, we need philosophy in the digital age more than ever. Philosophy is the compass of human civilization. It is the knowledge and understanding of the mind. Philosophy can help us face the most critical challenges of digital transformation.
Agility is important because it requires both structural and psychological change. It means taking risks, changing, and investing in it. Businesses and people who embrace change and adapt to a more agile model have the potential to be more successful than ever. An agile business means a business that understands social, environmental, technological, and procedural issues.
Digital transformation is a revolution for business models and offers two options for businesses: adapt or stay behind. It invites us to look beyond our comfort zone, and it is worrisome for some, while exciting for others. Digital transformation offers opportunities, but it, by any account, cannot be stopped.
Digital transformation cuts us off from the past, but we allow it within the strategy we determine. It is, essentially, about creating an integrated technology platform that reinvents all organizational processes. It is the step that lets you aim for a bigger goal for digitally transforming the product, changing your mode of operation, and connecting with your customers in a different way. You can think of this as a change in business philosophy.
Regardless of department or process, all data and analytics focus on one thing: business development. A successful digital transformation lies not in the application of new technologies; but instead in enabling businesses to take advantage of the new possibilities offered by technology.
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As conventional business models change, design is emerging as one of the important components. Engineers are motivated by working on problems, challenging them: “How can I make this machine run?”, “How can I generate energy at the most affordable cost?” The method engineers need to invent, design, and test these processes is the design thinking.
Digital transformation presents us with complex and undefined problems. The “Design- Thinking” methodology is an effective way to tackle the problems posed by this transition. It provides in- depth information on digital transformation needs and requirements. It is a practical and creative method to solve developing problems, especially in areas such as engineering and architecture. Design Thinking is useful for rebuilding business models that require innovative solutions, as it is a powerful tool for handling unknown works or tasks that have never been done before.
As we have seen in the efforts for conventional change, communication also plays a crucial role in digital transformation. Digital transformation is the transition of a business from conventional processes to digital functions, which are more based on technology. Digital transformation represents the departure of conventional businesses from the way they usually operate. As a result of research by the international management consultants McKinsey & Company, the requirements for successful digital transformation are listed as follows:
As digital technologies are reshaping the industry, many companies are trying to sustain a large-scale change to capture the benefits of these trends or simply keep up with their competitors. In 2020 alone, a sum of over 1.3 trillion dollars was spent on digital transformation projects around the world, and this figure is expected to double to nearly $2.3 trillion by 2023.44 Research on digital transformation shows that the global success rate of transformation efforts is low. Only 16 percent of survey respondents say their organizations have successfully improved digital transformation performance and equipped them to sustain changes over the long term. 88 percent of the companies believe they do not have the right technology to implement a digital strategy at the moment. 59 percent of companies say they worry that they may be too late to start digital transformation efforts and that they may fall behind their competitors.45 For example, Ford has a long and successful track record of selling vehicles around the world, but we can say that is what makes it difficult to bring about a digital transformation that could fundamentally change company operations that have developed over 115 years.46 On the other hand, a significant part of Tesla’s success can be attributed to the highly effective implementation of digital transformation along the entire value chain. Using technology, they developed a complete digital ecosystem of integrated products, services, and operational capabilities to lead a customer-centric strategy.
Even high-tech media and telecom industries are struggling for digitalization. The success rate of these industries does not exceed 26 percent. In moreconventionalindustries such as oil and gas, automotive, infrastructure and pharmaceuticals, the digital transformation is even more challenging. Success rates in these industries range from 4 to 11 percent. Success rates also vary according to company size. Organizations with less than 100 employees are 2.7 times more likely to achieve a successful digital transformation than organizations with more than 50,000 employees. In conclusion, the organizational transformation required to invest in digital technologies and realize the promises is critical not only for the success of businesses and professions but also for their individual professional lives.