Philosophy of Digital Transformation

What exactly means "Digital Transformation."

We must remember that Digital Transformation is not the same as Digitalization. I will explain this slight difference using basic examples for a broader audience. This slight difference is crucial for success in planning and implementation. If you have much software in your company, such as Document Management System (DMS) and Enterprise Resource Planning (ERP), maybe even Geographic Information System (GIS), and if you use them for separate operation of document organization, financial tracking, or fleet management, that is Digitalization. If you still have to retype or manually copy-paste information from one tool to another, it is pure Digitalization. At the moment, when your software tools work using shared databases and exchange information and automatically suggest and make decisions, with or without Artificial Intelligence, we can start talking about Digital Transformation. It might sound similar for non-digital professionals, but there are a few significant differences in further work operation and culture in your company.

Digital Transformation is a much deeper integration of various technologies in our everyday lives, from businesses to administration, industry production lines, supply chains, and many others. In a broader meaning, Digital Transformation is the ultimate changer of our lifestyles, based on the Internet and disruptive technologies around us, including Artificial Intelligence, Ultra-Reliable Low-Latency Communications (URLLC) as fiber-optic networks, and 5G mobile systems, Blockchain, and many other trending and existing technologies. Digital Transformation makes a significant cultural change and reforms how we see the world. As we all know, our existence is at least 50% related to digital - we leave fingerprints everywhere, even more there in the digital than in the physical world. Most importantly, Digital Transformation is a crucial business changer - businesses are changing how they operate and deliver value to their customers.

Digital Transformation is not the point - it's the long-run transformation process. There is no way to press the button to transform traditional methods of operations into digital ones over the night. Digital Transformation is a journey based on a clear vision and strategic approach, moving smoothly from one point to another, avoiding employees' frustrations and business interruptions. Digital Transformation requires we invest in software and hardware and their robust and innovative integration and collect and analyze data. Still, in parallel, we educate and train our employees to use these tools and benefit from the process.

Critical Drivers for Digital Transformation

There are a few key drivers of digital transformation that are shaping the business landscape:

• Increased Customer Expectations: Customers expect a personalized approach from all channels, from in-store to online. They want to interact with businesses conveniently and efficiently, giving them a customized experience.
• Competition from Disruptors: nowadays, market entrants are agile and funded on digital-first business models. They are disrupting traditional businesses and models and forcing them to adapt. Disruptors can often move faster and be more innovative than their established counterparts, putting pressure on companies to keep up.
• Advancements in Technology: technology is advancing at an unprecedented rate, and businesses must keep up to stay competitive. What Artificial Intelligence made in 2023, primarily because of ChatGPT and how these Generative AI tools changed the job market, required skills, and even wholly replaced people, is more than evident in just a few months.

However, these three facts are the main reasons for everyone to step into Digital Transformation even before the market pressures your company - that will happen unavoidably sooner or later. It is always better to start changing and transforming before it becomes critical. It is less painful, leaves more space for strategic planning, and slightly moves toward a new business model.

Benefits of Digital Transformation

Digital Transformation can provide many benefits, and it is not limited to the list below, but I will list the most important and easier to measure:

• Time-Efficiency
• Cost-Effectiveness
• Improved Customer Experience
• New Revenue Streams
• Transparency and Social Impact

Usual Challenges for Digital Transformation

Digital Transformation is, before "digital," just transformation. It means that we need to consider all rules for Change Management to evaluate the physiological effect on employees, customers, and other stakeholders. Transformation is a reform of current habits and state of mind. Still, we must be aware of all those obstacles, which should be discussed and solved through Digital Roadmap with specific actions and projects.

The main reasons for the rejection of Digital Transformation, or any transformation in general, are not limited to the listed ones, but the list contains usual ones from my experience:

• Natural Resistance to Change: Everyone wants to change - Nobody wants to change. People enjoy their habits and routines, so any action that moves them out of their comfort zone will be resisted in various ways and intensity, from skeptical standing to open rejection. However, we have to remember that changes are happening from the past till now, helping us to build the world we have today, and it always was painful and scary. This could be solved by slowing down the process step by step and with broader inclusion of employees to help them understand the benefits of Digital Transformation. Once they know that tools can help them to be more efficient without feeling threatened by techs, they start enjoying being part of it.
• Legislation: Even if we have laws and rulebooks on electronic documents and signatures, many other statutes and rulebooks can be changed and aligned in various fields. Many sectors are still locked by lex specialis and forced to use traditional paperwork.
• Privacy and Cybersecurity: These two components are vital bricks in the wall of trust in digital technology. Once digitalized information and documents are vulnerable to cyber threats and data leaking, it doesn't matter if we talk about personal or business confidential information, the risk assessment must be performed, and cyber prevention, resilience, and recovery plan must be adopted.

What We Should Remember

The answer is: Everything is written in this article. It could not be simpler than this. Before we step in the progress we should keep in mind the benefits we want to reach and consider all challenges and be ready to face and solve them. It would take time and money and can not be 100% painless. I share some facts I would like that someone shared with me when I start working consultancy for Public Administration and companies from various sectors.

If you need more information or considering to start transforming your business - do not hesitate to contact me.