What is Digital Transformation? What does it mean to organisations? Is Digital Transformation just a buzzword?

According to Hess et al (2016), Digital Transformation is, defined as transformation ‘concerned with the changes digital technologies can bring about in a company’s business model, … products or organizational structures’.?It fundamentally means a change in how an organisation delivers value to customers and how internal operations create value. ?

It can be argued that the demands and changes of a marketplace and for the organisation may need to pivot in terms of technologies to stay relevant.?This pivot of change requires transforming which may mean changing, especially with COVID-19 which has accelerated some organisations' need for transforming.?COVID-19 provided a sharp focus for digital transformation, where organisations around the world closing offices, concentration of people working from home and the global supply chain relying on more online transactions.?This caused great frantic discussions within organisations IT departments, making sure that the infrastructure was fit for purpose to provide a better experience for consumers and also staff.??

Driving towards a change in the technology (digital transformation) has become a necessity for organisations to remain competitive, embracing customers online demands, driving internal technology with a digital-first approach.?A digital approach to business is now important from large to small enterprises to new start-ups.?Where organisations that have put together a strategy towards digital transformation are ultimately well-positioned and agile to take advantage by creating that value that customers are looking for.?As Forrester explain “Digital transformation is the journey of moving to a digital-first business model with the speed and nimbleness to change rapidly, exploit technology to create lean operations and differentiation, and free up internal resources across the enterprise to do more complex tasks.”

Who remembers the time when you went to the local Blockbuster to rent a film to watch at home, this was the common way of interacting with the large conglomerate to gain access to the latest and greatest movies that were released.?Blockbuster was founded in 1985 and declared for bankruptcy in 2010, where some argue Netflix was the demise of Blockbuster, with a better business model, with an online rental model.?Netflix transformed the business in several ways. They started with a frictionless DVD rental business facilitated by the internet, developed an entirely new streaming business from scratch, and finally invested in original content creation.?Netflix has a valuation of Billions, where it has constantly transformed its technology to keep up with the pace at which it has moved to drive customer demand and satisfaction, driving towards a physical method of renting to a cloud method of renting and viewing movies and programmes.?Netflix is constantly evolving and transforming the business, one way is to look for trends on how people watched content, what kept them watching, and how personalization fuelled content absorption. Then, they used an algorithm to serve up content tailored to their customers’ specific interests, again transforming their technology to drive business growth.?

This is just one way of taking a basic concept and transforming it to the digital age, and making it a success and another of what happens if you don’t transform. Endres et al (2019), state that digital transformation requires continuous evolution of existing business models and the development of new hybrid business models.?Where a hybrid business model is driven by the creation of existing resources and innovation.?

It can be said that organisations are looking at ways to stay relevant post COVID-19:

1.????Enabling that rapid recovery growth of revenue, where they need to reposition themselves for long-term growth and rethink their revenue profile.?

2.????Reoptimising the operational and supply chain to mitigate against potential global crisis, hence driving and positioning work practices for the next normal.

3.????Flatter organisations provide a more dynamic and effective way of working, providing a clearer and faster way of making decisions.?In a world where fast beats slow, companies that can institutionalize these forms of speed and effectiveness will jump ahead of the competition

4.????Driving Digital adoption to enable innovation, where companies need to think quickly and accelerate digital solutions.?Companies need to be one step ahead of their competition, incorporating data analytics and creating new models to enable real-time decision-making to be proactive.

The underlying theme in all digital transformation is the use of technology and how technology will drive organisations to be efficient, successful, adaptable and competitive. To adapt, companies need to quickly rethink customer journeys and accelerate the development of digital solutions, moving more and more online transactions.?Driving efficiencies companies this could mean establishing new digital distribution models, for example, sales for cars to be online and delivered to the home.?

Technologies are more impactful than ever before. However, again, it’s not the technology that drives the disruption or transformation. It’s how it is used and adopted by customers, partners, competitors, and various stakeholders. Technologies with clear disruption potential include IoT technologies, artificial intelligence, edge computing,?virtual and augmented reality and blockchain. However, the most disruptive potential occurs when they get combined and enable new applications?as we see in the convergence of AI, IoT and big data analytics.

The final thought would be that Digital Transformation is not just around technology, there are many other elements that are needed for Digital Transformation to succeed, depending on your strategy, roadmap, goals, stakeholders, context and so forth. What also matters is that you don’t look at digital transformation from a pure technology, there are other aspects such as marketing, business processes, organisational culture, people empowerment partnerships and many more.