Digital transformation is a must for every company
by Veronika Schipper, on Nov 12, 2018, 2:45:29 PM
Digital transformation (DX) is a widely used - if not overused- term in many corporations nowadays. Companies are being challenged to get answers to questions such as: How to create the best value? How to defend their product or service and how to retain their customers? All of this is putting extra pressure on executives who are recognising that traditional business models are not as useful as they used to be.
What is digital transformation?
Organisations undergo digital transformation to leverage the full potential of digital technology that affects not only the internal processes but also the way the people work and think. This digital change is essential to every business that wants to get closer to their customers, see whether their products or services are performing and how to meet the customers' expectations.
IDC predicts that spending on digital transformation will reach $1.7 trillion this year worldwide which is sixteen per cent more than last year. In Europe, IT spend on DX is expected to exceed $270 billion. Companies are looking to improve customer experience (54%), create new business models (50%) and develop new partnerships (45%). That means more investment in technologies such as cloud computing, artificial intelligence, machine learning and IoT is going to/will continue happening.
Top challenges for Digital Transformation
Although businesses got the message and started putting digital transformation on their strategic planning, the everyday practice is not happening as fast as expected. More than half of the companies are stuck. They come across obstacles and challenges, so they try, experiment and take on each step at scale. Three main reasons hold organisations back from a digital transformation, which include:
- Legacy systems
- Lack of skills to support the change
- Organisational culture
The Digital Transformation Journey
A tiny percentage of people likes changes. Stepping into something unknown brings insecurity to their professional life which in the worst case might lead to a job loss. Digital transformation is a change way too risky for many employees and might feel like a threat. But businesses that see changes happening in their industry and are not willing to accept them is far more of a risk than continue with their traditional processes.
The transformation is as much about technological change than it is about people. Adding essential job functions in the organisation such as software engineers, UX designer or data scientists, training employees and experimenting with emerging technologies are first steps forward.
Diagnosing what challenges your company is facing and what solutions are available on the market to achieve them is critical. Once these are defined, companies can start planning on how to go digital. The options could be looking at back-end transformation and building strong IT infrastructure and digital ecosystems using cloud computing, big data analytics and artificial intelligence. Other option would be front-end transformation - redesigning products and bringing a technological aspect to the consumer using the internet of things technology, transforming factories using advanced automation and machine learning.
These technologies are, together with agile development and DevOps, the centre of many digital transformations. No matter which ways companies decide to go, the goals remains the same to all - bringing value to your customers and your shareholders.