Our digital transformation blog will come as a three-part series. For the first part, we will uncover the basic elements of digital transformation. We’ll also discuss the intricate areas to understand why it’s becoming a global trend nowadays that defines the success of businesses today.
What is digital transformation?
Digital transformation, also known as DX, has been around since the early days of technology, especially when digital platforms were popularized. Digital transformation integrates and uses digital technologies to make or improve already existing technological processes in companies. This includes culture, ways of work, customer relationships, and operational activities. The MIT Sloan Management Review states, “digital transformation is better thought of as a continual adaptation to a constantly changing environment”1. Digital transformation begins and ends with how businesses use it holistically. It transcends through sales, marketing, product management, customer service, and other areas of the company.
Digital transformation is not just about creating new types of businesses or creating new units in the company. It’s more about being fast and efficient in adapting to a digital-first approach in all aspects of a business, but it doesn’t have to be complicated and high-tech like using artificial intelligence or machine learning. Some different paths and strategies can lead to digital transformation.
Consequently, digital transformation is inherently linked to general strategic series of changes in companies that result in the implementation of digital technologies2. This makes digital transformation the company-wide phenomenon or holistic approach with broad organizational implications, primarily the core of business strategies3.
“Companies leveraging digital transformation can stay ahead of the curve.”
How can businesses benefit from digital transformation?
One of the visible consequences of the COVID19 is that it will be the “infusion of data-enabled services into ever more aspects of life”4. This can only mean that we should expect digital transformation to become a much bigger key factor for organizations regardless of the size. Digital transformation for most businesses means that it’s synonymous with their company survival.
In today’s competition, businesses should proactively find ways to incorporate a holistic culture of adopting digital transformation. With the growing need for faster and more efficient delivery of products and services, businesses of all sizes are highly relying on technology. On top of this, digital transformation can enable businesses to deliver cutting-edge customer experiences and simplify internal key processes5. There’s no better time than now to use available technological tools and applications related to digital transformation. It might be overwhelming for most companies to understand where DX can be applied or where to start with the implementation.
Digital transformation efforts can significantly benefit firms through faster and efficient access to information, and communication between employees, shareholders, suppliers, and customers. At the same time, digital transformation can potentially be a key for most businesses to expand and reach global markets through reductions in costs related to logistics, transport, legal documentations, and border operations6.
Implementing tools and processes in businesses can create an efficient way of communicating. This way, companies can easily relay clear forms of communication to internal and external stakeholders, especially in addressing customers’ concerns. Also, implementing a digital-forward workspace and culture can attract top talents, which are becoming important for businesses to stay competitive in their hiring strategies in today’s dynamic job market.
What is the current trend in digital transformation?
The global pandemic of 2020 acted as a catalyst for many organizations to adapt to changes when it comes to technology and advancement. Businesses have adopted innovative technologies to benefit their revenue growth, customer relationship, and employee retention rate. Now, companies are investing in technology to comply with these new trends, making digital transformation the centerpiece of operational agility and a driver for innovation. Companies leveraging digital transformation can stay ahead of the curve. In a research study by Accenture, they found that leaders have doubled their efforts on tech investments. As a result, they’re now growing five times faster than in the past three years.
Top digital transformation trends
1. Cloud technology
With companies shifting their strategies from data centers to cloud services, digital transformation is taking the limelight worldwide. Cloud technology has enabled businesses to access and use data anytime, anywhere. Cloud Technology empowers companies to re-structure their new ways of work in a remote setup without compromising team collaborations and real-time business operations. Cloud computing also benefits from the secure storage of massive amounts of data accessed remotely.
2. Remote work
Because COVID19 caused severe business disruption in various industries, remote work offered an alternative for businesses to continue their operations. Companies have adopted virtual communication channels like Google Meets, Zoom, Slack, and Teams to enhance the virtual work environment with digital transformation.
3. Artificial intelligence and machine learning
Enabling a computer or machine to mimic the specific skills of the human mind can empower business operations like marketing automation and sales tools. AI has proven to be a valuable time saver when creating personalized content experiences. AI and ML can drive everything from innovative and Smart products and improving customer experience to change management.
4. internet of things (IoT)
Internet of Things (IoT) are devices equipped with sensors enabled to detect, collect, and transmit data over the internet. IoT devices are where intangible digital technology meets the physical reality. IoT provides significant value through devices that collect enormous amounts of data coupled with algorithms to process that data.
5. Transparent privacy policy
One of the most prominent issues in digital transformation is the security of personal information, including names, home addresses, contact information, bank details, and even behavioral patterns. A well-structured privacy policy gives customers confidence that their data is handled with care and informs them how they can control their private information.
6. Blockchain technology, NFTs, and the Metaverse
A blockchain provides full disclosure of transactions and transparency to those who require it as an immutable ledger or record of electronic agreements. Also, blockchains are associated with cryptocurrencies like Bitcoin, but blockchains are also proactive in business operations. The golden era of non-fungible tokens (NFTs) has recently attracted the media globally, where unique digital collectibles like art and in-game items can be bought and traded.
For the next blog post of the digital transformation series, we will discuss how companies should approach and implement digital transformation.
How can Nubinary help?
With the changing trends in the business world, it is becoming more and more necessary to embrace business digital transformation. Digital transformation is the way of the future. But, to succeed in this ever-changing environment, you need a partner who understands your business and will help you get there. With NuBinary’s Fractional CTO services, we can assist you in bringing digital transformation to your business. We are a team of passionate professionals committed to providing solutions that align with your goals. Get in touch with NuBinary by visiting https://nubinary.com/work-with-us.
REFERENCES:
(1) Kane, G. (2017). Digital Transformation is a Misnomer. MIT Sloan Management Review . https://sloanreview.mit.edu/article/digital-transformation-is-a-misnomer/
(2) Sebastian, I. M., et al..(2017). How big old companies navigate digital transformation. MIS Quarterly Executive, 16(3), 197–213.
(3) Agarwal, R., Gao, G. G., DesRoches, C., & Jha, A. K. (2010). The digital transformation of healthcare: Current status and the road ahead. Information Systems Research, 21(4), 796–809.
(4) The Economist (2020). The changes Covid19 is forcing on to business. https://www.economist.com/briefing/2020/04/11/the-changes-covid-19-is-forcing-on-to-business
(5) Tollefson, R. (2021). The fundamentals of digital transformation for small businesses. https://www.americanexpress.com/en-us/business/trends-and-insights/articles/the-fundamentals-of-digital-transformation-for-small-businesses/
(6) OECD. (2021). Policy highlights. The digital transformation of SMEs. https://www.oecd.org/industry/smes/PH-SME-Digitalisation-final.pdf
(7) Accenture. Scaling digital transformationhttps://www.accenture.com/us-en/insights/technology/scaling-enterprise-digital-transformation
