What is digital transformation? The truth behind the buzzword

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What is digital transformation? The truth behind the buzzword

You may have heard the term many times, but what does digital transformation really mean and what can it do for your business?

Look beyond the hype and you'll find a daunting task at the heart of digital transformation. Rather than focusing on any single IT project, digital transformation describes a series of projects that, together, change every facet of an organisation, from back office operations to customer interactions, often with the end goal of making these different processes intrinsically linked.

What is digital transformation?

The Global Center for Digital Business Transformation says that "organizational change is the foundation of digital business transformation". That's because changing the nature of an organisation means changing the way people work, challenging their mindsets and the daily work processes and strategies that they rely upon. While these present the most difficult problems, they also yield the most worthwhile rewards, allowing a business to become more efficient, data-driven and nimble, taking advantage of more business opportunities.

Why is it important?

Worldwide, digital transformation could be worth US$18 trillion in additional business value, according to analyst house IDC. 

Meanwhile, research firm Gartner's CIO Agenda suggests digital business will represent an average of 36% of a business's overall revenue by 2020.

The group's report, Gartner's IT Market Clocks for 2016: Digital Transformation Demands Rapid IT Modernization, found that 66% of companies doing digital transformation expect to generate more revenue from their operations, while 48% predict that more business will arrive through digital channels. Other reasons for doing it were to empower employees with digital tools (cited by 40%) and to reduce costs (cited by 39%). It's clear that there's no better time to embark on your own digital transformation journey if you want to reap the rewards down the line.

Define 'digital' in digital transformation

While the focus is on changing how the business works at every level, technology underpins all digital transformation projects. But what technology?

Obviously this changes as time goes on, but typically businesses want to adopt technologies that help them harness and make sense of the vast quantities of data they are sitting on, as well as preparing for trends like the Internet of Things (IoT) and mobile.

That means analytics tools are high up on the agenda, as well as cloud computing, which lets you store data outside your own data centre, potentially closing this down. You might also want to focus on collaborative tools, like file-sharing, mobile devices, and apps, that let your employees work wherever they are, and which give them instant access to information -- especially useful for salespeople visiting customers, for instance.

How do I start doing digital transformation?

Digital transformation is a long and difficult journey, but there are strategies to help make it easier.

Analyst firm Forrester recommends a dual-path approach, in which IT can pursue long term transformation goals while hitting a series of quick-wins to generate business buy-in.

In its report Take Two Technology Roads To Digital Experience Success, Forrester analyst Ted Schadler advises that you start by prioritising investments that benefit customers and generate business value, before splitting the strategy into those two paths of quick projects and longer term transformation.

Of the quick-win path, he says: "On this path, you will turn on functionality you aren't using and extend your existing platform with new software. The cloud is your best way to layer in new functionality without rebuilding your existing platform."

Talking about the longer-term path, he adds: "You will define, select, and implement a modern platform to deliver long-term agility and capabilities. The cloud is also your friend here: It's the future of digital experience platforms."

This article originally appeared at IT Pro. Image credit: Bigstock.

Copyright © ITPro, Dennis Publishing

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