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Why Enterprises Need Digital Transformation

5 minute read
David Roe avatar
While digital transformation creates substantial disruption, to remain competitive, there is no way of avoiding it in the current business climate. Here's why.

What's really driving digital transformation? In many cases the real push to digitize content and processes comes from the customer. If, however, a business has developed an effective customer relationship strategy that is only lightly digitized — i.e. a company that has developed its business strategy over the years before heavy digitization — does that company really need to undergo digital transformation? Is digital transformation overhyped? Is it even a good thing?

Digital Maturity

It’s important to note that digital maturity is not about having the latest technology, it is about how you approach the intersection of people, process and technology, said Tyson Hartman, a senior director at West Monroe Partners, a biz tech consultancy. For instance, one characteristic of digital maturity is “having a holistic understanding of customers thanks to multiple feedback channels.”

While technology may play a role in that, it is a process, no matter how “updated” your technology may be. Hartman said research they carried out identified accelerators for all stages of maturity enabling an organization to fast-track its maturity by prioritizing certain characteristics over others.

“Those with the lowest maturity should prioritize innovation that addresses customer pain points, we found, and those with the highest maturity should prioritize best-in-class,” he said.

Related Article: Change Management: The Key to Successful Digital Transformations

Strategy vs. Execution

Lionbridge provides marketing, testing and globalization services to clients around the world. Its CMO Jaime Punishill pointed out that digital transformation also necessarily entails business transformation. “One of my favorite sayings is ‘don't confuse strategy for execution.’ By any measure, digital technology has drastically upended the way buyers research, shop, get information, interact with brands, complain, or otherwise manage their lives, and this is true in every industry and most economies,” he said.

More important, these new technologies are challenging business models, shifting profits from one domain to the next, and downright wrecking the profit and loss statement of many old line businesses.

That said, many digital transformation efforts have been, and continue to be, misguided, mismanaged, misunderstood and just flat out mistakes. “For the enterprise, the idea of digital transformation is not BS. But the way so many companies actually go about it is often profoundly awful,” he added.

Having worked in technology for over 30 years, Ken McElrath, CEO and founder of cloud platform Skuid, points to the fall of many large businesses from positions they once thought secure, mostly due to their inability to create or catch the next wave of innovations. “So digital transformation isn’t hype, it’s reality,” he said.

“You can call it 'digital transformation' if you like, but that phrase has become jargon and even carries negative connotations for some people. It's really about business survival — about having a strategy for sustainability and viability. Truth is, digital innovation is happening faster than any of us can comprehend and often faster than businesses are able to adapt.”

Currently, he argues many businesses completely reinvent themselves by using apps built 8-10 times faster than previously possible. These apps evolved to exceed user expectations and drive engagement like never before. “Who will survive and win? Those willingly able to abandon the status quo and effectively adopt new technologies faster than anyone else,” he said.

Related Article:  6 Digital Transformation Challenges Enterprises Need To Overcome

Learning Opportunities

Transform or Disappear

You simply cannot survive without digital transformation, said Murtaza Hussain, founder of BizProspex. Before you ask whether you should initiate digital transformation, you need to ask yourself how long do you think your company would last without meeting the new trends and market innovations? “Digital transformation is not just a change; it's a revolution you bring into your business. Even if you are okay with applying your old marketing tactics, would your clients be okay with it?”

Not going through a digital transformation is letting a lot of golden opportunities go just like that, it's not overhyped — it's mandatory. The question isn't will the organization survive a digital transformation, but will it survive without one.

Any transformative initiative like digital transformation is not only about technologies, but also organizational adaptation. Just like the technologies, organizations have a number of adaptation challenges, according to Jesse Shiah, CEO of AgilePoint. There are three principal challenges:

1. Lack of Understanding

When workers don’t know what is possible, they will not know what to ask for. If employees don’t know how digital transformation will benefit them and their departments, they will not have any desire for it. It may be helpful to showcase digital transformation use case success stories from other companies, or even from your competitors, internally to drive awareness and identify new skillsets required.

2. Lack of an Overall Strategy

It is important to define an end-to-end strategy that defines projects, timelines, rollout, adoption, change management and implements digital transformation use cases.

It is highly recommended that you carefully select your pilot use cases. Ideally you want to start with simpler use cases, but with company-wide visibility to deliver quick wins to build up the momentum and confidence.

3. Lack of Budget and Resources

Digital transformation is very much about driving an innovative culture and encouraging employees to think outside the box and come up with original ideas. Don’t let the initiative succumb to the traditional ‘IT backlog’ trap that cites lacking budget or resources.

In fact, though the answers above were based on the premise that successful digital transformations are not related to technologies but to organizations, we would argue that the next generation no-to-low-code empowering technologies can enable IT to empower business experts (subject matters experts) to become citizen developers and participate in the development of apps to enable digital transformation, and will ultimately facilitate all of the above organizational change challenges.