Jan 10, 2023
Is Digital Transformation Dead? Our Thoughts For 2023
As any CIO, CTO, or technology-conscientious business leader is aware; digital transformation has been one of the chief driving forces behind organisational change for the last decade or more. In fact, you’re probably one of the 70% of organisations with a digital transformation strategy or are actively developing one. The drive to remain competitive and stay ahead has reached fever-pitch, with businesses spending $1.5 trillion in digital transformation in 2021.
However, as businesses go deeper and deeper down the rabbit hole, they are beginning to realise that simply investing in the technologies of the day is not enough. To get the maximum benefits from their efforts, businesses need to ensure these technologies are aligned with and explicitly enable their core objectives and future vision. This is where the concept of “business transformation” or “digital business transformation comes in.”
In this article, we’ll explore the different digital and business transformation concepts and how you can prepare your organisation for a total digital business transformation.
What is Digital Transformation?
Digital transformation is the integration of technologies into various areas of the business. Overall, the objective is to improve how you go about your daily operations, whether it’s being more productive, delivering more value to customers, or achieving smarter and more accurate decision-making.
Most business leaders today already realise the importance of digital transformation. It’s the key to continuous improvement, innovation, and competitiveness in an ever-evolving landscape. After all, the importance of digital transformation is hammered home in any business-IT-related seminar, workshop, keynote address, webinar, and podcast. From small, family-owned, brick-and-mortar businesses to border-defying enterprises, digital transformation is imperative for any business today.
When planning a digital transformation, businesses typically start with a “why” statement, such as:
- Reducing friction within or between business processes
- Eliminating hidden inefficiencies within specific operations
- Improving the customer experience
- Improving productivity or profits
Undoubtedly, technology is a crucial factor underpinning the digital transformation process. Newer technologies are better equipped to take advantage of new infrastructure developments (5G, for example), tackle new challenges, and build on the wisdom of learning from past mistakes. Newer technologies also tend to be more scalable, flexible, intelligent, secure, and capable of meeting the growing expectations of end-users.
Unfortunately, to their detriment, many only see digital transformation through the narrow lens of technology. That means the software and hardware solutions you employ to enhance or replace existing business practices. However, a true change that’s sustainable, long-lasting, and groundbreaking involves more than just installing (and successfully using) technologies. Taking this narrow approach leaves many of the potential benefits of digital transformation on the table.
True digital transformation goes far deeper than just the technologies involved. It requires fundamentally rethinking your relationship with technology, including your company culture, operating models, and how you approach and manage customer relations. It’s coming to terms with the fact that, increasingly, the technologies you use are becoming the business.
Unfortunately, the term “digital transformation” has become so enmeshed with this old way of thinking that perhaps, it’s time to adopt a new term that better encapsulates this rethink of the digital transformation process. That’s where the idea of “business transformation” comes in, which we’ll explore further below.
What is Business Transformation?
Business transformation is, in some ways, an umbrella term of which digital transformation is a crucial component. While digital transformation has conventionally been associated with constantly improving business technologies, business transformation takes a more holistic approach. It’s a “whole-of-business” approach that’s also concerned with ensuring positive outcomes, whether it’s being more competitive, efficient, or delivering more value to customers.
It just so happens that technology is one of the main enablers of these positive outcomes.
Acquiring and implementing technologies is one thing. However, ensuring they are aligned with your business strategy and measurable outcomes is another. Investing money, time, and effort in the most impressive technologies is pointless if it’s done in isolation from your business objectives.
No matter how savvy or well-informed your digital transformation attempts are, the process is typically expensive, and there will be a disruptive transition phase. So, any investment must bear tangible fruit that clearly satisfies your expectations.
This requires an ideological shift from looking at transforming traditional silos individually to leveraging transformation to the benefit of the company as a whole. Consequently, business transformation is not about addressing specific “why’s” or problem statements but realising wholesale business improvements in line with one particular business strategy. For example, becoming a more customer-centric firm, expanding into new or global markets, or switching to agile work methodologies.
In short, while technology is a key (and some would say indispensable) driver of digital business transformation, it should not be its primary motivation. The main motivating factor should always be the positive business outcomes you want to achieve.
Hardware and software, as well as the security, best practices, and compliance-related standards that govern them, are evolving at a relentless pace. To stay ahead, this forces businesses to be more agile, constantly thinking about innovation and positive change instead of maintaining the status quo. This involves a shift in attitude towards change, from viewing it as a scary and disruptive force to one of optimism and constant improvement.
To do this, companies must get comfortable with experimenting and failing, often and quickly. If you can do this without skipping a beat or wallowing in your failures, you’ll be able to quickly iterate through different models and pick the best one to take your digital transformation forward.
This has led many businesses to adopt agile business models or frameworks. While agile methodologies were initially developed in the context of software development, companies across many verticals have realised their usefulness. After all, most businesses today interface with customers through digital products or services.
The “start small and build” approach, combined with rapid and cheap iterations, makes the entire process more manageable. This is particularly true for businesses that are relatively new to digital transformation or managing their own portfolio of digital products and services.
Small-scale, attainable objectives help ensure that efforts align with success criteria and the transformation roadmap. It also makes it possible to clearly showcase results to business stakeholders and more readily acquire additional guidance.
As a final point in its favour, approaching change from the business transformation perspective will help you become more resilient and receptive to change. If adequately embraced, it will instill the necessary people and culture change for a complete business digital transformation.
How to Approach the Digital Business Transformation Process
Understandably, planning and launching a business transformation campaign can seem daunting. To help pave the way to success, you first must ensure that your project has the necessary drive behind it. This means preparing your most important asset, your people, and your mindset for the change process:
- People & culture change: Ground-level employees, and even customers, need to see the positive impact changes will have on their lives. Business transformation should generate excitement and hope instead of fear and insecurity. At the same time, employees might need time, guidance, training, and resources to adapt to new working models, like agile frameworks.
- Stakeholder commitment, leadership, and involvement: Stakeholders at all levels need to feel included and invested in the transformation process. There should also be top-down support and leadership to ensure the necessary guidance and resources is always on hand. Everyone needs to understand the “whys,” “how’s,” “when,” and “what’s” so they feel included in the journey and not left behind by it.
- Determining actual baselining: You can only validate achieving measurable outcomes if you have a benchmark to measure the success of your efforts. This is another area where technology has an important role to play. By using mechanisms like process & task mining, you can quantify the improvements in your business workflows by comparing and analysing performance across the transformation journey.
- Experiment and adapt: As with all medium-to-long-term business strategy-related undertakings, you rarely lay the golden egg on your first try. It would help if you approached business transformation from a humble and receptive standing. Lessons will be learned, and you need to incorporate newfound wisdom into the rest of your journey. This means not rigorously sticking to a methodology or framework and forcing it if it looks like it’s not working but changing things up when it seems like there are better routes to where you want to go.
Amongst a limited group of organisations that understand and have developed technology solutions to support Digital Business Transformation is UiPath; providing a raft of technology capabilities that are focused on addressing business challenges and are aligned to the ways in which organisations operate
If you need more convincing, look at your peers. 56% of businesses prioritise digital transformation, and spending in this field is expected to quadruple to $6.8 trillion by 2023, with 87% of leaders envisioning digital transformation to disrupt their industry. This means you must start thinking about digital transformation today to avoid falling victim to disruptive forces.
However, up to 70% of digital transformations still fail simply because organisations lack the proper experience, ambition, and know-how to realise their ambitions. This is where it pays to work with a seasoned partner like Innovo that can guide you on your intelligent automation, tooling and business focused digital transformation journey.
Contact us today to see how our digital transformation services in Australia can help you realise your vision.