Digital transformation is all the rage these days. But what, exactly, does that mean? And how do you go about it? There are four main areas of digital transformation: technology, process, governance, and culture. Let’s take a closer look at each one.
What are the Four Main Areas of Digital Transformation?
Leveraging contemporary technology to develop new – or change current – company processes, culture, and consumer experiences is known as digital transformation.
This reimagining of business in the digital age provides businesses with the tools to compete and fulfil shifting market demands.
This transformation extends beyond conventional responsibilities such as sales, marketing, and customer service and is primarily concerned with how firms think about and interact with consumers. Organizations have the chance to re-examine how they do business with the inclusion of new technologies.
Transformation of Processes
Process transformation requires changing the parts of a company’s processes to reach new objectives. When a company’s business processes need to be completely overhauled, it usually turns to business process transformation.
A change of this magnitude will update an organization’s operations, integrate new technology, save money, and better integrate essential systems.
Business process transformation is related to business process management in that it aims to make larger and more radical changes.
Transformation of Business Models
Many businesses are investing in digital technology to change their traditional business strategies. There are countless instances of this type of innovation in today’s business world, ranging from Netflix’s reinvention of video distribution to Apple’s reinvention of music delivery (iTunes) to Uber’s reinvention of the taxi sector.
These well-known brands are not the only ones to make significant adjustments to their business strategy. Insurance firms like Allstate and Metromile are leveraging data and analytics to unbundle insurance contracts and charge consumers by the mile, ushering in a radical auto insurance business model shift.
Corporations may accomplish a makeover that leads to major new prospects for development by reimagining and adding to their present model for success. This is why other businesses should aim to follow in their footsteps.
Transformation of a Domain
Domain transformation is an issue that does not receive much attention but has significant potential. New technologies have the potential to reshape products and services, break industry boundaries, and provide doors for non-traditional rivals. This type of wholesale change provides a tremendous opportunity for firms to generate new value.
The story of Amazon, which moved into a new market domain with the introduction of Amazon Web Services, is an outstanding example of how domain transition works (AWS). AWS is currently the world’s largest cloud computing/infrastructure service provider, having surpassed high-profile behemoths Microsoft and IBM.
Transformation of Culture/Organisation
More than merely upgrading technology or revamping goods are required for a successful digital transformation. If a company fails to match its digital transformation initiatives with its internal values and habits, it can hurt its culture.
Negative consequences include sluggish adoption of digital technology, loss of market competitiveness, the ultimate collapse of the endeavour, and lost productivity and money.
A thorough and collaborative effort, on the other hand, may assist reshape the culture to comprehend, accept, and accelerate digital transformation.
Leaders must develop a clear vision of the transition and continuously convey it throughout the business. They must be clear about sensible risks and why they are worthwhile.