What is Digital Transformation?
Generally speaking, we can describe digital transformation as the incorporation of digital technology across the entire enterprise, changing how businesses deliver value to consumers. But since digital transformation is particular to each company, a definition that covers all aspects can be difficult to identify. In reality, it is a cultural change that allows companies to innovate frequently, continuously challenge the status quo, and become comfortable with failure. This can mean opting for relatively new operations and walking away from long-standing business processes.
According to author Greg Verdino, he focuses on what businesses that undergo digital transformation may expect to achieve. “Digital transformation closes the gap between what digital customers already expect and what analog businesses actually deliver.”
Digital transformation requires a change in leadership, creative thinking, promoting innovation and new business models, integrating resource digitization and growing software use to enhance the experience of staff, consumers, vendors, partners and shareholders in your company. Talk about what digital transformation can mean to your company – in practice – and how you're going for articulate it. Digital is a loaded word that for most people means a lot of things.
Leadership and tradition are at the heart of it all. You could have the vision of the consumer, the products and services, information, and really cool technologies — but if leadership and culture are not at heart, it will fail. It is essential to understand what digital means for your company – whether you are an economic, agricultural, pharmaceutical, or retail entity.
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Why does digital transformation matter?
There exist several reasons a company may begin their digital transformation. But the most likely reason is because they need to. It has become an issue of survival. Seeing as transformation can be dangerous and costly, businesses are finally undergoing transformation when they realize they have failed to evolve.
John Marcante, CIO of Vanguard, points out: “Just look at the S&P 500. In 1958, U.S. corporations remained on that index for an average of 61 years, according to the American Enterprise Foundation. By 2011, it was 18 years. Today, companies are being replaced on the S&P approximately every two weeks. Technology has driven this shift, and companies that want to succeed must understand how to merge technology with strategy.”
Speed has become an imperative for everyone to do business. IT leaders face pressure to prove that digital projects continue to turn the entire organization into increased agility and speed. Within today's rapidly evolving companies, top IT leaders need to match the pace of change, fall back, or lead the pack. This is the existential issue at stake in today's digitally-infused times, where out - of-the-box experimentation and path finding must actively support bold action. This must be done when balancing daily operational issues, delivery of service, and the confounding intricacies of the unexpected, such as a major cyber attack or breach of privacy. This year, the CIO must be a supremely masterful task juggler as well as an effective front-end digital leader.