Digital Transformation, is it a disruptor, more of the same or just noise?

By Chris Howard, National Solutions Consulting Office Manager at Hitachi Data Systems

If you follow the current industry updates, you can’t help but come across articles about digital transformation.   Digital transformation is the use of technology in such a way that it creates new capabilities and innovation for customers rather than simply to support current business practices.   If you believe the media hype, digital transformation will help organisations evolve, improve and gain invaluable insights that not only help them improve their current work practices, but innovate and create new models of work that lead to greater outcomes.

From my perspective, I suggest that digital transformation is simply the appropriate use of technology to deliver:

1. Improved work processes, including the automation of these
2. Development of new capabilities, such as machine to machine communications and reporting
3. Development and reporting on data which previously may not have been analysed, to create insight and actionable outcomes.

While there are more examples, my view is that these outcomes are desires and requirements that businesses have had for many years and the notion that this concept or idea is the new disruptor for technology is an overstatement.   Businesses have been using technology for many years in attempts (some successful and some less so) to improve what they do, move into new business lines and gain insight into their current operations to develop a competitive advantage.

Chris Howard

Does this then suggest that the current “hype” around digital transformation is just that? Is it noise that detracts business leaders from their focus on business growth, customer value and shareholder returns?  Is this a repackaging of the same strategies and solutions in a new shiny wrapper?

OR

Is digital transformation now an attainable goal due to increasing technology capability growth and its ability to substantially increase returns?  Organisations that can implement technologies and realise the benefits of digital transformations can achieve significant benefits for themselves and the customers they deliver to.  Automation, reporting and environment awareness, and greater functionality have increased to a point where:

1. Customers have a better experience and relationship with the businesses that successfully implement digitally transformed work processes.
2. Business work processes and operations become streamlined, generating more consistent, higher quality and faster response times, leading to reduced costs and better customer experiences.
3.  Assuming points 1 and 2 above are correct, customers will hold the business (brand) in higher esteem and not only return themselves, but will share their good experience with other potential customers.
4. Business leaders will have quicker access to actionable information to lead and guide their business.  Having access to meaningful information will allow the business leaders to more quickly adjust to changes in customer demand and look for internal operational efficiencies.

IDC predicts that two-thirds of Global 2000 CEOs will put Digital Transformation at the center of their corporate strategy. Gartner has suggested that organisations who have not established themselves in the digital age, will find it much more difficult to maintain a sense of relevance.

Combining Digital Transformation with strategy development, organisations must ask, what does good look like and how do they pursue digital transformation to deliver benefits. Strategic focus on operational efficiency, customer intimacy and product specialisation can all benefit from Digital Transformation.  How do organisations realise benefit and create real outcomes from change programs then?

To realise the benefits of Digital Transformation, organisations must better access, integrate and analyze their data to create business insights that empower a real change.  Taking data from a wide variety of sources, integrating it and creating executable information is key.  Therefore, data becomes the common lens for business and IT leaders to shape their digital transformation.  Organisations have tremendous amounts of data stored in line of business and organisational support applications; leading organisations have taken steps to better manage, govern, consolidate and analyse this data into insightful information, on which action can be taken.

How can organisations provide unique customer experiences while maintaining competitive advantage? This must be done through gaining agility and speed in this new digital age.  This demands that IT functions must operate under a new paradigm, capitalising on operational efficiency and stability as well as integration of new technologies that help business peers pursue new business models.  To achieve these outcomes, data becomes the foundation that, properly shaped and modeled, turns into actionable information and creates business insights and strategic outcomes.

This challenge will only continue to grow as the volume and complexity of data that we struggle to manage today will be dwarfed by what is generated by an ever growing number of data creators.  For example, machine to machine applications, smart devices, even our friendly sports tracking bands are creating more and more data sets.  The term I hear frequently is the Internet of Things (IoT).   This growth in data volume is well established; this in turn, will lead to more requirements to capture, consolidate and analyse these elements into insights and actions.

With these growing challenges appearing for nearly all organisations, now is the time to analyse, plan and act.  A properly structured strategy and action plan will help organisations to achieve Digital Transformation and competitive advantage.