An Explanation of the digital transformation:
/y1a4kstvu4q-Customer-driven and digital-first thinking is applied to every area of an organization, including its business models, customer experiences, procedures, and operations. To use data and drive intelligent processes, quicker and wiser decision-making, and real-time responsiveness to market disruptions, it uses AI, automation, hybrid cloud, and other digital technologies. Finally, it modifies consumer expectations and generates fresh commercial prospects.
The goal of a digital transformation:
The goal of a digital transformation has never been to implement a one-time fix, although many firms have done so in reaction to a single competitive threat or market shift. The MIT Sloan Management Review (link is external to ibm.com) states that “Digital Transformation is better thought of as continual adaptation to a constantly changing environment.”/y1a4kstvu4q.
Its objective is to establish a technical and operational base, evolve, and react as effectively as possible to erratic and constantly shifting client expectations, market conditions, and local or global events.
Important to note
It’s also important to note that although firms engage in digital transformation, the impact extends beyond the commercial world. Better life through software is what digital transformation is, to quote a Red Hat® specialist (link is external to ibm.com). That’s quite the definition, huh? It’s a good definition, mainly if “better living” entails working and playing in a setting that offers fresh possibilities, more convenience, and increased adaptability./y1a4kstvu4q.
So many aspects of business and life significantly differ from those of 20 years ago, thanks to digital change. In some way, we are living in the digital age because of this as well.
Drivers of the digital transformation
The main forces behind digital transformation have always been the consumer’s demands. It started when a flurry of new technologies made novel knowledge and talents available in novel contexts, including:
- Mobile gadgets
- the internet
- the IoT (Internet of Things)
- Utilizing the cloud
Pioneers and disruptors like Netflix and Amazon grabbed market share from their rivals by implementing these technologies to:
- Invent new business models for electronic commerce and delivery.
- Improve procedures (supply chain management, creation of new features).
- Continually enhance the consumer experience (tailored recommendations, in-context customer reviews).
- Competitors toiled and may have even vanished before adapting to offer more capabilities and convenience. Customers now demand to perform all business digitally, anytime, wherever, on any device, with easy access to all necessary supporting data and material./y1a4kstvu4q.
Meeting these ever-rising expectations is ultimately what digital transformation is all about. However, a transformation program that addresses a particular means to this objective is frequently the entrance point for a company.
Examples include:
Automating operational procedures./y1a4kstvu4q.
Increasing automation and AI will improve customer service and produce higher-value labour. They design intelligent workflows that streamline operational processes, boost output, and empower staff to make smarter decisions more quickly.
Protecting against commotion
In response to changes in competitive threats, market trends, and customer expectations, digital transformation integrates technology and best practices for quick product creation, new customer experiences, and new business models.
Managing change successfully
This procedure may involve updating legacy technology to function on modern systems and with contemporary software. Systems and processes are strengthened, and applications and data from mergers or acquisitions are assimilated./y1a4kstvu4q.
Enabling more resources to be used on demand with fewer restrictions:
The adoption of the broadest possible variety of products and services from ecosystem partners, leading providers of business solutions, and numerous cloud service providers are made possible by digital transformation.
The COVID-19 pandemic: the critical factor?
The COVID-19 pandemic in 2020 exposed every organization’s efforts and progress (or lack thereof) in digital transformation. Manufacturers realized how efficiently and rapidly they could launch new items. Retailers rushed to offer customers unique, safer shopping options. Employers embraced or developed technologies that allowed workers to work remotely.
Supply chains were the operational workflows that showed the most obvious flaws. According to the McKinsey Global Institute, supply chain disruptions lasting one month or more happen every 3.7 years, indicating they are constantly susceptible. /y1a4kstvu4q.
However, the United States unexpectedly imported roughly 50% less from significant trading partners immediately after the pandemic started (2). Companies were compelled to restructure their supply chains in weeks or months, often taking years or decades.
Effects should be long-lasting:
The effects should be long-lasting. According to a recent analysis by Twilio (PDF, 1.2 MB), COVID-19 is “the digital accelerant of the decade.” Industry analyst IDC predicted that global spending on digital transformation would reach USD 2.3 trillion in 2023 (3) before the outbreak in October 2019. Additionally, IDC forecasted in November 2021 that global investment in digital transformation will amount to USD 2.8 trillion in 2025, more than twice what was allotted in 2020 (4).
Technologies that are changing:
In an organization’s digital transformation strategy, practically any digital technology can be used. However, the following technologies appear to be crucial both now and shortly:
Robotics and artificial intelligence
The powers of the human mind can be imitated by a computer or machine thanks to artificial intelligence (AI) technologies like machine learning. AI picks up skills from examples by identifying objects, making choices, and more. AI can provide intelligence and real-time decision-making to any workflow when paired with automation./y1a4kstvu4q.
It may power various things, including cutting-edge smart devices, increasingly individualized customer and user experiences, and improved supply chain management, change management, and other workflows.
Blended cloud
Using orchestration, administration, and application portability, a hybrid cloud is a computing infrastructure that links on-premises IT, public cloud, and private cloud resources. A hybrid cloud offers the agility, scalability, and resilience needed for long-term success in digital transformation by generating a single, flexible, ideal cloud for running every workload and preventing an organization from being locked into a single platform or provider.
Microservices
In a cloud-native architecture known as microservices, several applications are made up of loosely connected, independently deployable components. Microservices act as a catalyst for digital disruption or as a tool to thwart it in conjunction with Agile or DevOps approaches./y1a4kstvu4q.
It allows businesses to roll out new software or product features daily or occasionally hundreds or thousands of times.
Network of Things
The Internet of Things (IoT) consists of gadgets and items with sensors that gather and send data online. Where digital technology meets physical reality is with IoT devices. Self-driving cars and supply chain logistics applications produce real-time data, which AI and big data analytics applications use to automate processes and make choices.
Blockchain
A blockchain is a distributed, permanent, and unchangeable ledger or record of electronic transactions. For those who need it, blockchain offers complete transaction transparency; it is unavailable for those who don’t. Businesses are using blockchain as the basis for transforming cross-border financial services and highly resilient supply chains.
Digitization
Information on paper is converted into digital data through digitization, also known as digitalization. Although it might seem like an outdated technique, practically every industry and sector is undergoing a digital transition. It is the cornerstone of fundamental reform programs in government, education, and healthcare (electronic medical records, or EMR).
Strategy for digital transformation:
One hundred organizations with 100 different digital transformation plans would probably produce 100 roadmaps. However, the majority of effective digital transformations adhere to two criteria and are in line with a company’s business strategy:
Starting with the ideal customer experience, they work backwards.
They address the transformation of operations holistically. Businesses begin by imagining the relationship they want customers to have with their brand and product throughout the months or years that they hope will remain clients. To foresee or anticipate how the customer’s wants or expectations may change and to identify possibilities for disruption, businesses must examine their market and technological trends./y1a4kstvu4q.
Afterwards, businesses decide how to transform the entire digital business, including the infrastructure, product development, operations, and workflows. Finally, they make the consumer experience come to life and constantly enhance it in reaction to chance and change. Exxon Mobile improves the experience of its customers at the gas station. This link displays a video at (02:32).
