What is Digital Transformation?

Harish Thyagarajan

27 Aug 2018

What is Digital Transformation

Digital transformation can be defined as the integration of digital technologies into all areas of business, primarily changing how companies operate and deliver value to its customers. It helps a company to keep pace with emerging customer demands.

 

 

Digital transformation enables businesses to better compete in an economic landscape that is constantly changing as technology evolves. Therefore, it is necessary for any business that aims to survive into the future.

 

 

In the scope of this overview, we primarily look at the business dimension. The mentioned development of new competencies revolves around the capacities to be more innovative, agile, customer-centric and be able to capitalize on opportunities to change the status quo and also tap into the highly informative and service driven revenue. The efforts put into the digitization processes are most urgent.

 

 

With an effective digital transformation strategy, companies look to create the required capabilities to efficiently leverage the possibilities and opportunities of new technologies and its impact faster, and in a more innovative way in the future. The journey needs a staged approach with a well-defined roadmap, which involves a variety of stakeholders, beyond silos and limitations.

 

 

The human element is critical when it comes to the Digital transformation journey. Humans play a crucial role in the stages of transformation such as culture, collaboration, skills, empowerment and so on.

 

 

Since businesses also understand that they cannot digitize everything and as they also value the human interaction, there will always be on the offline element, depending on the context. Yet, even in the non-digital front, digital transformation plays a role in empowering any customer facing agent.

 

 

According to the IDC research, by the end of 2019, companies spending on digital transformation will reach $1.7 trillion worldwide, a 42% increase from 2017.

 

Key technologies

Technology drives the need for digitization and supports this process in an organization. Moreover, there is no single technology as such that enables digital transformation. There are multiple critical processes in a company that must have to transform.

 

Cloud computing, for instance, grants a company faster access to its required set of functionalities along with data storage. Commoditized information technology helps an organization in focusing its investments of talent acquisition and R&D on customized solutions that support the unique requirements and the processes that differentiate it in the marketplace.

 

 

Mobile platforms enable work to happen 24/7 from any location. Robust data programs that fuel machine learning and artificial intelligence technologies provide organizations with insights to drive more accurate decisions around sales, product development, and other strategic areas.

 

Digital transformation examples

Here are some of the companies that have successfully integrated digital transformation into their process.

 

Starbucks

Starbucks is one of the first few brands that implemented digital transformation, it launched the Starbucks digital ventures in the year 2009. Their mobile app offers a well-integrated and user-friendly digital loyalty platform and has become one of the main factors in building the digital ecosystem.

 

By letting customers redeem and earn stars and goodies within the app, this brand’s mobile app has become a really powerful tool to attract loyal customers. This approach even helped them increase their overall revenue.  As of 2017, the mobile app had close to 20 million active users in the US region alone.

 

Through digitization, the customer experience has also improved significantly. The customers can now place orders and make the payment with the app using the Order & Pay feature.  As a result, the waiting time is eliminated. As this is a more convenient option, a vast majority of customers prefer Mobile Order & Pay.

 

IKEA

IKEA gained massive popularity with its immersive digital campaigns. In the year 2009, IKEA was one of the first few companies to have gamification on social media platform, letting the customers win items when they just tag themselves on some of the items in a photograph.

 

Recently, the company has turned to AR in order to redefine customer experience. IKEA has gotten into a collaboration with Apple to build IKEA Place, an AR application that allows the customers to try out virtual, ready to assemble furniture in a physical environment, before making the final purchase decision.

 

JetBlue

Digitization has been one of the primary strategies for JetBlue. They focus on process efficiency methodologies by cutting off any transactions that do not contribute to the customer experience.

 

The process automation generally comes in the form of the automatic check-in process, where the customers are registered, allocated seats and sent their boarding passes one day before their flight.

 

The company’s in-flight Wi-Fi has also contributed to the crew’s productivity when it comes to attending to the customer needs. The cabin crews can use handheld devices such as iPads to access customer information, such as their category of loyalty membership, or certain personal details such as their birthday, wedding anniversary and so on.

 

This company has made an effort to keep up with technology consistently. One of their latest innovation is the smartwatch app, which offers information pertaining to the customer’s travel such as real-time flight updates, boarding pass details and so on.

 

Adding to that, Jetblue has also gone an extra mile in setting up Jetblue Technology Ventures, a subsidiary that is focused on research on future technologies.

How is Digital Transformation impacting various industries?

Digital Transformation in the Automotive Industry

Digitization plays a crucial role in automotive manufacturing. It equips the interior suppliers with necessary tools and helps them remain flexible and relevant in this modern era.

 

With an increase in customer demand for value-added vehicles, the automotive suppliers are facing an immense pressure in coming up with the changing preferences and requirements, while remaining operational and profitable.

 

Digitization in automotive manufacturing has made companies improve their competitiveness while setting a strong foundation for the future growth in a steadily evolving manufacturing landscape.

 

Digital Transformation in the Hospitality Industry

With emerging technologies, strict regulations and changing customer preferences, the hoteliers are now forced to be highly vigilant.

 

Today’s biggest challenge is about staying relevant in the market. The need to provide a fantastic customer experience and embracing new market requirements are the key drivers for the digitization in the hospitality industry.

Digital Transformation in the Oil and Gas Industry

Digital transformation is becoming a driving factor that is bringing about a change in the world around us. Connectivity has not only shown the potential to empower thousands of people but has also provided businesses with fantastic opportunities for value creation.

 

The Oil and Gas industry has played a significant role in transforming the economic condition of the world over the years. At present, it has the potential to redefine its boundaries using the power of digitization. Digitization can act as an enabler for tackling challenges and providing value to all the stakeholders.

 

Digital Transformation in the healthcare industry

The impact of digital technologies would be far more in the healthcare industry, which is yet to see the full impact of disruption due to technology. The increasing complexity of medical practice, globally aging population, rising demand for quality and consistent health care forces current systems to become smarter.

 

To this end, an evolution towards improving services and reducing costs has begun. The use of technologies was limited to the digitization of the EHR / EMR, rather than it providing the real impact and value to the providers and to the consumers.

 

Incorporating Digital Transformation

The best thing about the digital transformation is that there is no single solution. Changing how your company works with tomorrow’s technology depends completely on how you approach and work with today’s technology.

 

So, where exactly is your company positioned now? Is your company still relying on traditional software? Are your employees already familiar with the public cloud environment, but finding it hard to port apps back in-house?

 

Is your business ready to make the critical technological decisions? One must understand that wherever you are, that is exactly where you start.

 

Every company starts from a different place, there is no universally applicable digital transformation framework that fits every business needs. Your company may have to rethink the existing application, business processes, and development methodologies.

 

Going digital is a long-term strategy, It will involve a technological and cultural change in order to bring about a lasting organizational success. It need not be disruptive, however, the goal should be on getting comfortable with change before the market demands it.


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