Much hand wringing is done over the definition of Digital Transformation, but the meaning is very simple – The use of technology to modernize from an old to a new business model.
The business model part is key and often the most under looked aspect. It is not simply a process of adopting the latest buzzword technologies, such as AI or RPA, such that you only improve efficiency within a silo.
For some organizations this can mean an entirely new exercise in digitization – Converting paper-based forms workflow to a new online service, but others may already be at this point.
So for them it can mean the adoption of a new generation and suite of technologies that make possible new capabilities that weren’t possible before.
In both cases the key dynamic is business model capabilities that weren’t possible before, enabling key strategic advances – The launch of a new digital product, an ability to serve more customers in a new way or an international expansion of the business.
The Enterprisers describe it as:
Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.
In short it is these advances that are the critical dynamic. Digital Transformation is a process of an organization defining what advances it wishes to achieve and then adopting the technologies required to achieve them. It can also be fed by a bottom up cycle, understanding what capabilities certain technologies make possible, and factoring these into the strategic planning activity.