Digital Transformation Fundamentals
Digital transformation is “a necessary disruption,” says CIO magazine. This was already true pre-2020, but “Companies’ adoption of digital technologies…sped up by three to seven years in just months,” due to pandemic-era pressures.
Today, the rising cost of maintaining legacy systems and the unprecedented demand for IT talent are forcing business leaders to find ways to automate many day-to-day processes.
Digital transformation is widely touted—but it’s a very broad concept that can be too generic, even misleading. We’re told we need it, but what is it, really?
What is digital transformation?
Digital transformation is the process of strategically reimagining and fundamentally overhauling how an organization uses people, processes, and technology—focusing on seamless integration of business models and digital technology across all areas to enhance operations, bring better value to the customer, and drive revenue.
The benefits of well-managed digital transformation are immense: improved data collection, and data-driven customer insights; smoother transactions and enhanced customer experience; better resource management; refined workflows; increased efficiency, flexibility, scalability, agility, productivity, and profitability; a digital culture shift within your organization that promotes collaboration and upskilling, and encourages challenging the status quo and the adoption of a growth mindset; and above all, complete, company-wide integration of business and technology systems.
At its best, digital transformation is empowerment—helping you harness the power of data to deliver optimized experience for user and customer, and grow your business.
However, it’s vital to understand that digital transformation is not an end in itself. “The point of digital transformation isn’t to become digital…. [but] to generate value for the business,” says McKinsey Digital.
Many company leaders, enticed by the promises of shiny new technology, approach digital transformation as if it’s an Emerald City—a promised land to arrive at—only to be disappointed when the new technology is not a wizard or pair of ruby slippers that brings instant change and magical results.
Digital transformation initiatives can falter or fail to deliver for numerous reasons, but according to a report from Capgemini Digital Transformation Institute and MIT Sloan School of Management, it typically boils down to a few factors, including insufficient leadership, a disconnect between the IT and business departments, lack of support and engagement within the company culture, subpar operations, cost-reduction as the main impetus, and expectation of immediate, dramatic change. Also problematic is a hyper-focus on the software itself rather than the business metamorphosis it’s meant to facilitate.
Digital transformation isn’t a destination, or a singular one-and-done procedure, but a paradigm shift, an evolution, an ongoing process of using technology to revolutionize the way business is done.
According to Harvard Business Review, “If digital transformation is supposed to be meaningful and lasting, companies must think about changes in products and processes more than changes in technology. But many companies struggle to look past the shiny promises that usually accompany new technologies. As a result, they dedicate too many resources and too much attention to the technology side of digital transformation projects….One approach to counter this imbalance is to think of digitalization as business model innovation rather than technology-related change.”
7 Key Takeaways:
Business first. It’s essential to identify clear business strategy and goals based on desired outcomes before investing in new technology.
Work “backwards.” Design your new systems based on desired end product and customer experience.
Align IT and Business sides of your organization around these objectives. While the function of IT departments used to be mainly to fix tech problems, now they are innovators and co-creators with enterprise leaders. Reciprocally, today’s company leaders need to know what they want from technology. Collaborate across all departments to deliver the most value for the customer.
Software is only one piece of the puzzle. Technology is a key aspect of digital transformation, but innovative apps and platforms are a means to an end—not an end in themselves.
Know what you want from the data. Having data is not enough. What outcomes do you want from it? How will you manage and govern the data? What will you do with the insights it provides? How will you stay agile and adjust to data insights? How will you ensure that your company culture embraces the data and utilizes it in a cohesive way?
Get everyone on board. It’s not unusual for there to be ambivalence, even pushback, from your staff if they fear that automation threatens their jobs. Focus on your team and operating model, defining roles, responsibilities, and decision-making power for all stakeholders to build morale and enthusiasm, and foster a digital mindset within company culture. “Emphasize that the digital transformation process is an opportunity for employees to upgrade their expertise to suit the marketplace of the future,” says Harvard Business Review.
Build smart partnerships. At Lukasa, we’re a fully integrated team of business and technology experts—veteran consultants with abundant development resources at the ready. We partner with your existing team and work right alongside you, leveraging insider knowledge to gain a broad and deep understanding of your company’s current systems and big objectives. We help you ask the key questions, strategize, and adopt the technologies that support your immediate and long-term goals—ensuring that digital transformation optimizes your organization for maximum agility, productivity, customer satisfaction, and growth. Lukasa—Business Reimagined.
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Lukasa is a business and technology modernization firm focused on process analysis and improvement, system and data unification, cloud migration, tailor-made software and implementation—maximizing efficiency and growth.