“Digital transformation" may have begun life as something of a buzz term, but it has long since evolved. If anything, it's a metaphor - one that helps better define where your organization is today, where it hopes to be tomorrow and the tech-driven journey to connect the two. In this series on digital transformation, we'll dive deeper into what it means, what it represents and more. We'll shatter some of the myths and preconceived notions that exist about it and closely examine the things that vary for transformations in small businesses, enterprises and government organizations - and the themes that remain a constant throughout.
Technology itself is just a tool - the same as anything else. Having access to the "latest and greatest" that modern technology has to offer ultimately won't do a business any good if the goals they have in mind don't require those tools in the first place. Only by having the right tool for the right job will you be able to guarantee the absolute best results.
While that premise sounds simple, the idea that it is built on is valid just the same. Consider the fact that according to one report, roughly 3/4ths of the $80 billion the federal government spends on IT each year is used almost exclusively to keep legacy systems running. Think about that. $60 billion is not creating better outcomes. It's not increasing organizational efficiency making sure that technology and long-term strategies are better aligned. It's going towards preserving the status quo - a status quo that is quickly becoming more and more irrelevant with each passing day.
There is perhaps no better example as to why digital transformation is so important than this one. It isn't about spending money on IT because "that's what you're supposed to do in the 21st century." It's about spending in a way that allows you to stop spinning your wheels and start moving forward with full force into the next 10 years and beyond.
What Is Digital Transformation?
Though the technology at the core of digital transformation may be sophisticated, the concept itself is actually incredibly straightforward. In essence, it involves the evolution that an organization goes through to guarantee that the digital technology that they use every day is as closely aligned with how that business actually operates as possible, allowing them to deliver as much value to their customers as possible.
It's about working "smarter, not harder," yes. But it's also about something much more important than that. Digital transformation is the process of aligning your technology with your actual business strategy, making sure that this tech puts you in the best possible position to both meet the needs of today and prepare yourself for the possible challenges of tomorrow in the most natural and fluid way possible.
For just one example of this idea in action, think about things in terms of the cloud. As of 2014, 92% of all small businesses were using at least one cloud-based business solution on a daily basis. That simple shift has enabled those same businesses to reduce their overall IT workload by roughly 42% according to Microsoft, allowing them to spend less money, gain a competitive advantage and improve customer outcomes - all in one fell swoop.
Digital transformation is a lot like this example, but on a much larger scale. It's about taking a closer look at every single area of how a business operates, finding (and capitalizing on) tech-driven ways to improve performance across the board.
Why Digital Transformation Matters
It also could not be more critical to both a business' success - both currently and over the course of the next decade. Consider the fact that according to one recent survey, a full 27% of senior executives rate digital transformation as a true "matter of survival." 87% of companies think that digital transformation represents a competitive opportunity that is far too important to overlook.
But a large part of this also has to do with the possibilities that digital transformation represents. According to another study, the top three current drivers of digital transformation are:
- improved customer experiences
- increased speed of innovation
- improved time-to-market
Regardless of the type or size of business you're running or even the industry that you're operating in, it's safe to say that you most likely consider all of these essential goals as well.
Next we'll take a closer look at the rough framework that digital transformation often takes for business. We’ll also discuss the fabled "one size fits all" approach to digital transformation and the misconception of following a predefined roadmap for success.