What exactly IS 'Digital Transformation'?

Nov 5, 2018 9:05:00 AM

digital transformationThe world of business is rife with buzzwords. Some self-proclaimed business guru comes up with a clever term for a concept that forward-thinking businesses ought to adopt, and suddenly companies large and small start dropping that term into their mission statements, business plans, and marketing materials. Examples that have fallen into and out of vogue in recent years include “synergy,” “game changer,” “thought leader,” “move the needle,” and “right-size.”

Among the latest in the long parade of business buzzwords is “digital transformation.” The origin of this term is obscure, but it has really caught on in the last year or two. “Digital transformation” efforts are now springing up like mushrooms in companies around the world, from 100-year-old international conglomerates to startups. (What, exactly, a startup could be digitally transforming from is unclear, but if all the cool kids are doing it, why not?)

As with all buzzwords, overuse of “digital transformation” threatens to squeeze the term of all useful meaning, so before it becomes a punchline on late-night TV and the butt of an endless stream of iFunny memes, let’s take a closer look at what it really means, and how AndPlus is helping clients drive their own digital transformations.

What “Digital Transformation” Really Means

As traditionally understood, the notion of “digital transformation” means taking business processes (or entire business models) and reinventing them from the ground up on a foundation of digital technology—that is, technology driven by computers, networks, and data.

As a textbook definition, that’s pretty abstract, and necessarily so, because what it means for a business model or process to be “digitally transformed” has changed over the years as new technologies have left the drawing board and presented a reasonable return for the businesses who invest in them. Fifteen years ago, for instance, “mobility” wasn’t a part of any company’s digital transformation, and now mobile is shaking up entire industries, from transportation and manufacturing to healthcare, leisure, and entertainment.

So, in the interests of putting a stake in the ground, AndPlus defines “digital transformation” as organizational change through the use of digital technologies and business models to improve performance. There are three main components of digital transformation:

  • The business objective. The objective of digital business transformation is to improve business performance.
  • A digital foundation. Digital business transformation is based on a digital foundation. Organizations are continually transforming, but to qualify as a digital business transformation, one or more digital technologies must exert a significant influence.
  • Organizational change. Digital business transformation requires organizational change—change that includes processes, people, and strategy.

In sum, digital business transformation involves much more than technology. It’s having the cultural will to look at a business and its processes with fresh eyes, to see how digital technologies can be applied to introduce new products and services, reduce costs, and increase efficiency, quality, and customer satisfaction.

AndPlus and Digital Transformation

At AndPlus, and companies like us, we focus on that second component: the digital foundation. By making a point of learning about the technical details of emerging technologies and how to apply them, we can help turn our clients’ digital transformation aspirations into real projects with concrete results.

Regular readers of this blog will be not at all surprised to learn that the transformative technologies we are most excited about are:

  • Machine learning. Training intelligent systems to recognize nuanced patterns in data will enable companies to see key business metrics that would have been missed in years past.
  • Internet of Things (IoT). Ubiquitous, inexpensive, wirelessly connected sensors, actuators, and displays will provide much more data about and control over business processes.
  • Robotics. Machines that can, to a greater or lesser degree, autonomously perform tasks that are tedious, dangerous, or error-prone for humans will free human workers for more productive, creative pursuits.

All of these technologies can be brought to bear either independently or in combination with each other to transform business processes. Many projects that leverage one or more of these will also rely heavily on big-data analytics to make sense of the vast amounts of data that businesses produce every day. And of course, all of these technologies have application aspects related to web, cloud, mobile, or some combination of the three.

Above all, the motivation for digital transformation is a recognition that many existing business models and processes—some of which have done quite well, thank you, for many decades—will soon hold companies back, if they aren’t already, and that the key to the continued success (or even the very survival) of a business depends on looking at the business in new ways. We’re here to help drive these transformations with the best that technology has to offer.

Abdul Dremali

Written by Abdul Dremali

Head of Marketing & Innovation - Abdul is currently leading research & development in Artificial Intelligence, Machine Learning and Augmented Reality at the AndPlus Innovation Lab. Abdul also is the Head of Marketing at AndPlus.

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