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What is Digital Transformation

What is digital transformation

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Digital transformation is a data-driven organizational change to create sustainable competitive advantage.

Digital transformation activities can comprise the effort to digitize information and digitalize processes, but it really is much more than these.

Above many things, it definitely involves building a culture of innovation, open communications and a data-believing strategic management. Without these soft elements, an organization that is blindly driving technological improvements will not be sustainable in the long run. On the contrary, it will only be successful in wearing its people out.

At the very basic level, digital transformation will involve digitizing and digitalizing most aspects of the business first.

Examples of digitizing information:

  • Building a website that contains information on your products and services in digital format.
  • Using excel file to store customers and products information.

It definitely makes business sense to try to digitize every information that a company finds useful, especially for future use. This is important for knowledge retention and sharing convenience. With very affordable cloud storage, there is no reason to not digitize information.

Examples of digitalizing processes:

  • Add to cart function on an E-Commerce website for purchase process.
  • Using inventory softwares to keep track of inventory and update inventory on storefront.
  • Communicating with customers via Live Chat function.
  • Using accounting softwares for invoicing.

Digitalizing processes helps save time and money for businesses. Today, we are simply spoilt for choice. There are countless softwares available in the market for us to choose from, mostly working on a “Pay as you Use” pricing structure. Businesses may choose the ones that work better for them instead of creating new softwares from scratch.

The very preliminary part of the digital transformation journey will definitely entail some digitizing and digitalizing work. However, all these work have to come together strategically as part of a business’ digital transformation effort. They can’t be done as standalone projects for each department. As best as possible, the management must work with each and every department to ensure that the organisation is digitizing and digitalizing meaningfully, serving the needs of every department in each and every project.

A very simple example of digital transformation work:

  • Analyzing data derived from an E-commerce store, and realising that many customers like to buy blue dress with black heels. Decides to produce a whole new range of blue dresses and black heels to remarket to the same audience for Christmas.

In this example, it first requires the decision maker(s) of this business to want to use data as a reference point for business decisions. The way he derives his data would be from his E-Commerce store (which was built with tracking from the IT / Marketing department. It also means that such data will affect other aspects of the business (the production line), and there is also an action that pushes for more profits out of these data (re-marketing efforts), from the Marketing folks.

From this example, we understand that digital transformation (even a very simple one as above) cannot happen without an intentional tracking plan built into the website – Google Analytics Tracking Code with Conversion goals in place. Digital transformation also cannot happen if the production department is uncooperative and would not respond to the data produced by the IT / Marketing department. It definitely cannot happen if the marketing department has not planned for re-marketing in the first place.

In this very simple example, we understand that digital transformation is much more than digitizing information and digitalizing processes. It requires, more than anything, a data-driven strategy at the management level.

Is Digital Transformation an Organization Development work? Maybe. This is why we recommend running workshops / talks so that each department understands the importance of thinking for each other within the organization. When departments work closer with each other, the organization definitely benefits as a whole. The technology is here, but are the people ready?

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