What is Digital Transformation concept?

Lina Network

August 8, 2020

According to the research of leading survey company Gartner, Digital Transformation is becoming a strategy at businesses and organizations in the fourth industrial revolution. 91% of firms surveyed are engaged in some form of digital initiative. Eighty-seven percent of senior business leaders say digitalization is a company priority, yet only 40% of organizations have brought digital initiatives to scale.

What is Digital Transformation?

According to Microsoft, Digital Transformation is rethinking the way organizations gather people, data, and processes to create new values.

In general, 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. 

The different of Digitization, Digitalization and Digital Transfromation

The different of Digitization, Digitalization and Digital Transfromation
The different of Digitization, Digitalization and Digital Transfromation

Digitization is the process of changing from analog to digital form.

We can make the example by an accounting staff enter the data on the invoice to excel file and save to his computer.

Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.

If in the above example, inputting data into the computer is Digitization, then uploading that data to the company’s general storage system and creating access right for employees / leaders to view that data is called Digitalization.

In general, the definition of the Digitalization is quite similar to the Digital Transformation. The similarity here is the aspect of applying technology to improve business operations. The technologies applied can range from simply uploading files to a company’s internal site to complexities like Internet of Things (IoT), Machine learning, Blockchain or Big Data analysis, v.v.

What is Big Data

However, what makes the difference in Digitalization and Digital Transformation is the human aspect. Digital Transformation requires a much broader adoption of digital technology and cultural change. Digital Transformation is more about people than it is about digital technology. It requires organizational changes that are customer-centric, backed by leadership, driven by radical challenges to corporate culture, and the leveraging of technologies that empower and enable employees.

“Every digital transformation is going to begin and end with the customer, and I can see that in the minds of every CEO I talk to.” Marc Benioff, Salesforce Chairman and CEO

What should businesses prepare for Digital Transformation?

To begin the Digital Transformation process for the business, management first needs to understand this concept, and change its mind to accommodate the comprehensive changes that are imminent.

  • First of all, the workflow itself and the entire workforce from the leadership to the staff must be “reformed” to become more flexible, more technologically proficient. According to McKinsey, 4 out of 5 qualities of successful Digital Transformation businesses lie in human factors: leadership advocacy, capacity building, employee motivation, business communication and ultimately technology level.
  • Second, Digital Transformation is an endeavor that needs to be planned in detail and takes a lot of time (3-5 years). Unlike Digitalization, Digital Transformation cannot be done in a single project. Therefore, it can be said that a digital transformation roadmap will include many Digitalization projects. In addition, the sustainability of Digital Transformation is reflected in many other factors such as the integration of technologies together and the fulfillment of customer needs and expectations. 

If you consider Digitization and Digitalization as the first and second step then Digital Transformation will be the third step in the business breakthrough in the 4.0 economy.

Digital Transformation in enterprise is important

Although digital transformation is considered a “necessary and sufficient” process for businesses entering the 4.0 century, but this is not an easy process, not just like applying new technologies as many people think. However, the reality is that few businesses have undergone successful digital transformations.

Kane et al.’s (2017) global study found that only 25% of organizations had transformed into digital businesses, 41% were on transformative journeys, and 34% invested more time talking about the trend than they did acting on it. What is noteworthy is that 85% of executives stated that attaining digital maturity is critical to organizational success. The discrepancy between recognizing digital as a competitive necessity and successfully implementing a transformative strategy suggests that many leaders are unsure how to harness the opportunities that digital brings to people, processes, and technology.

Discovering more Digital Transfromation benefits and concept with Lina Network blog.

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