March 2, 2024

Digital transformation and the way forward

digital transformation

In recent years, the rapid development of digital technologies has enabled organizations across different industries to compete and create value in many ways.

Organizations across numerous industries experience these transformative impacts of digital technologies on their external environment, such as the competitive dynamics and the expectations of their customers.

It can influence and impact their internal environment ranging from business models as well as the service and product offerings to organizational structures.

In the current age of continuously adaptive technologies, organizations move towards digital transformation as a survival raft against unpredicted market changes and externalities.

According to Mckinsey, most digital plans fail to account for how digital transformation changes economic foundations, industry dynamics, and what it means to compete; most digital transformation endeavors fail during the incumbent of their business model to be digitally transformed.

Senior executives and management approach new opportunities and risks from different digital technologies. Their goal, in the long run, is to increase the organization’s value creation.

Increases value creation

Generally, digital transformation is about adopting new and modern technologies to increase productivity, value creation, and social welfare. Digital transformation combines strategy and smart technologies to enable organizations to remain competitive in this rapidly changing marketplace nowadays.

Several companies that have undergone digital transformation are likely to have a better chance of performing better amidst any situation or crisis e.g., the corona pandemic and be more capable of maintaining some degree of operation and revenue stream for their businesses.

Related:   Can de-dollarization trigger global financial reset?

These digital technologies help create more transparency in regard to internal and external frameworks in any organization. This implies that organizations should have a proper design for adapting rapid changes i.e., a seamless framework that learns and responds to the constantly changing customer domain.

Seamless integration

Digital transformation is almost integrated into every industry, business strategy, and function regardless of any age or scale. It is still difficult to find a holistic definition for the digital transformation strategy. The classic view is that the digital transformation strategy drives the organizations to look ahead to achieve its digital transformation vision.

A robust digital transformation strategy should rely on a structured IT framework to drive the digital transformation and strategic business planning to pull the digital transformation from the mere IT incumbent to the strategic business objectives. Many scholars argue that IT digital strategy should work in fusion with the business strategy, not just a functional level strategy.

Digital transformation necessitates not just fundamental changes in corporate strategy, but also changes in corporate culture. There are five domains that digital transformation may impact: customers, competition, data, innovation, and value.

The research has been predominantly stimulated by the need for convergence in a range of interdisciplinary technologies. Three stages of digital transformation were identified: digitization, digitalization, and digital transformation. Digital transformation is a successful business model globally.

Amazon, Uber, Netflix, and Alibaba are good examples of successful digital transformation business models. Digital transformation is not limited to a complete business model, but it can be scaled according to the business need. D

Related:   Richman fixed on healthcare's horizon

igital transformation comprises unique perspectives: technological based on social media, mobile, analytics, or embedded devices, organizational in which requires a shift in organizational processes or new business models, social through impacting every aspect of human life.

It is ultimately about how to balance transformational dimensions when implementing digital transformation. These transformational dimensions vary from financial perspective, technologies advancement, value creation, to the organization’s structural changes.

Way forward

The main concern in the digital transformation is defining a vision and roadmap that determine the way forward. The success and effectiveness of the current enhanced process depend on how well organizations address the environment. There are three areas in organization that are impacted when implementing digital transformation.

These three areas are customer experience, operational processes, and business models. Digital transformation allows organizations to solve all the traditional issues by using digital solutions, increase the innovation, and the creativity to make the overall performance more effective and appropriate. The process is basically remodeling all the business activities to improve productivity.

Digital transformation is the integration of digital technology into all areas of business, fundamentally changing how organizations operate and deliver value to customers. It can be seen as an accelerating transformation concerning models, processes, competencies, and business activities to gain competitive advantages.

A maturity model is a tool that helps people assess the current effectiveness of a person or group. Industry 4.0 maturity models aid with assessing the industry maturity or readiness towards obtaining the fourth industrial revolution standards and features. The recent industry 4.0 maturity models mostly consider multinational enterprises (MNEs), while the small and medium sized enterprises (SMEs) don’t receive equal attention.

Related:   Investors shy away from B2C

A suggested four step implementation strategy can be followed, including; maturity assessment, influence assessment, roadmap construction, and implementations. Maturity assessment is the first and most important step in the implementation strategy. During maturity assessment, the organization’s current maturity level is measured.

Organizations must pick a maturity model that would be utilized in the implementation strategy, in which consideration will allow the majority of organizations maturity levels to participate in the assessment and eventually the implementation process as well. The influence assessment’s main objective is to establish the influence of each dimension on the organizations.

The road map is a plan intended to achieve a particular goal while a strategy is considered a plan of action or policy designed to achieve a major or overall aim. Implementation is the fourth and last step, at this stage, the criteria of the listed dimensions in the roadmap will be listed. Digital transformation is a holistic concept and changes the organization’s strategy and operations thoroughly. Digital transformation brings new strategic decisions for managers, digitalizes value creation and capture, changes governance mechanisms, and renews competencies and culture.

Areas of improvement

It is important to understand the current state of digital transformation and areas of improvement to choose the most suitable actions to advance the organization’s digital transformation. It is not recommended to invest in new initiatives without having a holistic understanding of the situation and possible areas for improvement. Digital transformation understood as radical institutional change, creates an atmosphere wherein organizations are expected to become digitized.

Related Post