Digital transformation is not just about technology, it’s about rethinking business for today’s world – and that of tomorrow.
Digital transformation is sweeping through the business world, and those who embrace it clearly see it as the key to their ongoing success. But what exactly is digital transformation, and why is it so important?
Noel Walsh, operations director at TEKenable, said that, when it comes down to it, digital transformation is a way of getting to grips with the world as it is, as well as getting ready for where things will go next.
“‘Innovation, optimisation and opportunity for growth’ is how we see digital transformation. The pillars are process optimisation, supporting employee engagement and supporting customer engagement,” he said.
There is no one-size-fits-all approach to digital transformation. However, while the specific steps that businesses need to take will vary depending on their industry, size and maturity, there are some common elements that are essential to any successful digital transformation project.
“The problem is, organisations don’t fully understand what digital transformation means. Is it technology, or is it making an offer to customers? It’s bigger than that; it’s a holistic thing,” he said.
The starting question, Walsh said, should be, ‘What can we improve as an organisation?’
“That could be engagement with customers or changing internal processes. Starting with a business goal, a good partner can then help you deliver,” he said.
One of the most important things to get right, Walsh said, is data. Specifically, this means getting to a position where data can drive business decisions.
“One of the things people are hearing a lot about is AI [artificial intelligence] and data. And it’s true that understanding your data is key. You can’t have siloed data, so you need to bring your data together and get a 360-degree view that offers one view of the truth.”
Leveraging data by bringing those silos together and extracting information from otherwise opaque, unstructured data not only allows businesses to build the digital processes that can lower costs and increase revenue, it also gives them a clearer picture of what is and what isn’t working in their operations.
“Business is based on data, so if you don’t have a full view of that, that’s a problem. However, if you improve the quality of your data, then you can make more strategic decisions,” Walsh said.
Though it is not the only route, cloud computing is typically viewed as central to exercising digital transformation strategies. This is because it allows businesses to work with data using modern applications, as well as be flexible and agile in their approach.
“In a transformation journey, for a lot of organisations, they might start with a technology refresh. Sometimes you just need to enhance by investing in on-premise [IT infrastructure], but there are a lot of cloud offerings in things like CRM [customer relationship management] and in ERP [enterprise resource planning].
“As a result, cloud works hand in hand with digital transformation, and modern applications [on-premise] generally do allow for integration with cloud, getting you the data you need,” he said.
However, technology should always come second to strategy, he said, as digital transformation was about enhancing business outcomes, not enhancing the technology stack.
“We do help businesses to define their strategy, but the first step is to define the goals and find out what the challenges are for an organisation,” Walsh said.
This means that organisations do need to do some homework.
“After all, they do know their business and they know their financial goals and likely know where there are issues, such as in customer service, for example. From there we can help drill down into the details,” Walsh said.
Where companies are on the journey depends more on the individual business rather than the industry or sector, Walsh said. However, larger organisations, thus far, have had the advantage.
“Basically, every large-scale customer-facing organisation is adopting a digital transformation strategy. You can see it in financial services and in retail, for example. New players very much have a digital-first approach, and we see the legacy players catching up to this,” he said.
These sectors are not alone, however, as the public service has made significant investments in recent years.
“Government is another area where you see a lot of digital transformation: trying to do more with the budgets that are available, delivering services to the public,” said Walsh. SMEs, however, may have been slow to move, fearing that serious digital transformation was something only large organisations could afford.
“Smaller enterprises may be challenged, particularly in terms of budget. They may think transformation is costly, but in reality it need not be so.”
It is also important, Walsh said, and should not be ignored. They need to be asking: “How do we continue to grow and evolve?”
The above text first appeared in Business Post on October 13th, 2023.