Digital Transformation Demystified !!

Quixy Editorial Team

November 7, 2024

Digital transformation in businesses has now become imperative. In a recent survey, 87% of participating business leaders said they feel at risk if they fail to innovate digitally. The same message comes across from every conference, keynote, panel discussion, article, analyst report, or study on how businesses can remain competitive and relevant as the world becomes increasingly digital.

While so much is being said and discussed about Digital Transformation, it is not always clearly defined or understood. In this article, I try to put together an easy-to-understand summary through excerpts of two exceptional articles from Mike Bainbridge: Evolve or Die and Jim Miller: What is Digital Transformation and Why Should You Care, respectively.

What is Digital Transformation?

Digital transformation can be defined as the transformation of business activities, processes, competencies, and business models to fully leverage the changes and opportunities of digital technologies and their impact in a strategic and prioritized way.

Why is Digital Transformation so important?

Quite simply, if your organization is not modernizing, you’ll be left behind, and the threat of disruption becomes very real. If you aren’t a company that started in the last ten years, then chances are you are using legacy software and out-of-date IT infrastructure. While this is not a problem, your competitors are now lean and efficient, make much better use of their capital, and delight their customers by engaging with them across multiple channels.

Take the humble taxi driver, for example. In the past, learning the streets was vital to navigation, but for today’s Uber and minicab drivers, many GPS-enabled smartphone apps find the best route. Not only that, the community and social features even provide up-to-the-minute alerts of jams and incidents. Using technology to deliver a small advantage is fine, but when you do it across every business process, the efficiency gains really start to add up.

It seems that disruptive start-ups are everywhere across every sector, and it is true. Just look at the winners for confirmation, the unicorns. The business unicorn is a privately-owned company that reaches a $1 billion valuation. So-called originally for their rarity. Before the emergence of cloud computing, on average, four were born each year.

In the last five years, over 200 have reached the milestone. Even more significantly, in the past, it would take 20 years for a company to reach this valuation. Today from start-up to unicorn takes a median of just six years. To combat this threat, incumbent or established organizations should follow their lead and learn from these new stars.

The big problem is that change brings uncertainty, which can be terrifying for a large organization. Not only does redefining business models mean high risk, but the time and effort to implement them are also significant. For senior executives, the time has come to start taking chances because doing nothing is no longer an option. From a position of dominance to complete irrelevance can come in the blink of an eye. The lessons of Blockbuster and Kodak are all too apparent for anyone who thinks a majority customer share will keep them safe.

Also read: 20 reasons why going paperless and shifting to digital forms will be a major trend in the near future

How did we get to the Digital Transformation Phase?

Let’s get a basic understanding of digitization:

Digitization is translating, representing, and presenting every sound, image, video, document, transaction, and measurement into a machine-readable (digital) and actionable format.

What were the catalysts for Digitization? What brought about this digital revelation? Steve Case talked about three phases of the Internet:

Internet 1.0 was the physical infrastructure — the wiring and plumbing of the Internet, so to speak. This phase was great for companies like Cisco, Dell, and HP (basically anyone that was selling physical infrastructure and networking).

Next came Internet 2.0 — distinct businesses built on the Internet’s foundations: Perfect examples are Facebook, Google, Amazon, and Expedia — the Internet-enabled new business models.

The current phase that we live in is Internet 3.0 — the ubiquitous phase of the Internet — where the Internet is now enabling (and I would go so far as to say requiring) ALL companies to create new businesses and shareholder value by augmenting their current business models with digitization.

Also Read: 80+ Digital Transformation Statistics and Trends

What is enabling this Digital Transformation?

Massive amounts of (cheap) compute cycles: Annually, the combined spend of Google, Amazon, and Microsoft on cloud infrastructure approaches $30B. When you include other companies like Facebook, Oracle, and Salesforce (to name a few), the immense amount of new computing power provided to the world just annually is mind-boggling. And for the most part, free, except for a few advertisements thrown your way. This does not even include the massive amount of computing power that resides in your hand or your pocket (e.g., your cell phone or tablet).

Massive amounts of (cheap) storage: Along with massive amounts of cheap computing power, staggering amounts of “almost-free” hard disk drive space are also being deployed in these global server farms and data centers. And it’s likely storing every Youtube video, email, Instagram post, and Facebook post (you get the picture) that you’ve made — all ready to be analyzed with this massive amount of computing power.

The mass proliferation of Internet-connected devices (The Internet of Things — IoT): In the past few years, we’ve seen a virtual exposition in IoT (the Internet of Things). Here are my two cents on IoT: (1) If it can have a microprocessor embedded in it, it will. (2) If it has a microprocessor, it will be connected to the Internet, and (3) if it’s connected to the Internet, it’s going to collect and stream (lots of) data. Net-net, assume everything will be connected to the Internet!

GPS, Localization, and Hyper-localization — Apart from sounding a little Orwellian, your phone, tablet, and laptop geo-tags everything (including you) down to within a few meters of accuracy. With the explosion of IoT devices, we’re essentially wiring up the entire planet (and everything on it). My favorite examples are Amazon’s visibility into its supply chain (including your deliveries) and what Waze has enabled with traffic and route optimization by co-opting your mobile phone (your mobile phone is the IoT device for your car).

Also Read: Digital Transformation: Objectives, Contributing factors & the Road map ahead

The ubiquity of computing and connectivity: With the rise of omnipresent high bandwidth mobile networks, intelligent edge devices, massive cloud networks, and emerging satellite data networks, data can be ingested from almost every corner of the planet — transforming the entire planet into a living organism of data.

Machine Intelligence and Deep Learning: With all this data being created in structured (tagged) and unstructured formats, Machine Intelligence and Deep Learning have come to the rescue. Machine intelligence enables meaningful data and, in some cases, knowledge to be extracted from all of this data. Just Google “Pink Ferraris” and look at the images retrieved. A machine intelligence algorithm sorted all of those pink Ferraris — likely with zero human interaction. Consider all of the possibilities!

Machine Autonomy: Machine-to-Machine Interactions (Taking People out of the Loop): Let’s face it, for most of our businesses today, people are the weakest link in our business processes. Humans are lousy at repetitive tasks — even more so after a poor night’s sleep or the day after the Super Bowl. We’re just starting to see the rise of bots and other machine-to-machine processes, but as more people are taken out of the loop, our businesses have the capability to run nearly at the speed of light (a perfect example being high-speed, automated stock and currency trading).

What does Digital Transformation consist of?

It is widely recognized that there are four pillars of change to focus on, two of them visible and two less obvious. The first is the customer experience. Delivering that “wow moment” or a seamless interaction that Amazon and Apple both put above everything else. It is easy to say you put the customer first, but much harder to deliver.

Take Virgin Media, for example; they are in an intensely competitive market in which it is hard to delight. They have put NPS (net promoter score) at the top of all their scoreboards to ensure that every employee knows the customer comes first. Customer-first has become something of a cliché, but it is now more important than ever. With even more choices and an easy way to compare (Google or smartphone), never before has the consumer had such power.

Product digitization is the second visible pillar of change, using technology to enhance your offer or service. Nike does this well with its connected shoes. Allowing runners to measure (via smartphone or watch), share (using social media), and track improvements (on the cloud platform) when competing or working out. Their product has become a sports or exercise experience, and their popularity proves it works.

The less-visible pillars of transformation are much harder to spot but are equally important.

Also Read: How Quixy Can Help You with Digital Transformation?

Employee engagement is not just about improved collaboration or messaging tools; it involves a more fulfilling experience for arguably your most important customers, the staff. Cultural change dictates remote working, and time off to do community projects is high on the want list. Work is no longer a 9 to 5 pursuit; in the connected world, we are always available to reply to urgent emails, and as such, your employees expect more for their loyalty and time.

Process optimization and digitization complete the pillars of transformation, and it is the one that requires the most invasive changes. Over time problems are solved in an ad-hoc manner, and these solutions need to be updated, documented and improved. How many people need to sign off on an order? How much duplication is there to agree on new branding templates?

Start by getting teams to map out a typical day, and you’ll quickly start to uncover inefficiency and duplication. Once you have isolated and defined your processes, these need to be digitized to bring in efficiency while cutting associated time and cost. Every industry today, e.g. construction, solar, etc., is looking at digitally transforming their processes.

Also read: Top 10 Business Process Automation Benefits

Underpinning the whole thing is, of course, IT. Using the latest tools and making the best use of data means that this must evolve significantly too. The modern IT department is the facilitator of change. Advising other business units on how to be more efficient and solve critical problems. They are the grease that makes the wheels turn into a mature business. Providing governance, a model for rapid cloud adoption, and data visualization are key to becoming a digital powerhouse.

Examples of Digital Transformation

Here are some prominent examples of digital transformation across various industries:

Retail:

• Amazon: Revolutionized the retail industry by leveraging data and automation to provide personalized recommendations, efficient logistics, and seamless customer experiences.  
• Walmart: Implemented advanced analytics and AI to optimize inventory management, improve supply chain efficiency, and offer personalized shopping experiences.  

Finance:

• Fintech Companies: Disrupted traditional banking with innovative digital solutions like mobile banking, peer-to-peer payments, and robo-advisors.  
• Banks: Adopted digital technologies to streamline processes, enhance customer experiences, and offer personalized financial services.  

Healthcare:

• Telehealth: Enabled remote consultations and patient monitoring, improving accessibility and convenience.  
• Wearable Devices: Collected real-time health data to empower individuals and healthcare providers for preventive care and personalized treatments.  

Also Read : eMudhra Signer Gateway in Quixy: For Secure & Effortless Digital Signatures.

Manufacturing:

• Smart Factories: Utilized IoT and automation to optimize production processes, reduce costs, and improve product quality.  
• 3D Printing: Revolutionized manufacturing by enabling rapid prototyping and customized production.  

Transportation:

• Autonomous Vehicles: Transformed transportation with self-driving cars and trucks, promising increased safety and efficiency.
• Ride-Sharing Apps: Disrupted traditional transportation models by connecting passengers and drivers through digital platforms.  

Education:

• Online Learning Platforms: Provided flexible and accessible education opportunities to learners worldwide.  
• Virtual and Augmented Reality: Enhanced learning experiences through immersive simulations and interactive content.  

Other Notable Examples:

• Netflix: Transformed the entertainment industry by shifting from physical media to streaming services.  
• Airbnb: Disrupted the hospitality industry by connecting travelers with unique accommodations.  
• Uber: Revolutionized the transportation industry by offering on-demand ride-hailing services.  

These examples demonstrate how digital transformation can reshape industries, create new business models, and improve the lives of individuals. By embracing digital technologies and adopting innovative approaches, organizations can thrive in the digital age.

A Blueprint for Digital Success: Understanding Digital Transformation Frameworks

Digital transformation frameworks are the roadmaps that guide organizations through their digital journeys. They provide a structured approach to identify opportunities, allocate resources, and measure progress. A typical framework includes the following key components:

• Strategy: Defining clear goals and objectives that align with the organization’s overall business strategy.
• People: Building a skilled workforce and fostering a culture of innovation and adaptability.
• Process: Re-engineering processes to leverage digital technologies and improve efficiency.
• Technology: Selecting and implementing the right technologies to support the transformation.
• Data: Collecting, analyzing, and utilizing data to drive informed decision-making.

What role does culture play in digital transformation?

Culture is the bedrock of successful digital transformation. A culture that embraces change, innovation, and collaboration is essential for driving digital initiatives. Key cultural factors to consider include:

• Leadership: Strong leadership that champions digital transformation and sets the tone for the organization.
• Employee Empowerment: Empowering employees to take ownership of digital initiatives and experiment with new ideas.
• Risk Tolerance: Fostering a culture that embraces risk-taking and learning from failures.
• Continuous Learning: Encouraging ongoing learning and development to keep up with the rapidly evolving digital landscape.

Quantifying the Impact: Measuring ROI on Digital Transformation

Measuring the return on investment (ROI) of digital transformation is crucial to justify the costs and demonstrate the value to stakeholders. Key metrics to consider include:

• Financial Metrics: Increased revenue, reduced costs, improved profitability.
• Operational Metrics: Increased efficiency, reduced cycle times, improved customer satisfaction.
• Customer Metrics: Increased customer acquisition, improved customer retention, enhanced customer experience.

How can I get started on digital transformation?

Getting started on digital transformation can seem daunting, but with a clear plan and a focus on key areas, you can successfully embark on this journey. Here are some tips to get you started:

• Assess Your Current State: Evaluate your organization’s current digital maturity and identify areas for improvement.
• Define Your Goals: Set clear and measurable goals for your digital transformation initiative.
• Build a Strong Team: Assemble a team of skilled professionals who can drive the transformation.
• Prioritize Initiatives: Focus on high-impact projects that will deliver the greatest value.
• Start Small and Scale: Begin with a pilot project to test the waters and gain momentum.
• Measure and Iterate: Continuously monitor progress and make adjustments as needed.

By following these guidelines and leveraging the insights from the previous sections, you can successfully navigate the complexities of digital transformation and achieve lasting results.

Digital transformation and No-Code platforms

No-code development platforms are game-changers when it comes to digital transformation for businesses. They give non-technical users the power to build applications, automate processes, and spark innovation without needing to be coding wizards.

No-code platforms simplify and speed up development, allowing organizations to create customized solutions that perfectly fit their needs. No-code fosters a culture of collaboration and creativity by involving business users in the development and deployment process. It also tackles challenges like limited technical resources and the time and expense of traditional software development. With no code, businesses can fully embrace digital transformation, adapt swiftly to market changes, and operate with remarkable agility and efficiency.

Ready to transform your business? Get started now and experience the power of automation and app creation, all without the need for coding skills. 

Also Read: Most Mind-Blowing Examples of Digital Transformation

Conclusion

Digital Transformation is imperative. It’s a continuous process of integrating the latest digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. No one solution can magically digitally transform your entire business.

As discussed in the article, various areas can be explored based on the needs, be it for enhancing the customer experience or automating the business processes to drive transparency and efficiency while cutting down time and cost.

For many leaders, the first steps are the hardest, but once you’ve got your head around the factory-like conveyor belt of continuous improvement, things start to make more sense.