Digital transformation is on the tips of everybody’s tongues nowadays; but what does it specifically entail? Often used as an umbrella term for any incorporation or modernization of technological tools employed as part of a company’s strategy, digital transformation goes deeper into business systems and models, fundamentally changing use along with upgrading it.
The publication The Enterprisers Project shed light on the confusion and differences between digital transformation and IT modernization in a recent article. According to their article, the 5 defining characteristics of digital transformation include digital-first culture, a design-thinking mindset, effective change management, a data-driven organization, and maintaining quality. Digital-first means applying solutions that can be beneficial at different levels from employees to customers, and seeing where similar solutions can be adapted, transformed, and applied to other areas. An example is Domino’s digital transformation – a pizza company to e-commerce company with pizza as the product – enabling customers to search, customize, order and pay, and track the order progress, and letting employees digitally check orders and ensure they are accurate and on time.
People-centric approaches enable flexibility in design thinking; a brand should listen to concerns such as needs and challenges of employees and users at every stage, to better decide on digital solutions that will be effective. Trialing and testing in steps is also an important part of this transformation process. Risk and disruption is natural during change of any kind, especially involving digital and automation, should be strategic and gradual, addressing any concerns and reservations. Getting correct insights and leveraging the data to apply the correct analytics and tools is an important aspect of making sure that the quality is maintained throughout the whole transformation process.
To summarize, whereas modernization can upgrade or better business strategies, digital transformation can outright change business models or open new avenues for income or customers.