Understanding Digital Transformation

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Digital transformation is commonly used and heard today but not necessarily understood. First, let’s define transformation.

Transformation is a total scale change to a business’ foundational components, from its operating model all the way to its infrastructure – what, how and to whom they sell. A transformation programme affects each function of a business, from purchasing to technology to sales and marketing.

Businesses usually build and develop new offerings, enter new markets, merge with competing business or sell to them, or trade components from their value chain to gain a competitive edge, but it doesn’t mean all of such things are transformative.

Digital transformation framework, which is expensive and high-risk, is not a choice that a business makes. They transform after failing to evolve.

An evolving business – products and proposition continually updated, flow of new customers consistent and value of current ones increasing –  has no need to transform.

A business can experience dramatic changes and major restructures, but it is only considered a digital transformation when these changes are very noticeable from the outside and were spurred by external causes.

Main Drivers of Transformation

Transformation has three key drivers: evolving consumer demand, evolving technology and evolving competition. Of course, these factors form an ecosystem, and changes in a market happen when they converge.

When any of them happen together and make a business’ operating model no longer effective, the business is now at a tipping point. Here’s what- evolving businesses have no tipping points because problems are spotted ended before they have a chance to grow.

Evolving businesses always focus on their customers’ changing needs and adapt accordingly. Businesses that detect tipping points too late must transform. Now let’s define digital.

In the most general sense, it is technology connecting people and machines together through information. Thus, “digital transformation” is an observable wholesale restructure meant to avoid a tipping point that may be caused by digital technologies and downstream effects on the market.

Different Organizations and their Roles in Digital Transformation

Global consultancies typically handle transformation programmes for large businesses. The transformation of a large organization requires a substantial amount of resources, time and versatile business abilities that are often found only in global consultancies.

On the other hand, creative agencies help businesses avoid scenarios that make digital transformation necessary. Their specialties include understanding new markets and technologies, linking businesses to consumers and predicting market movements.

They work hand in hand with their clients to do all of these. Prototypes of new products and services are created, as well as trial products and experiences that allow them to paint clearer image of the future.

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