A Guide to Digital Transformation
Discover what it means to be a digital business and how to get there
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Updated February 2022
In this Digital Transformation Guide
This is an abridged version of our guide. For the full version, please download the PDF. It features the following sections:
Section 1 - Why a Digital Transformation?
We describe what a Digital Transformation is and what it means to your enterprise:
Defining a Digital Transformation (DX)
Every enterprise has a DX opportunity
What DX means to you
Why DX needs a Digital Ecosystem
Getting more creative with IT
Two-speed IT
Section 2 - Implementing DX
What it takes to implement a Digital Transformation:
Understanding your Digital DNA
Choosing your tools
Designing DX apps
Section 3 - Factors to consider
Adoption considerations include:
Fail to plan, plan to fail
Cutting your cloth for the long haul
Choosing the right partner
Section 1 – What is Digital Transformation?
Digital Transformation (DX) Definition
A DIGITAL TRANSFORMATION (DX) is what happens when businesses realize the potential of digital technology to bring value to their customers. The outcome of a digital transformation is a step-change in operational effectiveness and growth.
Recent research conducted by Harvard Business School suggests that companies that are digital laggards don’t perform as well as those that embrace digital transformation. They write, “Organizations that scored in the top quartile of our digital transformation index obtained much better gross margins, earnings, and net income than organizations in the bottom digital quartile. Other financial and operating indicators showed similar disparities.”
Every business has a digital opportunity
Many data-related technologies have emerged in the last decade to help businesses to compete in hyper-competitive online markets. This goody bag of new potential ways to bring more value to customers include artificial intelligence, blockchain, big data, cloud computing, the Internet of Things, 3D printing, virtual reality, and drones. Digital Transformation describes how organizations realize the potential of digital technologies to bring new value to customers. Additionally, use of digital technologies also dramatically cuts operating costs through automation, so it’s a Win: Win for company bosses.
What digital transformation means to your enterprise
Digital Transformation is game-changing, but to maximize the potential of YOUR programme, you’ll need to re-think your business model in one of four ways, Namely, to bring more value to customers by improving:
1. Accessibility to your offerings
2. The buying journey
3. Service experience
4. The quality of products and services
The total value of global retail eCommerce sales will reach 1$3.45T in 2019 and by 2040, around 95% of all purchases are expected to be via eCommerce. Small wonder that all enterprises want to trade online and move forward with a digital transformation.
Why DX needs a Digital Ecosystem
Traditional enterprise IT tooling is too slow and cumbersome to come with radical and rapid change. To leverage the potential of digital technologies, your enterprise will need to create a digital ecosystem that’s able to embrace new technologies and adapt to change affordably and expediently. Your DX ecosystem should support change by progressively orchestrating your business model.
Getting more creative with IT
DX sees Enterprise IT transitioning from a focus on back-room systems to a topic that customers, partners and suppliers can harness themselves. This shift from back-office to front-office means that enterprise IT is no longer about enforcing best practise into processes by installing Systems of Record that every other competitor also happens to use. With digital transformation, IT becomes a game-changer—but only when it’s tailored to deliver the unique characteristics of the business model that exists in the enterprise.
Two-speed IT
DX has created a demand for two‐speed IT… because coded legacy IT is slow. DevOps teams need fast, code‐less tools to implement digital transformation projects that lower skill demands and produce sustainable results.
Employees know the impact DX can have in better supporting their fulfilment of work objectives. A recent survey found that three quarters of employees said having the digital tools they need at work makes them more productive. More than half said they expected DX to make them more successful by empowering them to better manage workflow if provided with the IT tools they needed, and 42% said it speeds up boring tasks.
Need some help with your Digital Transformation? Get in touch with our consulting team today
Section 2 – Implementing your Digital Transformation
Before you can implement a digital transformation, you need to know how to bring more value to customers—so you can prioritize your efforts. You will also need to know in digital how your processes and systems work today.
Understanding your digital DNA
Most organizations lack a single-view of their critical data. There are 10 base data-sets that go to build your enterprise ‘digital DNA.’ Having the ability to reference and re-use these data-sets is essential to grow and adapt your processes—to bring them in-tune with your business model design.
The 10 bases of your enterprise digital DNA are:
1. Legal Entities
2. Locations
3. Organizational Design Structure (Org. Units)
4. People
5. Roles
6. Processes
7. Actions
8. Systems and Data
9. Stakeholders (Shareholders, Customers, and Suppliers)
10. Assets
Choosing your tools for DX
Adopting a top-down approach to orchestrating your business model will result in a single, unifying digital transformation platform that transforms your business and its ability to compete in the digital age.
While all organizations adopt a small number of business-critical applications for finance, HR and sales management, these aren’t designed to serve the processes that underpin your business model.
These are the ways of working that define your customer value advantage. They represent the unique differences in your offer compared to competitors. To automate them, you will need to create lots of applications, and then have the means to affordably adapt them over time.
Designing digital transformation apps
Any form of design activity is wasteful. Making apps is a creative process and it’s uncommon to get everything right first time.
It’s better to keep growing and learning along the way than attempting ONE BIG LEAP in an attempt to satisfy everyone. Experience has shown the best way to build apps is to start small and ‘fail-fast’ by adopting a prototyping approach.
Modern businesses are adopting FUSION TEAMS to bridge between THE BUSINESS and IT SKILLS. It means your apps can be developing in workshops using near-real-time design methods.
Section 3 – Factors to consider
Fail to plan, plan to fail
There are lots of risks to DX because it’s a major project. They include:
Weak or mis-aligned leadership
Like any agent of change, leaders may choose to dismiss the importance of digital transformation as being a ‘fad’ and instead choose to stick their heads in the sand.
Conflicting IT strategies
Enterprise IT market analyst firm Gartner predicts that companies looking to implement a digital transformation may have to adopt a two-speed approach to IT to overcome the sluggish pace of innovation experienced when working with incumbent IT teams charged with ‘keeping the lights on.’
Department leaders at War
When not approached as a top-down program, department leaders can find themselves competing to lead the DX charge or be left behind when new budgets for tech innovation surface.
An absence of ‘fast-acting IT’
Not every enterprise has invested in technology tools equipped to rapidly design, integrate, deploy and run apps for DX.
Cutting your cloth for the long haul
Both market analysts and practitioners agree, the road to become a digital leader is paved with challenges, but those that survive the next decade are likely to be the businesses that get there – eventually. For many, the money and resources needed for DX will need to be found through back-office economies, feeding innovation from savings gained through automation.
- Digital transformation is expected to grow at CAGR of 20.1 per cent from 2017 to 2025 by streamlining business processes.
- Companies with digital platforms enjoyed an annual boost in earnings before interest and taxes (EBIT) of 1.4 percent, compared with the 0.3 percent gains of non-players. The step-up effects are cumulative, with EBIT improvements adding to early-year gains, so over a five-year period, platform players may capture an additional 10 percent in EBIT growth—a company’s 2 percent EBIT growth, for example, would increase to 2.2 percent in year five.
In a digital age, business success comes from blending higher customer value—achieved through harnessing technology—with above and beyond customer experience; underpinned by processes orchestrated using the best-fit blend of people, process, data and technology.
Choosing a partner
No organization can afford to ignore the application of digital technology in their domain. It creates a game-changing opportunity to tech leaders, and an existential risk to laggards. When tackling a digital transformation, it pays to have a willing and experienced partner by your side, with a track record of project success, and knowledge of the latest tools and methods.
Find out why USTECH SOLUTIONS is the partner of choice for digital transformations by getting in touch today.
