What digital transformation actually means for an organization
Digital transformation is one of the tech's top buzzwords; however, the concept now proliferates through all industries. With the enterprise on the brink of the Fourth Industrial Revolution, organizations are making huge investments in digital advancements.
Four out of five IT professionals consider digital transformation a necessity for the survival of a business, according to a recent Masergy report. Companies are turning to digital transformation efforts to enhance the customer experience, remain competitive in their industry, and boost productivity and efficiency, the report found.
SEE: Special report: Digital transformation: A CXO's guide (free PDF) (TechRepublic)
"Digital transformation standardizes platforms to allow for easy, real-time access to data to assist in driving the business by improving efficiencies and enhancing customer experiences," said Pam Feeney, sales operations manager at Keystone Partners.
These initiatives focus on incorporating data, data science, and software solutions into business operations, said Maria Colacurcio, CEO of Syndio.
The Masergy report outlined this year's top investments in digital transformation for companies. These areas include cloud migration for IT, improves security, data analytics, and software defined networks.
However, actions like moving to the cloud aren't what defines digital transformation, said Brendan Caulfield, cofounder at ServerCentral Turing Group. In reality, "these overused terms and buzzwords" label digital transformation efforts as simply the most current tech fads in the enterprise, rather than evolving projects, he added.
What digital transformation means for companies
Unfortunately, the answer isn't cut and dry, Caulfield said. There isn't a blanket statement definition of the term, like most people think. "It's going to be highly individualized company by company," he said.
"There's a whole lot of consistency," Caulfield added. "There's some companies that jump all in, and it's going to be a massive change, and there's some companies that think digital transformation is akin to moving from on-premise email to Office 365. Both are legitimate digital transformation examples, but obviously on a tremendously different scale."
While the term "digital transformation" has exploded in recent years, the concept has been around for decades, and its definition also changes with the ebbs and flows of industry, Caulfield said.
"When we're talking about it today we're generally talking about cloud and how cloud is going to disrupt the way that IT departments function and operate," Caulfield said. "But it really to me, it's just the next logical step, and it's going to be very different company to company."
How to define digital transformation for your company
A company's digital transformation efforts are defined by success factors and outcomes.
"The key to understanding success of any transformation project is establishing clear goals and expectations," said Feeney. "That way, you know the efforts are paying off, if the efficiency/productivity improvement goals for the transformation are met."
Some organizations may be trying to save money, while others might be wanting to increase their pace of innovation. Those are two different outcomes, which means the companies will have to use two different strategies through digital transformation, Caulfield said.
"People are skipping this step all the time, and we end up having to help companies out there unravel the mess that they've made," Caulfield added. "The most valid and important part of any process is the strategy part. And getting that right is going to dictate the overall success of any digital transformation."
To develop a solid strategy, organizations must consult their entire community, especially stakeholders, according to Caulfield. The whole company must be on the same page to determine what a strategic outcome will look like.
"Spend time at the beginning determining what a successful transformation looks like, and what your goals are in accomplishing it," Caulfield said.
A key part of digital transformation initiatives is that they never end. "With the rate at which technology changes, there will always be a next generation project on the horizon," Colacurcio said.
For more advice on how to succeed at digital transformation, check out this TechRepublic article.