Digital-Business Transformation has become a "catch-all" phrase today, molded to fit many offerings, creating a huge amount of complexity around what was a relatively simple concept. Less than fifty percent of companies worldwide understand the true meaning of transformation; in fact, only a few companies are making rapid strides in the area starting a cone of distribution of companies across industries.
In a global survey of 9,000 executives and 5,000 companies across 18 industries, only 7% of companies have transitioned into a state where they define their future independent from their past. These are the digital champions across all industries. Following them closely are 39% of companies which are reinventing their value chains. The remaining, estimated at over 50%, are still in the world of websites and portals. These companies must evolve to higher levels of maturity quickly.
This race of transition from "laggards" to "middle of the pack" to "leaders" seems more like a crowd of people going somewhere without understanding where they want to go and if they are on the right path to get there. It then becomes pertinent to take a pause and check what exactly do we mean by digital-business transformation?
The four definitions of Digital Transformation
- Basic websites: A simplistic approach where transformation means the deployment of a standalone, information-oriented website for a function or department.
- Integrated websites and portals: Transformation in this approach means the integration of most or all websites related to a function or department. These integrated sites have a combination of informational content and process or transaction capabilities.
- Reinvented experiences: This model represents an approach where the focus is on providing a 'hybrid' stakeholder experience by digitalizing the chain of activities. It combines existing processes, content and engagement with new content, process and transaction capabilities. These are well-defined and continuously upgraded.
- Transforming products-services & digitalizing the value chain: An approach where the company transforms its products & services portfolio for competing in the digital era while reinventing its value chain with a business function and across the enterprise. It invests in sophisticated digital capabilities, sometimes disrupting previously successful business models to deliver a re-imagined customer value proposition that offers a holistic digital experience.
How should digital-business transformation be defined?
Since the Internet and mobility, there have been various waves of technology that have come in over the past two decades. You can categorize them into three continuous waves. The first wave—SMAC(Social, Mobile, Analytics & Cloud). As these technologies converged and became interwoven, the second wave emerged—digitalization. This pattern is foundational and will continue for the next five to seven years. During this time, companies will reach a ‘tipping point’ where a majority of models and processes are digitalized.
Transformation is not a destination - it is a continuous process with no finish lines.
There is no final phase in this journey. Business transformation is a continuous and iterative state achieved via a function of four elements
- Leadership IQ & Decision Making in the Digital Era
- Product & Service Portfolio Transformation
- Value Chain Transformation
- Organization, Talent and Cultural Transformation
Companies that get this will move rapidly.
