Digital transformation refers to the profound transformation of business and organizational activities, processes, competencies, and models to fully leverage any changes and opportunities of a variety of digital technologies along with their accelerating impact across society in a strategic and prioritized way, with present and potentially future shifts in mind. It is essentially the integration of digital technology in all areas of your business which fundamentally changes how you operate and deliver value to your customers. No matter the size of your business, digital transformation is imperative to your success.
Now, a digital transformation will look different for every company. However, in general terms, it is the cultural change that requires businesses to challenge the status quo, experiment, and get comfortable with failure. This can mean stepping away from the long-standing processes that you have been used to and implement new strategies that are still a work in progress. Author Greg Verdino says, “digital transformation closes the gap between what digital customers already expect and what analog businesses actually deliver.”
There are many reasons why a business may undergo a digital transformation. Survival, however, is the most likely reason for many. According to Howard King, “businesses don’t transform by choice because it is expensive and risky. Businesses go through transformation when they have failed to evolve.” So, many times businesses go through this change in a last attempt to survive after having failed to evolve previously. Companies that are looking to succeed need to understand how to integrate technology into their strategy. The recent IDC research called “FutureScape: Worldwide Digital Transformation 2018” reported that digital transformation spending would reach $1.7 trillion worldwide by the end of 2019. This would be a 42% increase from 2017.
This shift will not be simple. In IDC’s predictions for CIOs in 2018, they report the following: “Through 2019, dragged down by conflicting digital transformation imperatives, ineffective technology innovation, cloud infrastructure transition, and underfunded end-of-life core systems, 75% of CIOs and their enterprises will fail to meet all their digital objectives.” So, these CIOs are worried about the survival of themselves and their company. For this reason, it is critical that they shift their focus to securing company-wide support and collaboration if they want to get digital transformation right the first time because they may only get one shot.
Even if a business leader does not believe they need to transform, many reasons suggest otherwise. For example, their competitors are probably doing it. In fact, according to a Forrester Research report, executives are predicting that almost half of their revenue will be driven by digital by 2020.