What Is Digital Transformation?

As most of the customers have gone online, the impact of globalization and the continuous innovation of competitors, brands that have not yet thought about how to integrate digital technology to improve the efficiency of operating processes, increase customer experience, and think about market positioning will completely lose the market competitiveness.

What Does Digital Transformation Mean?

Digital transformation is defined as the introduction of digital technology and artificial intelligence into the organization, fundamentally transforming the operation process and business, and providing customers with higher value, and satisfying the ever-changing market. This kind of change will make organizations need to constantly challenge the status quo and rethink how to use technology, people, and processes to create new operating models and sources of income.

Why digitally transformed?

Companies may have to undergo a digital transformation for many reasons, but so far, the most likely reason is that they have to do it because it is a matter of survival. Although many aspects of the world are at an unclear stage, the impact of the new crown pneumonia on the digital transformation is obvious. Due to the sudden change in our lives, many companies and organizations make corresponding changes to remain competitive and adapt to the changing market.

What Is Digital Transformation?

Digital transformation is a process of combining digital technology with existing business models. From business processes, value propositions, customer experience, digital culture, to a complete transformation, it becomes an extremely sensitive one, centered on customer value and experience, and is constantly updated and continuous. Transformed corporate organization.

The focus and sequence of each industry are not the same. In industries that rarely interact with customers, organizations may first transform the level of operational processes, and simplify organizational management and department-to-department business by combining digital technology. New technologies make engineering processes more efficient, etc. In other industries, such as finance, tourism, media, etc., organizations may focus on value propositions and discuss the products and services provided at a fundamental level.

More mature organizations in the digital field have not only transformed their operational processes and value propositions to become extremely sensitive and customer experience-centric companies, but also established a whole digital ecosystem, and have developed an entire digital ecosystem from capabilities, culture, and Drive transformation across the entire ecosystem and become a transformational organization that constantly challenges, tests, and is extremely agile.

Explore the products and services currently provided at a fundamental level, and redefine the value proposition. Digital reengineering is one of the stages of transformation. In this stage, organizations must thoroughly examine and understand the customer journey, define the ring nodes that need to be optimized or added, and then establish clear strategies for the most effective execution.

In promoting the development of the entire digital transformation, we suggest that companies can embody the core values of the four digital transformations to more effectively evaluate the future development and investment direction in the transformation. They are the overall operational efficiency of the company, customer focus Degree, supply chain resilience, and new business development.

• High productivity operation: Rethink the existing operating process, and gradually promote high-productivity operations by reducing costs, providing efficiency, and other indicators.
• Customer Center Enterprise: With customer experience and value as the core driving elements, deploy the strategic development of each business function of the enterprise.
• High resilience supply chain: Strengthen the company's ability to respond to changes and crises, improve its agility, and ability to recover from the impact of events.
• Imagine and reimagine: Based on consumers, markets, technology, and various other factors imagine how companies can promote new businesses, new products, new services, and new business models, and reimagine and reshape new service models to support the company’s foothold in the changing market.

When an organization develops digital transformation, five aspects must be taken into account at the same time to maximize the probability of success and the impact it creates. They are organization and culture, talents and capabilities, data ecosystem management, technology and tools, and Strategy planning and execution.

1. Organization and Culture:
   In the process of introducing technology and driving digital capabilities, we often encounter departmental integration, large-scale education and training, re-skilling of the entire department, and sometimes even changes in the overall operating model of the organization. Under such changes, companies often neglect to take care of the development of the cultural level, causing the overall digital project to fail. Most companies consider organizational culture to be the biggest limiting factor in advancing the digital transformation of the organization. According to the elements of corporate culture, the main factors can be horizontal and vertical frictionless communication, cross-departmental resource sharing and cooperation, the spirit of experimentation and testing, and finally, user- or customer-centric design thinking.
2. Talent and Capability:
   When advancing the process of digital transformation, organizational capabilities are often not directly proportional to the direction you are heading, and this situation directly leads to the failure of the entire digital project to create the expected benefits.
   Hard power: refers to those strengths that can be tested, such as language, technology, and the ability to use certain tools. In this world of global competition, frequent technological advancements, and new technologies constantly emerging, the cultivation of hard power is of vital importance to organizations. This is especially true in data analysis. Whether it is data processing, governance, big data analysis, or the ability to link data analysis and business applications, the lack of data talents and capabilities has seriously affected the digital transformation process of many companies. In this modern era of continuous technological advancement, it is no longer practical to passively wait for higher education, which is chasing industry trends, to cultivate talents immediately. On the contrary, companies must accelerate internal skills training and education training to drive the entire organization in up-skilling, Even the development of re-skilling to support the development of enterprises in digital transformation.
   Soft power: refers to those strengths that are difficult to evaluate through tests, such as rationality, teamwork, communication skills, and leadership skills. When evaluating digital transformation, it is often referred to as the value of hard power indicators. After all, digital means the application of technology. However, in truly digitally mature companies, the biggest difference lies in the soft power of personnel. And what kind of soft power is important to companies advancing the process of digital transformation? They are high adaptability, high learning ability, and empathy. Such rapid and drastic changes are why so-called digital talents must have high adaptability to adapt to changes, as well as high learning ability to manage changes. And empathy is because, in many environments, people who understand empathy tend to become better team members.
3. Technology and Tooling:
   In the process of digital transformation, it is also necessary to pay special attention to the fact that its core is not technology. Too many decision-makers focus on the introduction of technology and fail to thoroughly examine the application and value aspects, thus losing the overall sound development of digital transformation. Balance, and eventually even lead to the failure of the transformation project. But in the end, the so-called digital transformation in the process of combining digital technology and business model is definitely about technology, that is, how companies can import technology into different operating processes to drive the update and transformation of business models.
4. Data Ecosystem Management:
   In the process of advancing the digital transformation of the organization, perhaps the organization has established a very supportive digital strategy, cultivated a corresponding digital culture, and at the same time enriched the organization’s digital capabilities and talents, and introduced related technologies, but allows leading companies What continues to lead is the management of the data ecosystem: from data acquisition, data architecture, data governance, to data application. In the past few years, companies have often discussed issues such as big data analysis, artificial intelligence, machine learning, or neural networks. High-level analysis technology can create huge value at all levels of business, but this must be based on the effectiveness of data, authenticity, and completeness. The validity, authenticity, and completeness of the so-called data must be established in a sound data management system to ensure that data analysis has business decision value.

How Should the Organization Plan Its Transformation Strategy?

For different types of industries, organizations of different sizes, and companies with different visions, their digital transformation strategies may be different.

However, in our observations, successfully transformed companies compare the organization we mentioned earlier with culture, talents and abilities, technology and tools, and data management have all brought into the layout and planning of digital transformation to establish a highly supportive and sustainable transformation strategy. After analyzing hundreds of successful digital transformation cases and our service experience, we have compiled a basic framework for industry players to evaluate the company's deployment of digital transformation strategies.

How Will Automation Drive Digital Transformation?

Cloud-based technologies such as robotic process automation (RPA) and intelligent automation (IA) can quickly automate existing business processes, thereby freeing up resources and providing new standards for processes and business intelligence, laying the foundation for digital transformation plans.