Digital transformation benefits (Article 1)

Where’s the beef in the much-discussed digital transformation? At many companies, there’s a lack of clarity on what digital transformation is, and what benefits it offers. I’ve written six articles to clarify confusion, and describe the opportunities. The goals of these articles are to:

1. Enhance your understanding of digital transformation.
2. Describe situations where digital transformation can deliver significant tangible business benefits.
3. Separate digital transformation value from hype.
4. Provide an overview of the related information technologies.
5. Describe best practices for digital transformation implementation.
6. Trigger thinking about how and where you can help your company benefit from digital transformation.

The six articles in the digital transformation series cover the following related topics:

1. Benefits.
2. Systems and data issues.
3. Applications
4. Technologies.
5. Obstacles.
6. Best practices.

Digital transformation goals

Digital transformation invites companies to address systems and data issues by going beyond routine use of the web, email, smartphone apps, and the in-place portfolio of IT systems. Beyond typically means better data, more integrated applications, and timelier data availability.

The goals of digital transformation include:

1. Making smarter, data-driven decisions faster.
2. Reducing the risk of making poor decisions.
3. Leveraging assets, including data and capabilities, more efficiently for growth.
4. Stemming erosion of market share and margin.

Digital transformation benefits

Digital transformation offers companies the following benefits:

1. Reduce operating costs: Optimizing business processes with digital technology can reduce operating costs.
2. Support data-driven decisions through data analytics: Digital technologies can combine operational data and formerly paper-based data sources into a practical, actionable view of the company’s progress against the business plan.
3. Increase agility and innovation: Digital technologies that supplant the limitations of legacy IT systems can transform companies to become nimbler and quicker to respond to changing stakeholder expectations, market trends, and technology advances.
4. Provide a productive, universal employee experience: Operating with integrated digital technologies can offer employees a consistent experience, regardless of when, where, or how they choose to interact with their company’s systems.
5. Convert data into actionable intelligence: Leveraging business intelligence, optimization, and analytics tools can improve decision-making and reduce risk.

This list of benefits should trigger thoughts about digital transformation projects you could undertake at your company.

Digital transformation definitions

We often hear multiple, confusing, and contradictory definitions of digital transformation. These definitions will help you differentiate the good from the bad and the ugly.

Good digital transformation focuses on transforming business processes and practices to help companies compete effectively in an increasingly digital world. Producers leverage digital technologies in support of improving business processes.

Bad digital transformation implements new technology for its own sake. Technology is applied to conduct business in new, different and disruptive ways. It’s not clear that the change produced a worthwhile net benefit. However, the implementation is typically disruptive.

Ugly digital transformation implements cutting-edge technologies because it’s cool. Operating advanced technologies that may not be ready for prime time is dangerous because it will be an expensive distraction. However, experimenting with cutting-edge technologies to understand their potential through small proofs of concept builds valuable learning.

The bottom line is that digital transformation is about improving business processes, with digital technologies playing an essential role in achieving this goal. However, technology should not be the primary focus.

The second article discusses systems and data issues that are digital transformation opportunities in disguise.

For a video of the digital transformation experience at Innovapost, please watch the Fireside Chat: Top priorities and challenges for digital transformation