WE ARE DIGITAL TRANSFORMATION OR DIGITALIZATION!

We hear a lot about digital transformation and want to make this transformation. We hope that everything you understand about digital transformation is correct, because this will help you build an effective digital transformation strategy. Next, let’s clarify with Cloudbase the concept of digital transformation, how digital transformation and digitization are different!

What is Digital Transformation?

Digital transformation is the process of assessing, rethinking, strategizing, and repositioning an organization’s business operations in the digital economy. The word “Digital” refers to the pace of change that is taking place in today’s world due to the rapid adoption of new technologies. The word “Transformation” here refers to the way an organization is built to change, innovate, and reinvent rather than simply upgrading and supporting traditional methods.

Transformation happens when we innovate – creating new products, services, and business models. These innovations are loved by customers and impact our entire industry.

Specifically:

Implementing a system to support online ticket booking for customers instead of customers having to go to the place to buy tickets traditionally. This is not a transformation, it is just a digital service replacing manual service and there is nothing innovative here. Just a new way to match customer expectations.

Now imagine what would happen if we completely eliminated the need for customers to enter a support query by using an AI Bot to detect and fix all issues before they even happen. This would be an innovative game changer. This solution would change the business, impact the industry and delight customers. It would also create a new competitive advantage. Or you would create a business model where customers would only pay for continuous, uninterrupted service (customers would not pay for any interruptions). You guarantee uptime rather than reacting quickly to downtime. This is an innovative business model. And that is truly transformational.

To deliver such a solution requires a complete overhaul of product development, support teams, heavy investment in innovation, communications, sales, finance and more.

Digital transformation is not a project. Nor is it a strategy among business strategies. Digital transformation will be the “compass” strategy that all other plans must rely on. It is an effort to reposition the business in the digital economy. It is not just the work of IT – IT. Very few IT leaders are agreed to delegate authority, training or negotiating in transforming a business.

This is the first and most important challenge for business leadership. If leaders neglect to learn and improve their knowledge about digital transformation, they will not understand and grasp the business potential of new technologies, as well as new modern data and frameworks for strategic planning. As a result, businesses will simply digitize. This makes us vulnerable to disruption in digital transformation strategy.

By now, you should have a clear understanding of whether your business is actually undergoing Digital Transformation or simply undergoing Digitization.

Let’s clarify more about Digital Transformation and Digitization:

The term “Digital” is often applied to any new technology (not just IT). But the term “Transformation” is a bit vague, because technology itself does not change the business. Leadership, thinking, strategy, culture, communication, innovation, data are often more important than the technology itself, if we really want to transform.

Digitization is often confused with transformation. Taking existing processes and digitizing them is an important first step. But it is not transformation. We have been using technology to improve physical and mental processes since the industrial revolution. Customers expect businesses to have websites, apps, social channels, platforms. These things do not transform a business, they enable businesses to continue serving their existing customers.

According to Professor Michael Porter of Harvard University, creating more efficient operations using technology is desirable but not strategic. Digital transformation is a strategy to reposition a company’s business operations in the digital economy.

Now that we have a better understanding of digital transformation and digitization, let’s hope we all know which path we are on so we can achieve success without paying too high a price for our business transformation aspirations.