Defining Digital Transformation
Digital transformation is a term often used today but not always understood. First, let's define transformation.
Transformation is a comprehensive scale change to a business' foundation, from operating model to infrastructure and everything in between - what is sold, to whom it is sold and how. A transformation programme affects each function of a business, from purchasing to technology to sales and marketing.
Businesses typically build and establish new products and services, tap new markets, sell to or go into mergers with competitors, or exchange components from their value chain to be more competitive, but these things are not automatically transformative.
Transformation, which is expensive and high-risk, is not a choice that a business makes. They transform when they have not evolved successfully.
A business that evolves with its market, keeping products and proposition up to date, attracting new customers and increasing the value of existing ones, it need not transform.
A business may experience radical changes and substantial restructures, but it's only a transformation when such changes are highly visible from the outside and were caused by external factors.
Core Transformation Drivers
Three types of changes drive transformation: changes in consumer demand, changes in technology and changes in competition. These are, of course, an ecosystem, and it is when these factors converge that market changes occur.
When any of them coincide to the effect that a business' operating model no longer serves its customers, the business has come to a tipping point. Here's the deal - an evolving business doesn't reach tipping points because they detect the opportunities and nip them in the bud.
Evolving businesses are always concerned about their customers' changing needs, adapting as they come. A business that spots a tipping point too late must transform. Now we define digital.
In the broadest sense, it is any technology that links people and machines together via information. Hence, "digital transformation" is a noticeable wholesale restructure intended to avoid a tipping point triggered by digital technologies and downstream market impact.
Different Organizations and their Roles in Digital Transformation
Global consultancies typically handle digital transformation programmes for large businesses. Transforming a big organization takes a huge amount of time, resources and cross-functional business skills which are usually only offered by global consultancies.
Creative agencies, on the other hand, help businesses steer clear of the need for digital transformation. Their specialties include understanding new markets and technologies, linking businesses to consumers and predicting market movements.
They work hand in hand with their clients to do all of these. They create prototypes of new products and services, and trial products and experiences so they can paint a clearer picture of the future and be ready for it, not just to participate but also to lead, check here to know what does digital transformation mean.