Types of Digital Transformation
In digital transformation, companies leverage new tools and technologies to improve workflow, develop smart products and processes, achieve greater customer engagement, and create a more efficient process.
This can happen gradually, with small changes to modernize legacy systems at different levels of the organization, or through a broad shift in culture and operating model for the entire company.
In both cases, companies typically seek to achieve one or, based on the specific goals and digital maturity of an enterprise.
1. Transformation of Business Operations
Business process innovation changes the way companies operate internally. It affects how employees access new technology and use it for their day-to-day jobs. This includes automating manual processes and maximizing investments in marketing, research and development by collecting new data and incorporating them into business decisions.
The main goal of business transformation is to reduce the cost. Other objectives include reducing the time needed for marketing, improving the quality of products and services, improving the customer experience, and improving the brand image.
2. Transformation of business model
This kind of shift changes business models to adapt them to the new digital environment. This requires careful consideration of how the industry's core business works. Successful change can disrupt an entire industry - like Netflix did for home videos and Amazon retail.
Transforming the business model often involves the strategic part of the work to explore the potential of new ways of doing business, beyond what is currently in the industry. focuses on innovation and "thinking outside the fund" to improve business outcomes.
3. Convert Domain
Shifting the range means exceeding the traditional limits currently facing the brand's markets and potential. For example, Amazon Web Services online retailer Amazon Web Services, now the world's largest cloud computing provider with billions of dollars in revenue. Amazon has acquired existing capabilities (large and highly advanced data centers) and turned them into a new opportunity that has created a whole new market.
This field convertibility can be found in many industries and is driven by technologies such as artificial intelligence, new types of mobile phones, wearable technology and the Internet of Things.
4. Cultural Transformation
Digital transformation has a cultural component, which is critical to the success of any digital transformation initiative. For many organizations, this transition can be difficult. Digital transformation must begin with educating existing employees, to ensure everyone understands the potential of new technology to improve the business, establish internal collaboration, and create new ways to engage customers.
Leveraging technology and creating a continuous innovation process requires a workforce that can adapt to change and is ready to learn and develop continuously. These skills and capabilities are essential to integrate technology into the company's fabric and transform processes, business models, products and communications.
5. Cloud Transformation
Cloud transformation helps organizations migrate information systems to cloud computing environments. It can take different forms - for example, a company can migrate only specific apps, data or services, retain some old infrastructure, or transfer its entire infrastructure to the cloud.
The other dimension of cloud transformation is ownership - some organizations benefit from the public cloud, a third-party data center managed by the cloud provider. Others have created in-house cloud computing infrastructure, known as a private cloud. Combines many models to create hybrid cloud management for infrastructure.
Cloud innovation provides many benefits, including more efficient data sharing and storage, faster marketing time, and greater organizational scalability and flexibility. At the same time, it raises significant organizational challenges including governance, security and cost control.
6. Convert Domain
Field conversion refers to a company that uses new technology to expand its offerings. Many companies often choose to grow by entering new areas and offering a wider network of services or products that not all necessarily belong to the same market.
For example, Facebook started out as a strictly social media platform. However, due to the popularity of video streaming services on demand, Facebook Watch was launched in 2017.
Since its inception, Facebook Watch has developed a lot of original content such as text TV series, talk shows, sports shows, documentaries and much more. Its competitors include other popular streaming services such as Netflix, Amazon Prime Video, Disney +, etc.
7. Cultural/organizational transformation
This kind of digital transformation journey is about transforming business culture. A company's overall digital transformation cannot occur without the support of the enterprise workforce.
A company that engages in such a process needs to change its practices, objectives and overall thinking towards supporting digital innovation and adopting more future thinking attitudes and emerging technology.
To change the company culture, you usually need to start from the top with employees who follow the example of their leaders.
In some cases, staff may also need to be reconfigured as new talent may need to be recruited to help the company succeed in its new direction.
However, change in way of thinking often occurs naturally in some companies.