Digital transformation is the reinvention of an organization through using digital technology to improve the way in which the organization performs and serves those who constitute it. Digital refers to the use of the technology that generates, stores and processes the data.
The term transformation refers to a fundamental change in an organization’s day-to-day business, from the types of products and services it produces to the way it delivers them. An organization in need of a transformation, be it a company, government agency, or a service provider, such as healthcare, usually responds to a change in the market and consumer demand for a product or service.
The mere implementation of technology alone does not produce digital transformation but changing an organization to take advantage of these potential technologies does. A 2011 study conducted by the MIT Center for Digital Business and Capgemini Consulting examined 157 executives from 50 companies with annual revenues of $ 1 billion or more. The study found that to transform organizations must redesign they’re main business and operational models as well as the resulting products and services.
An example of a company that has successfully crossed the digital transformation is Nespresso. The manufacturer of specialty coffee machines, an operating unit of the Nestlé Group based in Switzerland, deployed a cloud-based customer relationship management system that provides customers with omnichannel access to shopping and service options. Customer service: they can still reach the company using the website or a mobile device or by visiting a store. A unique vision of each of its clients has allowed Nespresso to enter more markets and improve sales.
In another example, the Schindler Group took advantage of the Internet of Things (IoT) and cloud computing for its digital transformation. The 141-year-old Swiss company partnered with Apple and placed smart sensors in the elevators and escalators it manufactures. Now, when a component starts to fail, or a machine stops working properly, sensor data alerts a back-end system, which uses a smart rule engine and a custom iOS mobile application called FieldLink to assign work to a technician.
Despite all the benefits, digital transformation is a struggle for many organizations. The MIT and Capgemini research found that successful digital transformation does not happen from the bottom up; It must be driven from the top. To become a digital company, which is the ultimate goal of any digital transformation, CIOs need to move beyond their traditional role as IT cost center managers and become a business leader who understands the potential of new technologies. and can create new business models.
What are the advantages of Digital Transformation?
The key for the organization is to see the digital transformation as an opportunity that allows combining practices and ways of doing that result in new techniques and skills.
1- Generate new experiences for the client.
2- Improve operational efficiency.
3- Generate new sources of income.
4- Ability to react quickly to changes in the market.
5- Create a competitive advantage for the organization.
6- Promotes the culture of innovation within the .organization.
7- Improve internal collaboration.
8- Deepen the data analysis (Big Data).