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5 important facts about digital transformation

EducationSummary: Digital transformation is a hot topic these days. But, while it’s a growing trend, it’s still surrounded by a lot of confusion. Not every business leader fully understands the benefits, risks, challenges, and realities about digital transformation. In this article, we’ve rounded up some important facts that every business leader should understand about the topic.

photo credit: BenjaminNelan via pixabay cc
photo credit: BenjaminNelan via pixabay cc

What is digital transformation? It’s a growing trend. It will dramatically impact businesses over the next few years. It’s something that your business cannot afford to ignore.

Yet, it’s hard to find a single, understandable definition of the term that everyone agrees on. Different articles define digital transformation in slightly different (and often complex) ways.

So, what exactly does it mean? Let me try to explain it in simple terms:

Digital transformation stems from a simple fact: The world is going digital. From shopping to banking to communication–and everything in between–many of our daily tasks are now digital. I doubt anyone would argue that this will only increase.

The problem is, many businesses are not prepared for this new reality. The technologies, processes, and skills they have in place do not translate to a digital world. The modern company must transform itself and adopt the technology and processes needed to operate in today’s digital world.

Now that we’ve defined the term, let’s move on to the next big question: How will it impact your business? What must a business leader understand about this topic?

Today, let’s answer those questions. Here are 5 facts you cannot ignore about digital transformation.

1. It’s not something you can ignore

I hesitate to call digital transformation a “trend.” A trend comes and goes. A trend is optional–it’s something you can choose to ignore.

Digital transformation isn’t going anywhere. The world is moving in that direction, and shows no signs of slowing down. Do you want to hang on to your old technology while your competition moves ahead? How will that impact the way your customers and prospects view your business?

The fact is, you can’t afford to ignore digital transformation. As explained below, it’s essential for any company that hopes to remain relevant in the near future.

“For companies to remain relevant, need to keep up with their customers’ ever-increasing expectations while encouraging innovation,” says Kevin Niblock, President and COO of Software AG, North America. “Doing so means embracing the disruptive technology and progressive trends that are transforming the way they do business. Companies that can’t do so may soon find themselves obsolete. Top IT leaders recognize this and regard digital transformation as the most important way to remain competitive. In IDG’s annual State of the CIO survey, 45% of CIOs identified their role in 2016 as “transformational.” But transformation isn’t easy. Or simple. While this definitely creates new opportunities, it also creates challenges, especially for organizations that have not aligned their business and IT strategies. Some companies believe digital transformation is about cutting costs, but that motivation cannot overshadow its more meaningful purpose—enabling and delivering a wholly new type of customer experience.”

2. It’s a company-wide transformation

photo credit: geralt via pixabay cc
photo credit: geralt via pixabay cc

While digital transformation is essential, it won’t be easy for most companies. Why? It’s not just a change that you can implement in a single department. It involves changes at all levels of the business.

This creates a problem for many companies, as various departments across the business don’t operate on the same page. Some use different processes. Others use different technology. As explained below, this siloed approach creates problems when it comes to digital transformation.

“One of the biggest challenges companies are facing with the Digital Transformation is that, in most cases, their companies—and the functions that support them—are siloed,” says Dinesh Dhanasekharan, CTO of Excelacom. “It’s terrific that companies are collecting an increasing volume of Big Data, analyzing it and using it to make intelligent decisions about one or more parts of their business. But no one is looking at all of it across the business and how it is integrated with the business. Everyone has intelligence in their own little part of the world. Some of the larger companies are starting to figure this out, but it’s really just a few. That’s one thing that leadership really needs to challenge their teams with—how can we look across the company and implement technology and processes that can transform our business?”

3. It’s not just about technology

By its very nature, digital transformation revolves around digital technologies. You must create systems and implement technologies that will help your business adapt to the modern world.

But, the technology is the easy part. A recent Forrester study finds that company culture is often the stumbling block in digital transformation efforts: “Culture and organization lag behind process and technology when it comes to digital readiness. For digital transformation to succeed, you need to make cultural change and educational aspects of transformation a highlight of your plan.”

In short, your employees get used to doing things a certain way. Don’t get so caught up in the technology changes of digital transformation, that you ignore the culture shift.

“Just because a business has implemented modern technology into their business to try and streamline certain processes, it doesn’t mean that they’re automatically going to succeed in the digital age,” says Sam Williamson, SEO Executive at Flying Scot Glasgow. “There is a huge difference between surviving and thriving, and by embracing the digital age and trying to truly understand it, a business can flourish. Many entrepreneurs are under the false impression that simply by introducing new software or machinery into their business, they can undergo an effective digital transformation. But in order to truly undergo a productive digital transformation, a business needs to make sure that they understand how to use the new technology effectively, otherwise it could actually be counterproductive and rather costly for your business.”

4. This is a competitive opportunity

The facts listed above might make digital transformation sound scary. It involves change. It involves new processes. It means that your business must operate differently. For many, this is frightening.

But, it also brings an enormous advantage. According to a recent report, “87% of companies feel that digital transformation is a competitive opportunity.”

Think about it for a minute. What if you could harness new technology, processes, and data before your competitors? What if your whole businesses operated efficiently as a team, rather than disconnected parts? How much of an advantage would that provide?

This article sums up the opportunities of digital transformation nicely: “Those that achieve digital transformation before their competitors will have advantages – and advantages have advantages. Not only do they have new experiences and new data to analyze and understand, they are able to develop and implement new strategies that make no sense to slower competitors without access to the new data. The digitally transformed can act on data invisible to slower competitors.”

5. The skills gap is the biggest hurdle to digital transformation

So, you know that digital transformation is essential. You know that it provides a competitive advantage to those who jump on board early. So, what’s stopping companies from moving forward?

For most, the problem boils down to talent. A Capgemini article revealed that, “77% of companies considered missing digital skills as the key hurdle to their digital transformation. The impact of digital technologies is now felt not only in the IT department, but across the entire organization, creating a huge demand for digital skills.”

The question: What can you do about it? If you’re facing a talent gap, how can you get past this hurdle? While there are plenty of options, I won’t get into all the details here, as I’ve covered this topic in a past article. You can check it out here: 6 ways to bridge the skills gap.


These are just 5 important facts about digital transformation, but the list could certainly be much longer. If you would like to add anything to this list, I’d love to hear it. Feel free to share in the comments.

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  1. Pingback: 5 Big Challenges Facing CIOs and IT Leaders in 2017 | TayganPoint Consulting Group

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