IT/IS Course – Digital Transformation

Nowadays, we live in an increasingly digitalized world, where technology

is an important and crucial part of the companies´ strategy. However, it wasn´t
always like this. Although the industrial revolution, at the end of the 18th century,
has contributed strongly to the development of the industry, the digitization of
the society only started in the late 20th century. This process underwent rapid
acceleration in the first two decades of the 21st century, spurring a growing
need for digital transformation across industries. As the world and its consumers
become more digital, a company’s success is contingent on how digital it can
become.

In this way, digital transformation can be defined as the process of using

digital computer-based technologies to transform existing traditional and non-
digital business processes, services, and strategies, or creating new ones, to
meet with the evolving market and customer expectations. It´s a foundational
change in how an organization operates, communicates, engages, and delivers
value to its stakeholders (customers, employees, partners, and shareholders),
thus contributing to the reinvention of the business model. It also involves a
change in the corporate culture, cultivating a digital mindset and exploiting new
opportunities. Digital transformation is important because companies must
evolve to remain competitive in their industry and, if they aren’t evolving, they
are falling behind. Furthermore, because it’s an evolution, this process doesn’t
necessarily have a clear end point, which leads companies to continuously
improve how they operate.

To this extent, it is possible to highlight 5 blocks of the company that will

suffer changes and those changes will result on the digital transformation: the
business strategy and culture, the staff and customers engagement, the
processes and innovation, the technologies used, as well as the data and its
analysis.

The digital transformation process, apart from contributing to the

competitive advantage of the companies, also has other benefits as it increases
the productivity and efficiency while reducing labor costs, improves the
customer and employee experience, boosts innovation and agility, updates skills
and knowledge, more agility and responsiveness to changing markets, and
drives data-based insights, among other.
 Moreover, the Technology's ability to rapidly collect, generate, analyze
and transmit data is the main driver of the digital transformation. Additionally,
Artificial intelligence, cloud computing, mobile technologies, social media
platforms and next-generation technologies, such as the internet of things (IoT),
blockchain, and augmented reality, contribute to digital transformation, as well.

We also know that many organizations are developing their digital

transformation journey. To do that, enterprises must focus on the 3 of the digital
transformation strategy:

1. Customer Experience — working to understand customers in more

detail, using technology to fuel customer growth (like analytics-based
segmentation), and creating more customer touchpoints (including
customer service, cross-channel coherence), as well as offer a customer
design
2. Operational Processes — improving internal processes by leveraging
digitization and automation, enabling employees with digital tools
(workers have the opportunity to work at distance, broader and faster
communication, for example), and collecting data to monitor performance
and make more strategic business decisions
3. Business Models — transforming the business by augmenting physical
offerings with digital tools and services, introducing digital products, and
using technology to provide global shared services, which contributes to
enterprise integration.

However, it is important to know how to develop a digital transformation

strategy. First, it is important to know that successful transformation starts
with a vision that articulates how to harness computer-based digital
technologies to achieve strategic objectives based on the organization's
own digital business model. Each organization must have its own vision of
success, but the following are steps that every organization should be
prepared to take when developing a digital transformation strategic plan:

1. Understand the market and the organization's place in it, as well as

its existing and potential customers.
 2. Analyze where the market is heading so the organization can
anticipate the potential for digital disruption and how it can be the
disruptor instead of being disrupted by others.

3. Identify the existing and potential value proposition through internal

evaluation and external research.

4. Develop a vision for what the organization should be in the future,

including how its products and services should evolve to meet
customer needs and expectations.

5. Create a digital transformation roadmap that offers a way to move

from current to future state.

As part of this strategic planning, executives should assess the organization's

existing capabilities -- from employee skills to its existing IT stack, articulating
what additional capabilities will be needed and devising a plan to obtain those
capabilities. Organizational leaders will need to draw on a number of
traditional disciplines, such as project management, as well as new techniques,
such as Agile methodologies, in order to successfully bring their organization,
its culture, its people and its technologies into the future

We can categorize organization according to their relative digital mastery in four

groups:

• Beginners - waiting to see what occurs with digital; low mastery of both
digital and leadership capabilities.
• Conservatives: digital transformation is occurring but in a limited sector
of the business; mastery of leadership but not on digital capabilities.
• Fashionistas: doing everything digital at once but without a goal or
roadmap; mastery of digital but not leadership capabilities
• digital masters: businesses that have successfully used technology to
drive business transformation: high mastery of both digital and
leadership capabilities.
Factors that improve the chances of success of a digital transformation:

1. Having the right, digital-savvy leaders in place – Leaders of

individual initiatives and leaders of the program-management or
transformation office who are dedicated full-time to the change
effort.
2. Building capabilities for the workforce of the future – Redefining
individuals’ roles and responsibilities so they align with a
transformation’s goals, which can help clarify the roles and
capabilities the organization needs.
3. Empowering people to work in new ways – Reinforcing new
behaviors and ways of working through formal mechanisms, long
proved as an action that supports organizational change.
4. Giving day-to-day tools a digital upgrade – Adopting digital tools to
make information more accessible across the organization, which
more than doubles the likelihood of a successful transformation.
5. Communicating frequently via traditional and digital methods –
Clear communication is critical during a digital transformation. More
specifically, one key to success is communicating a change story,
which helps employees understand where the organization is
headed, why it is changing, and why the changes are important.