Published by Jessica Weisman-Pitts
Posted on July 27, 2022
By Dr. Hamed Taherdoost, Professor at University Canada West
Businesses are required to make dramatic shifts to survive in the competitive environments that have emerged as the result of globalization. The necessity to transform digitally is even more highlighted today for businesses to integrate with the competitive global market through reliance on new tools and approaches. Advancements in new tools and approaches have led to high levels of uncertainties and businesses need to adapt to this constantly changing environment; otherwise, they are likely to lose their market share. Thus, Digital Transformation (DT) has become an imperative approach that is broadly applied by most businesses to achieve organizational agility which is a current concern of industry leaders in the changing environment. Digital Transformation helps businesses to maintain their position in competitive markets, respond to new opportunities agilely and be resilient against threats. Although going digital was a competitive advantage for businesses previously, it is a necessity today before they are left behind by their digitally-focused and innovative competitors in the market.
Digital Transformation is also a must from customers’ viewpoint since it provides a better understanding of customer demands and solutions to address them. A customer’s purchasing journey can be followed and analyzed through the employment of Digital Transformation which will in turn lead to generating profit for the enterprise and gaining greater business insight [1].
The celerity of Digital Transformation growth has been significantly accelerated during recent years and the pandemic has performed as a serious catalyst. COVID-19 was an unprecedented event that drove a unique circumstance in which individuals and businesses were imposed to conduct their daily activities remotely using technological solutions. The pandemic played the role of an accelerator in Digital Transformation since many businesses even in developing countries were imposed to embrace the potential to run digitally to surge ahead of their competitors; otherwise, they would lose their share in the competitive market. Investment in digital capabilities enabled businesses to gain considerable outcomes during the crisis and provided them the opportunity to realign their business models to the rapid shifts in the digital landscape.
Turning to the relevant terminology, digitalization and digitization terms are commonly labeled as digital transformation by mistake. Digitization is about making a connection between the digital and physical world by converting a non-digital asset into a digital representation of an artifact such as scanning a paper document. Digitalization, on the other hand, presumes digitization through the employment of digitized data and digital technologies. Thus, it leads to making improvements in business processes from human-driven to software-driven without transforming them. However, Digital Transformation is a much broader concept than employing technologies, tools, or upgrading existing systems since it influences business processes and strategies by digitalization technologies.
Although Digital Transformation seems interactive in concept, along the digital transformation journey, businesses face a range of challenges that inhibit them from benefitting from the advantages of Digital Transformation. Over-reliance on manual processes, destructive organizational culture, lack of technical skills, resistance to change, top management attitude toward change, limited budget, lack of knowledge, hierarchal company structure, and security concerns are common challenges in the roadmap towards Digital Transformation. Challenges are likely to happen in all phases of Digital Transformation whether it is the initiation phase, the execution phase, or the coordination phase. It is indicated that people-related challenges are more influential as people may be unwilling to change and ignore the attempts to go digital. Individuals’ negligence to support Digital Transformation can simply neutralize assigned sources to make a change [2]. The establishment of an appropriate Digital Transformation strategy facilitates the transformation journey by overcoming challenges.
The Digital Transformation strategy directs businesses to respond to changes and adapt to the new digital landscape in the competitive market. Digital Transformation leaders realize their current level of digitalization, future vision, and approaches to stand ahead in the market and protect the business from digital disruption through an effective Digital Transformation strategy.
Digital disruption is defined as “the change that happens when new digital technologies, services, capabilities, and business models affect and change the value of the industry’s existing services and goods.” Digital disruption consists of technology, business, industry, and society as its main elements and is likely to be challenging and painful. However, Digital Transformation strategy formulation offers solid business benefits of digital disruption including increasing customer satisfaction, the growth of the company, and improving the workplace [3].
Increased awareness, informed decision-making, and rapid implementation are three core competencies to protect companies against the negative impacts of digital disruption. A well-defined strategy covers the core competencies of a business and is essential for the success of the Digital Transformation process [4]. To develop a Digital Transformation strategy that considers different aspects of a business, the vision and objectives are initially determined. Next, the capabilities of the organization in terms of going digitally are required to be assessed, the employee and end-user experiences are designed, and the best possible solutions and vendors are selected to create an excellent implementation roadmap. Finally, an adjustment is required to ensure organizational culture and the infrastructure perfectly match together.
As businesses struggle to adjust to the new normal, they empower their tools and people through shifts in business models and employment of new digital solutions and emerging technologies. Since market leaders are moving fast to improve their core operations, slow progress cannot be a winning strategy in Digital Transformation; however, leaders commonly opt to accelerate their digitalization process. Thus, concentrating on people engagement, changing organizational culture, and increasing awareness regarding the features and security solutions of digitalization that are critical considerations in the Digital Transformation strategy facilitate the shift [4].
In conclusion, a different world is shaped after the pandemic. The significant importance of investing in Digital Transformation has been revealed during the pandemic accelerator and most businesses worldwide have realized the importance of embracing the change towards going digital to gain new revenue streams and ensure their survival. However, the concepts of Digital Transformation are still mistaken by some business leaders that may resist them to navigate appropriately in the roadmap through Digital Transformation in which processes, tools, and people are changed. The establishment of a successful Digital Transformation strategy ensures the right direction to accomplish Digital Transformation goals and objectives and adjust to the new normal.
Sources
https://link.springer.com/article/10.1007/s11301-020-00185-7
https://www.sciencedirect.com/science/article/pii/S2351978917300720
https://www.igi-global.com/chapter/advancement-of-cybersecurity-and-information-security-awareness-to-facilitate-digital-transformation/284148
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