Digital transformation, which includes the use of digital technologies to make business processes more efficient or effective, not only involves the introduction of an existing service into digital form, but also the use of technology to make this service significantly better. As companies become more aware about the importance of digital transformation, spendings on this topic rapidly increase.
Digital transformation involves many different technologies, but the Internet of Things, big data, artificial intelligence are the leading technologies among those. The success of digital transformation projects of course not only depend on these technologies. The adaptation of the business processes and corporate culture is vital for the success of these initiatives. Digital transformation projects, which is an important plus for big companies in competition with their competitors, of course has some small risks.
According to a recent study done by Grant Thornton, more than two-thirds of CFOs and top-level finance managers (69 percent) plan to increase their investments on technologies that will accelerate the business processes, and 4 out of 10 of them say that this rate will be more than 10 percent in 12 months. Nearly half of the CFOs and senior finance managers say that the investments of the companies on the digital transformation provide a competitive advantage through differentiation.
In a survey conducted by Gartner with 460 executives, 62 percent of participants tell there is a management initiative or transformation program to make their work more digital. More than half (54 percent) stated that digital business goals are transformational, and 46 percent say the purpose of the initiative is optimization.
In accordance with this table, and according to IDC (International Data Corporation), $1.3 trillion was spent in 2017 on the digital transformation technologies covering hardware, software and services. In 2021, spending on the digital transformation is expected to be almost doubled. The World Economic Forum suggests that the value of the digital transformation, both in social scale and specific in institutions, can reach up to $100 trillion by 2025.
The research done by IDG on 702 IT and managers provides insight about how digital transformation is understood. 52% of the experts defines being a digital company as the increase in productivity depending on the use of data access and mobility tools by employees. Nearly half of them states the digital transformation as the ability to manage the business performance better through data availability and data visibility. The other 46 percent see the digital transformation as “always providing access to company assets in any place that is safe and optimized”.
A real digital transformation project involves the basic review of the business models and processes, rather than dealing with the traditional methods or improving them. In contrast to what is commonly understood, digitalization is not the implementation of further technologies and related services. Digital transformation is creating something new. This could be an improvement in the customer experience, organizing the supply chain, or benefiting from the data to deliver new products.
When you move your database to the cloud, this is a digital transformation. When the customers can pay through a secure website, this is a digital transformation. When employees can manage and monitor their work plans on mobile phones, this is a digital transformation.
All this digital transformation is a challenging process for managers. According to a research done by Cass Business School, most companies fail when it comes to implementing new business models or transforming good ideas into organizational goals. On the other hand, the number of companies setting great examples of digital transformation is not few. At this point, getting support from consultancy companies which can determine the right roadmap and implementation, facilitates the digital transformation process of the companies.