What is Digital Transformation

Digital transformation is more than a buzz word, it is the integration of digital technology in all the aspects of our lives. The increasing use of digital technologies by consumers is having an incredible impact on the global economy and continues to drive change at a pace not seen since the industrial revolution. Many organisations, government and commercial, have adopted digital transformation. But just as many are resisting change. Those doing so run the risk of being left behind and ultimately pushed aside by more agile and responsive organisations.

The evolution of digital technology has changed the business landscape. We are at the beginning of another phase in the digital journey. Driven by the need to access information, products and services, easier, faster and without interruption, organisations and businesses of all sizes are adopting new processes, skills and technologies to meet the growing demands of the digital consumer. For some, digital transformation means a drastic rethinking of the business value chain. From product and service conception, to delivery and consumption, businesses are investing in new digital touch-points and the enabling technology. An investment needed to remain competitive, visible, and to ensure longevity.

Digital transformation has radically changed some industries.

Cloud computing, no longer the exclusive terrain for the information technology (IT) and telecommunications industry, now provides new opportunities for even the most traditional sectors in our economy, including manufacturing, agriculture, energy and health. Digitally native and traditional bricks and mortar businesses are using technology to improve processes at each point in the value chain.

Digital transformation represents a change in the way we think about the relationship between the customer and business. This has been brought about by the ever increasing demand for digitally enabled products and services. Organisations and businesses choosing to adapt and proactively respond will benefit at the expense of those who do nothing. Digital transformation will enable companies to redefine the customer experience (CX), and capture the insights needed to develop products and services that customers really want.

This new era of digital transformation is helping companies realise significant productivity gains. For example, Codelco (the world’s largest copper producer) took a hard strategic look of the mining industry and understood that the future depended on significant automation of its mining operations. As a result, the company shifted its operations from a physical intensive-model to a knowledge and technology one. The company implemented real-time information sharing, helping the company effectively manage its automated mining processes, now characterised by remotely-controlled machines. [1]

Digital transformation driven productivity is not only used in heavy industry. Burberry, a British luxury brand, was one of the first to launch a major digital transformation program across multiple business areas that ranged from customer experience to operational excellence. The company implemented a large scale ERP program that helped the company to unify processes and integrate data across the globe. They ustilised social media and live video streaming technologies to integrate the traditional bricks and mortar store with the online experience. An initiative which helped the business achieve operational excellence and make it an iconic luxury digital brand.[2]

Digital Transformation is not just reshaping businesses it has more recently facilitated change within government and non-profit agencies. They have also identified opportunities in the new digital economy. Digital acceptance, brought about by increasing investment by the commercial sector, has enabled government agencies to access new technologies to transform the way they work and manage stakeholders.

In Australia the The Department of Human Services (DHS) and CSIRO worked together to monitor user feedback across social media channels using natural language processing. They wanted to understand trends and engage in user conversation to solve clients’ problems. They pick up trends in discussions about DHS work and look for opportunities to help users who are having difficulties interacting with DHS. [3]

Many businesses are reporting that adoption of digital technologies are enabling them to reach new global markets. Emerging digital channels and touch-points, such as mobile, are attracting new customers and helping keep existing ones.

The financial sector is a prime example of an industry which is benefiting from the new channels. The use of mobile applications for mobile banking by various financial companies around the world has helped them increase profits and facilitate direct communication with their customers. For many, social media facilitates timely communication with customers, and makes it easier to obtain real-time feedback and develop a deeper understanding of the customer’s needs. These companies are realising the benefits of real-time insights and customer collaboration to assist in product development and improved service delivery.

[1] Bonnet, D. (March 15, 2013 7:10 pm), From copper mines to handbags. Financial Times Online. Last accessed 22/01/2016

[2] Ahrendts, A. (From the January–February 2013 Issue) “Burberry’s CEO on Turning an Aging British Icon into a Global Luxury Brand” HBR.org. Last accessed 22/01/2016

[3] Australian Government Digital Transformation Office (2015), “Case study – Connecting with users on social media”. Last accessed 22/01/2016