Traditional business and technology

What is digital transformation and digitalization

The definition of digital transformation most often sounds like this: “it is the transformation of a business through the revision of its business strategy, models, operations, goals, marketing approaches and products through the adoption of digital technologies. It is used to accelerate sales and business growth.”

Digital transformation is also called a paperless office, the achievement of digital business maturity. It is also the transformation of the company into a modern, efficient company that does not depend on the number of physical “machines”. Most experts agree on the following.

Digital transformation is the process of implementing and using digital technologies to create new or change existing company business processes, its culture, customer experience in accordance with business and market requirements. It is not limited to one business unit and allows the company’s management to look at the correctness of actions and decisions made.
Digital transformation is often confused with digitalization.

Although the latter is just a process of using digitized information to simplify established methods of work, that is, the digitalization of business processes. Digital transformation changes the way a business is run, and sometimes creates an entirely new business.

A prime example is Netflix.

The company started by delivering film recordings by mail, which ruined the video rental business. The development of the Internet and innovative services have turned Netflix into a video streaming giant and pushed television and film studios out of the arena. The company now creates its own video products and sells them directly to subscription customers.
She explores her audience on her own platform. It receives data on their preferences and tastes: it uses recommendation algorithms, which binds to itself even more. This is what digital transformation in action looks like: taking advantage of available technologies to gain insights into how businesses operate.

Components of digital transformation:

a continuous process connection with innovations and technologies focus on increasing productivity and competitiveness base business models on customer requests and expectations “ACPM: Digital Transformation for CFOs”: “Digital transformation is about turning a company into a business robot.
Due to new technological capabilities, we are reaching a completely different level of information management and its use for making managerial decisions. In the old, non-digital reality, people recorded information in databases (documents and journals). People read, considered, aggregated information and made decisions.

People carried out the decisions of other people or set out on paper

People also controlled the processes and results. The computer makes it possible to generate up to 90% of information without people. He can consider better than a person and make decisions taking into account a huge number of factors. With the computer, analytics becomes a source of effects and profits.

The labor intensity of operations and the cost of production and management personnel in terms of routine intellectual tasks can be significantly reduced. It is necessary to start with resource thinking and improving the quality of decision-making. It would be nice to understand what processes, operations, supply are, and then solve two main problems: the first is an uninterrupted supply of resources, the second is the optimal supply of resources, taking into account the variability of the environment.
The computer helps to solve the problem of structural and dynamic control complexity. People coped with management tasks until about the 2000s. Now they don’t work anymore.

The dynamics has become too high and the paper-human systems are stalling and not fulfilling their function. All that is needed, in terms of technology, we already have. The problem is in the brains of people who set the task for automation, and a little trick of IT specialists. Let’s call it the TK curse.
What should you do? ─ cunning IT people ask. Make us a paper waybill in the computer, ─ customers say. ─ Let people call it, fill it out, print it, control it. This is how paper-human management lives inside a computer system. Another TOR would look like this: ─ Make me an invoice so that it is a robot and not a single person does anything with it, but at the same time everything that is prescribed by the process, standards and KPIs would be fulfilled. And not only the invoice, but all other control objects. In IT, they call it Digital twins.” We recommend taking Strategic Management: Tests with Answers Benefits of Digital Business Transformation