What is the difference between digitization and digital transformation?
Digitization is the process of transforming the physical aspects of your work and business processes into digital ones. Representing non-digital or physical things in a digital format means that the computer system can use that information. For example, paper forms that customers fill out are converted to digital forms that they fill out online. The digital data can then be used for analysis and business intelligence. In business, digitization initiatives may include the following projects.
- Modernization of legacy systems
- Automation of existing paper or manual processes
- Transferring the system to the Internet
However, digitization itself is not a transformation. This is just an important first step on the road to digital transformation. Digital transformation has a much broader scope that can completely change the culture of an organization.
What are the foundations of digital transformation?
For a digital transformation strategy to be truly effective, it is not enough to simply introduce new technologies. To achieve the maximum effect, transformations must occur in all aspects of the organization’s activities. We suggest the following as six key pillars of digital transformation.
Customer Service Quality
Customer-centric business innovation is one of the key pillars of digital transformation. We advise you to use new technology only after you fully understand it in the context of your customer’s service, behavior and expectations.
Employees
Employees need to feel supported, not threatened, as they embrace transformational technologies. New digital business models can only be successful if your employees fully embrace them. You can achieve this through a combination of training, attracting the right talent, and retaining existing ones by creating opportunities for them to grow.
Change
Digital transformation efforts are driving change in all parts of the business. Planning to avoid getting overwhelmed and confused by unexpected changes is essential. You must provide the necessary tools and environment for successful digital transformation.
Innovation
Digital transformation and innovation are closely related, but they are not the same. Innovation is the generation of ideas that drive change. You need to create a space of open communication, collaboration, and creative freedom that encourages employees to experiment. Once the idea has been validated, the digital transformation can continue to bring it to life on a large scale.
Leadership
Business leaders must take the initiative and bring order to all digital transformations. You must think ahead, explore any technology from different perspectives, and inspire others to do the same.
culture
When digital transformation leaders implement the previous five pillars, a culture of innovation emerges. Driven by the passion of employees who strive to provide the best customer experience, digital transformation initiatives are rapidly expanding and becoming successful.
What are the types of digital transformation?
There are four main types of digital transformation that any organization can implement.
- Buisness process
- Business model
- Business domain
- Organization of culture
Let’s look at them in more detail using examples of digital transformation.
Buisness process
Process transformation looks at innovative ways to improve existing internal and external work processes. New technologies often radically change and improve processes in order to achieve better business results.
For example, Origin Energy Ltd (Origin) is one of Australia’s leading integrated energy companies. Origin has enabled its customers to self-service energy bills and manage utilities by moving to the AWS cloud. It has transformed its customer-facing digital processes in a comprehensive manner, leveraging the benefits below.
Cloud Computing Resources to Meet Peak Demand
Reduce invoice processing time by 30%
High performance cloud storage to handle multiple customer interactions via website and app
These digital transformation efforts have reduced call center workload and operational costs, and improved customer satisfaction.
Business model
Model transformation is about reimagining the existing business model with cutting-edge technology to offer core business services in new ways or through different channels and increase revenue growth and customer reach.