Digital Transformation. What is it?

6 min read

In the modern world, nobody will whether digital revolution was inevitable. Because it is already happening. Today, almost everyone, in one way or another way, uses gadgets and modern digital services, ranging from social networks, television and entertainment, to government services. It would be strange to assume that in this new digital economy, business will be able to work using old-fashioned business models. The driver of the change is modern consumers and changes in their preferences and form of consumption of goods and services.

Digitalization or digital transformation - this trend is already firmly entrenched in the programs of the largest panel discussions at economic forums and specialized conferences. The potential of this market is simply enormous. Today, according to our estimates, more than 60% of the world's largest corporations are already working on their digital transformation strategy, moreover.

Businesses all over the world are usually committed to high technologies and breakthrough strategies, but for now, they are being implemented on a small scale. Many people are confused with terminology, perceiving digital transformation as “knowing what technology or service to replace in a company” - I call this approach “patchwork automation”. But the main problem that we encounter in advising our clients is the lack of appropriate personnel - so far there are not enough people with certain competencies and expertise in this area. Many are doing something, but it is not clear why they do it in strategic sense, there is no understanding of where to start, etc. To overcome this, companies need to reform the structure and select departments that will be engaged in digital transformation.

The most beautiful thing is that the main driver of change is the modern consumer - business is changing under the influence of new factors. That is why digital transformation is not a service of consulting companies, but an inevitable process that is going through global business, adapting to the new conditions and preferences of the digital economy society.

Digital transformation is not so much about technology as about changing the thinking and culture in a company. Here are a few key areas of digital transformation:

Customer centricity

It is the need to understand your consumer; and the study of his behavioral characteristics is a key direction of digital transformation. Only with this approach you can be effective tomorrow, respond to tectonic and reactive changes in the market. Accordingly, businesses need all the tools and the ability to adapt to a rapidly changing consumer and communications culture.

If in the traditional model of communications, a brand used communication channels as a broadcasting tool for the broad masses of the audience, today the brand is becoming part of the consumer communication system, content provider, and interactive element.

Today, a product is not just a product or service, but a complete process of interaction with a customer. Already formed expertise called "customer experience" is a set of impressions that the client receives in the process of interaction with the company, its services and products. Many companies have launched a customer-centric transformation and are exploring, analyzing and managing customer experience, using it as a platform for growth and the creation of new products and services.

Partnerships and Collaborations

Digital transformation is based on developing infrastructure as a platform or a whole eco-system of a company. Open API and flexible integration are the most important components here. This helps businesses find new extraordinary solutions in the development of its products and services through collaborations and integration with other services and partners. Surely, you have already noticed how rapidly the number of such projects in the world is growing - from the banking sector and insurance to medicine and retail. This interaction allows you to quickly and efficiently test and bring to the market completely new products and services.

Digital partnership is becoming one of the important factors of scaling, which allows companies, regardless of their geography of presence, to conduct business in any place on the planet. For example, the introduction of artificial intelligence and neural networks in insurance allows major players to consolidate regional markets based on a unified service system.

Data usage

Big Data is no longer just a trend, but a working tool, without which it is impossible to imagine the work of a modern company.

The major stages of data evolution are the three main strategic periods in the development of the company's IT infrastructure: collecting and analyzing data, sorting and segmentation, enriching data from internal and external sources, using data to adapt the company's products and services. All three stages are quite laborious and important, so they can take some time, which is important to consider when forming a digital transformation strategy.

Already today, Big Data, artificial intelligence, neural networks are part of financial services companies, retail and medicine.

Search and innovation

In recent years, the word "innovation" sounds everywhere - everyone wants a "magic pill" or a ready-made successful case that solves all problems, but few people think about the nature of these innovations. Thanks to digital technology, we are experiencing a transition from a preliminary design model to a model of continuous experimentation. If earlier the product was the result of a large preliminary marketing research, engineering and expert formulation, today the possibilities of digital technologies and the speed of changes in the markets are forcing businesses to constantly try and test their solutions. Thanks to modern methods of project management, we can form innovation and innovation centers in companies using flexible methodologies, the essence of which is regular work on finding and testing new lines of business development, products and solutions.

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