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What are The Essential Components Of Digital Transformation?


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The factors that define a successful organization change according to time and the trends available. For the past few years, the capacity of being agile, resilient, with fast decision-making and increasing levels of productivity are the ones defining a good organization. All those factors can be achieved with digital transformation – and the big companies are aware of that: digital transformation investments to top $6.8 trillion globally between 2020 and 2023.

To change the way business and operations are conducted, digital transformation is the best and most suitable option. The term itself has entered the realm of different enterprises in IT, supply chain, procurement and financial departments, but digital transformation can work for everything if the strategy in place is built to suit the company.

Embarking on the digital transformation agenda without clarity on its essential components of it can be tricky and lead to problems and errors along the way. But of course, when building a digital transformation strategy, not only the essential components should be considered, but the company should have a clear vision of what it will mean for them.

What Does Digital Transformation Mean?

Before understanding how digital transformation can benefit the business, what are its advantages, it is important to figure out what it means, so all the strategies can work. 

Capgemini Consulting and the MIT Center for Digital Business conducted a study to create a road map of digital transformation, which they explain as the use of technology to radically improve performance, has changed billion-dollar organizations. Those organizations used the term for the first time in late 2011, and since then, it has become a hot topic for companies across the globe.

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The explanation given by Capgemini Consulting and the MIT Center for Digital Business is the most used one, but to say in simple words, digital transformation is the plan and methods a company can adopt to digitally transform the business, and it can be about digital transformation data, digital technology tools like online fax, organizational change or process.

The Essential Components Of Digital Transformation

There are a few key components needed to execute an organization’s digital transformation:

1. People and Leadership

Digital transformation should start with people, and the company must always remember that there are humans at the end of the data. To conduct any transformation, the correct mindset and the best guidance should be combined with the right leadership in order to transform the business in the best and more effective way possible.

Adding tools and changing processes will not work if the people behind it are not aligned with the vision and the benefits they will get from it. The right team and good leaders will lead the way to the best outcome of the digital transformation strategy. 

Having agile leaders that can adapt to new technologies and be flexible in their approach, while keeping the company’s culture is essential, but they should also be risk-takers and always go after the opportunities to change and innovate.

2. Data

The second essential component of digital transformation is data, which holds all the knowledge the company needs about their own processes, customers, market, and employees. 

Data analysis and integration will help the company identify all the current gaps and changes required before they even start to select their preferred technologies to start the data transformation strategy. 

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Looking at data is what will make the responsible teams find the best solution to problems. Data analysis combined with the right tools is what will turn data into insights. Technology gives data meaning and with this meaning, the company can predict the next steps and take the right decisions.

3. Technologies

People combined with the data the company has available will generate the knowledge needed to see the gaps and define which technologies should be implemented. And defining the ones that will fit the goals the company has established is a crucial and essential component.

Implementing and updating technologies require big financial investments, so doing it correctly will avoid unnecessary extra costs.

The new-age technologies being embraced by most companies nowadays are:

  • Cloud and distributed platforms
  • Data analytics and artificial intelligence
  • Digital experience and digital reality

Now, the digital transformation strategy adopted by companies also needs to address the remote working policy that many had to adopt in early 2020 and decided to keep as the standard practice. Organizations are gaining productivity with digital interfaces of their processes across different channels and services. This makes teams more connected and better at their decision-making.

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