Companies are becoming increasingly aware of the need to implement a digital transformation process. According to information by the IDC, by 2027 three out of four European organizations will have gotten digitally transformed and will have similar characteristics to native digital organizations, because if they don’t, they will not be able to compete in the new arena.
The companies that fail to implement a process of this kind will be relegated to being a part of a market niche, with no growth outlook, or will have to disappear, since they will be unable to compete with the rest. Things being so, if you still don’t know what digital transformation is, we will tell you below, do that you don’t miss out on the opportunities that it can offer your company.
What is digital transformation?
The Gartner consulting firm defines digital transformation as any aspect related to IT modernization (e.g., cloud computing), digital optimization and the invention of new digital business models.
It is therefore a concept that, as pointed out by Cisco, involves the implementation of technologies to build new business models, processes, software and systems.
A process that aims to introduce digital technologies in every business area, changing the way in which they operate and offer value to the customers.
A new way to do things that does not only imply a technological shift: it is also highly related to the cultural shift that is demanded of 21st century organizations – to dare innovate, even if they may fail in their attempt.
In the corporate world, the concept of digital transformation is highly related to that of digital business transformation – the process by which digital technologies and support capabilities are leveraged in order to create a new model of a robust digital business.
However, there are many companies that confuse digital transformation with the simple fact of adopting as much technology as they can in their facilities, even if it does not offer any value or help them optimize their processes. With this in mind, below we will analyze myths and truths about digital transformation.
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Myths and truths about digital transformation
As is the case with every concept and trend, a number of myths have risen around the idea of digital transformation. Below we tell you how much truth there is to those myths.
Digital transformation is a bubble
There is much skepticism in relation to this concept among many. These people compare it to yet another technological bubble, such as the dotcom bubble of the year 2000.
In reality, digital transformation is a trend that is here to stay, and only in Spain it will imply a gross increase of 120 billion Euros in the Spanish economy by the year 2025, according to the “Spain 4.0” report by Roland Berger.
Digital transformation is the responsibility of the CTO
It is often believed that the person that must take charge of an organization’s digitalization process is the Chief Technical Officer (CTO) – this is not completely try.
It is true that within the process, the opinion of this person carries a lot of weight, but the CTO should not be the top authority in regard to its implementation, since digitalization is a cross-cutting process that encompasses every department in a company. It isn’t just reserved to a few tech enthusiasts.
The main benefit of digitalization is the improvement of the user experience
While it is true that digitalization in companies helps improve the user experience, this is not the main advantage when compared to other operational approaches.
The Mckinsey consulting firm measured the benefits that digital transformation offers companies. According to this firm, companies that start implementing this process manage to increase their turnover by 20% and reduce costs by 36%. As we can see, the greatest benefit for companies is a higher efficiency.
Only major corporations should concern themselves with digital transformation
Far from what some people think, digitalization has nothing to do with a company’s balance. It is related to a shift in culture and a new way of doing business.
Digitalization allows companies both large and small to streamline and simplify their processes. Two benefits that any type of organization can enjoy.
Digitalization is only worthwhile for B2C companies
This myth has become widespread because one of the advantages of digital transformation is putting the end customer at the core of the business. In this belief, it is common for some to claim that this process is not valid for B2B businesses.
However, this is not completely true, since digitalization also benefits the company by optimizing processes and increasing efficiency – two facts that are completely compatible with B2B and B2C businesses.
A company’s digital transformation can only involve a single path
This phrase is another very popular myth nowadays among skeptics of this concept. There is no single way to get the process going. Each company is different and must address the change differently.
In order to be successful in this path, it is recommended to seek the advice of expert companies who are specialized on the matter.
Digitalization is an expensive process
Digital transformation is not only within reach of major IBEX 35 companies. This shift is not necessarily linked to a higher expenditure.
The process does not have to be seen as an expense, but rather as a key investment with sights on attaining higher returns. In fact, according to data by the IDC Research consulting firm, 34% of small-caps who have allocated resources to digital transformation have experienced immediate benefits.
Digitalization is a process that can begin with a technological change, but that has a direct effect across the entire company with a significant change in the way in which it is organized and in its culture.
It is a market trend that offers increasing benefits to companies, and that everyone is talking about. Which is why the number of skeptics who disseminate unfounded myths is constantly growing.
Transformation is here to stay, since it is a shift in the paradigm of today’s world – and it is not only a process aimed at a few elite corporations, but at everyone. Any company can benefit from its advantages. They only need to find the way to dive into digitalization and start reaping the fruits that millions of companies around the world are already enjoying.
Nexus Integra is by your side in your path toward the transformation that your company needs.