Ask executives or business unit leaders what “digital transformation” means to their organization and the answers are almost like a Rorschach test.
It’s a broad term, one that can mean so many things to different stakeholders that the replies sometimes say more about those responding and their priorities than the phrase itself.
Thinking about industrial factories, digital transformation often means investing in IoT technology that connects all of their infrastructure and houses that data in one central location, leading to better visibility, decision-making and more effective resource management.
To automotive manufacturers, digital transformation might entail a comprehensive effort to digitalize their assembly process, incorporating virtual imaging into the design and production cycles.
For established airlines, digital transformation could refer to updating legacy processes for efficiency purposes, like revamping an existing supply chain to reduce its cost and rationalize its inventory.
These are just a few examples, of course. For most companies, particularly ones that are large and well-established, digital transformation is a broad business strategy that addresses challenges and creates new opportunity through the use of technology and has been an area of focus for the past couple of decades.
Decades might sound like a long time, but with more consideration, it makes sense; these initiatives are usually complex, multifaceted and important to the future of a business. Not to mention, the technology that enables digital transformation is constantly evolving and advancing. It’s no surprise that digital transformation doesn’t happen overnight.
So, what does that process look like?
In their recent whitepaper titled Digital Transformation: What’s New, What’s Next, And What It All Means, ABI Research sheds light on this topic, along with several others.
The digital transformation journey consists of four stages: awareness, education, alignment and execution. Below is a quick overview of these phases as well as key questions to answer at each juncture.
Awareness
- Goals: Identify opportunities, understand the emerging ecosystem.
- Questions to ask: What is the problem that needs to be solved? Who are the key stakeholders? What is the near-term priority?
Education
- Goals: Distill outside information, focus on what is important, communicate with stakeholders.
- Questions to ask: What data do you need and how/where do you get them? What does the ecosystem look like? How much of the solution or expertise do you have in-house versus via a partner?
Alignment
- Goals: Set priorities, determine business value, get stakeholder decision.
- Questions to ask: Who are the key stakeholders? What are the deployment options? What does a proof of concept look like? What are the Key Performance Indicators? What determines success?
Execution
- Goals: Proof of concept, scaled implementation
- Questions to ask: How does the solution scale? What are the best practices?
As is always the case, the specifics and timelines will vary from one organization to another. So too will the inputs, which make or break the model. Despite this variation, there is consensus that digital transformation brings substantial value to companies – helping them to achieve and sustain an edge over competition, reducing downtime and achieving operational efficiency otherwise not possible.
That said, the above framework is a very effective way of conceptualizing digital transformation. Sometimes, the most difficult part is figuring out where to start, and for anyone in that position, look no further.
In addition to mapping out the digital transformation journey, ABI’s whitepaper includes insight into key technologies that can be leveraged including IoT and Intelligent Systems, AI, Digital Twins and AR, SaaS and Servitization. Click here to download this analyst insight today.
