I had written about the many Digital enabled business models that are apt for traditional enterprises aspiring to be growing, sustainable and going concern in the age of digital disruption. I should have ideally focused on digital enabled business strategy next however, I have chosen to digress a bit to the subject of digital transformation in response to feedback received.
I had talked about Digitally enabled business models in my previous articles. Each one of them helps to achieve Digital transformation though a fully digital enabled and integrated business model (model 5) is the ultimate form of digital transformation.
Digital transformation is being used as a term for several aspects. Some say that it is the move from physical to digital. Whereas it is more apt to say that it is the changes associated with digital technology application and integration into all aspects of human life, machines and society. Enhancing customer experience, achieving operational excellence, improving the supply chain are all examples of business outcomes that could be achieved through Digital transformation. Many technologies play a part here. Cloud, SaaS, RPA, Analytics, AI, Mixed reality, Video analytics, IoT/OT, M2M, Drones, Robots are all examples of digital technologies. API and Data exchanges help to integrate these technologies and existing IT enterprise systems together. The internet, smartphones, tablets and marketplaces are all examples of how these are brought to life to help interact, visualise and decide. Some of these are about Digital enablement of IT to optimise IT costs and enable traditional IT to be fit for purpose and potentially, fit for future. A good number of these are about Digital enablement and integration of business to enable the company to achieve enhanced business outcomes through digital to be a growing, sustainable and going concern.
To bring clarity then, I would categorise Digital transformation into 5 tiers.
Tier 1 – Technology Transformation – This is a foundation level at which, you choose to migrate your existing IT to the Cloud to overcome existing IT Infrastructure technology capability and capacity constraints. You would also transform your workplace, your networks and your cybersecurity. Beyond systems performance improvements and enhanced security, no major business outcomes are directly achieved except for IT costs savings and digital enablement of IT.
Tier 2 – IT Applications Modernisation – Having chosen to adopt the cloud, you may then decide to modernise and/or transform your applications to be then able to exploit the capabilities and capacities of the cloud better. You may achieve some marginal business process improvements since your IT applications teams should be able to exploit newer capabilities to deliver releases faster, however, this cannot be realised without adopting agile and devsecops methodologies. Again, no major business outcomes can be expected except for the ability to slightly fast-track the applications development lifecycle. At this level or tier, it is still all about digital enablement of IT.
Tier 3 – Business process improvements and increasing Smartphone Apps – Using smart Software as a Service (SaaS) and Robotic Process Automation (RPA), you could bring faster execution or automated execution of business processes. You would have a digital store-front and could transact standardised components online. Some business transformation could be expected at this level or tier as you will be able to influence some customer experience improvements. Your business units would start participating in doing agile to be agile.
Tier 4 – Niche augmentation of the human and the machine – The real digital enablement of the business would start off at this tier or level. You may use data from your systems of records and systems of engagement to achieve basic analytics to derive purposeful business outcomes albeit in silos. You may also have improved analytics by using contextual data such as from social media, locations, weather amongst other things. You might have achieved personalised and purposeful digital marketing. You may have started to integrate your systems with your customers and/or with your suppliers in the supply chain to achieve integrated analytics. You may be using analytics to tease out up-sell and cross-sell or achieve operational efficiencies. You may have attached digital technologies to some devices for tracking or making use of the data analytics from data generated from these devices to achieve specific business outcomes. You may have explored data driven AI. You would be digitally enabling some of your business silos.
Tier 5 – Digital enabled and integrated business – At this level, you would have digital enabled products which have components talking to each other and interacting with components of the parent body. You would digital enabled customer interactions, engagement, contracting, services, billing and receipts. You would have digital enabled supply chain and procurement. You would have Digital enabled enterprise of finance, HR, training and other systems as well as the ability to manage risks, cybersecurity and compliance. To a reasonable level, you would have digital enabled corporate governance. You will also be part of an ecosystem of marketplaces. To achieve this vision of nirvana or highest tier, you would have had to embed all elements of digital as well as be ready to embrace emerging technologies of the future. You would have envisioned a digital enabled business model, business outcomes & business strategy with an underpinning digital strategy and digital transformation. All this will be supported by a robust IT strategy, IT architecture and the right hybrid of strategy & programme execution methods.
As you can see, digital transformation spans multiple tiers and levels. You can choose to go for it in bite-sized chunks, however, you would achieve your business purpose only when you have envisioned a digital enabled business model that is right for the future, plan for a digital enabled business strategy with an underlying digital strategy and digital transformation and strategy execution roadmap. Needless to say, there has to be a robust IT Strategy, Architecture, capability and capacity, and partners ecosystem to deliver.
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