Digital transformation is the cultural, organizational and operational change of an

organization, industry or ecosystem through a smart integration of digital technologies,

processes and competencies across all levels and functions in a staged and strategic way
(also see digital transformation strategy).

Digital transformation (also DX or DT) leverages technologies to create value and new
services for various stakeholders (customers in the broadest possible sense), innovate and
acquire the capabilities to rapidly adapt to changing circumstances.

While digital transformation is predominantly used in a business context, it also impacts other
organizations such as governments, public sector agencies and organizations which are
involved in tackling societal challenges such as pollution and aging populations by leveraging
one or more of these existing and emerging technologies.

Digital transformation is not just about disruption or technology. It’s about value, people,
optimization and the capability to rapidly adapt when such is needed through an intelligent
use of technologies and information.

In some countries, such as Japan, digital transformation even aims to impact all aspects of life
with the country’s Society 5.0 initiative (which has some similarities with the Industry 4.0
industrial transformation vision).

Digital transformation is the profound transformation of business and organizational

activities, processes, competencies and models to fully leverage the changes and
opportunities of a mix of digital technologies and their accelerating impact across society in a
strategic and prioritized way, with present and future shifts in mind.

The development of new competencies revolves around the capacities to be more agile,
people-oriented, innovative, customer-centric, streamlined, efficient and able to
induce/leverage opportunities to change the status quo and tap into big data and new,
increasingly unstructured data sources – and service-driven revenues, with the Internet
of Things as a vital enabler. Digital transformation efforts and strategies are often more
urgent and present in markets with a high degree of commoditization. 

Present and future shifts and changes, leading to the necessity of a faster deployment of a
digital transformation strategy, can be induced by several causes, often at the same time, on
the levels of customer behavior and expectations, new economic realities, societal shifts (e.g.
aging populations), ecosystem/industry disruption and (the accelerating adoption and
innovation regarding) emerging or existing digital technologies.

In practice, end-to-end customer experience optimization, operational flexibility and

innovation are key drivers and goals of digital transformation, along with the development of
new revenue sources and information-powered ecosystems of value, leading to business
model transformations and new forms of digital processes. However, before getting there it’s
key to solve internal challenges as well, among others on the level of legacy systems and
disconnects in processes, whereby internal goals are inevitable for the next steps.
Digital transformation is a journey with multiple connected intermediary goals, in the
end, striving towards ubiquitous optimization across processes, divisions and the
business ecosystem of a hyper-connected age where building the right bridges (between
front end and back office, data from ‘things’ and decisions, people, teams, technologies,
various players in ecosystems etc.) in function of that journey is key to succeed.

The human element is key in it on all levels: in the stages of transformation as such
(collaboration, ecosystems, skills, culture, empowerment etc.) and obviously in the goals of
digital transformation. Since people don’t want ‘digital’ for everything and do value human
and face-to-face interactions there will always be an ‘offline’ element, depending on the
context. Yet, also in non-digital interactions and transactions digital transformation plays a
role in the sense of empowering any customer-facing agent and worker.

A digital transformation strategy aims to create the capabilities of fully leveraging the
possibilities and opportunities of new technologies and their impact faster, better and in more
innovative way in the future. A digital transformation journey needs a staged approach with a
clear roadmap, involving a variety of stakeholders, beyond silos and internal/external
limitations. This roadmap takes into account that end goals will continue to move as digital
transformation de facto is an ongoing journey, as is change and digital innovation.

In this online guide we explore the essence of digital transformation as a vision to take
this journey, its evolutions and how it is present across various business processes and
industries.

Digital business transformation – a holistic approach

Taking a step back and holistically looking at and questioning the many ‘digital’ changes and
initiatives at several levels within various departments across the extended organization is
key for digital transformation success

Digital technologies – and the ways we use them in our personal lives, work and society
– have changed the face of business and will continue to do so. This has always been so
but the pace at which it is happening is accelerating and faster than the pace of
transformation in organizations.

Digital transformation is probably not the best term to describe the realities it covers. Some
prefer to use the term digital business transformation, which is more in line with the business
aspect. However, as an umbrella term, digital transformation is also used for changes in
meanings that are not about business in the strict sense but about evolutions and changes in,
for instance, government and society, regulations and economic conditions on top of the
challenges posed by so-called disruptive newcomers. It’s clear that changes/shifts in society
have an impact on organizations and can be highly disruptive as such when looking at
transformations from a holistic perspective. No company, industry, economic
actor/stakeholder and area of society stands on its own.

It is key to recognize the umbrella term dimension of digital transformation at all times.
While digital transformation maturity models can help in defining visions they are too
simplistic and/or general in practice.
Digital transformation – developing core capabilities across various business areas

Digital transformation covers a huge number of processes, interactions, transactions,

technological evolutions, changes, internal and external factors, industries, stakeholders and
so forth. So, when reading advice on digital transformation or reading reports and predictions
it’s essential to keep this in mind. Although there are common challenges, goals and traits in
organizations across the globe, there are also enormous differences per industry, region and
organization. What could make sense in one region, doesn’t have to make sense in another,
even if we just look at regulatory environments.

This guide is about mainly about digital business transformation. In other words: about
transformation in a context of digital business where there is a decentralizing shift of focus
towards the edges of the enterprise ecosystem. The customer in the broadest sense (external
and internal with the borders between both blurring) is a key dimension in this equation with
customer experience, worker satisfaction, stakeholder value/outcomes, partnerships and a
clear customer-centric approach as components.

Technological evolutions and technologies, ranging from cloud computing, big data,
advanced analytics, artificial intelligence, machine learning and mobile/mobility (a key game
changer) to the Internet of Things and more recent emerging technological realities are 1)
enablers of digital transformation and/or, 2) causes of digital transformation needs (among
others as they impact behavior of consumers or reshape entire industries, as in the digital
transformation of manufacturing), and/or 3) accelerators of innovation and transformation.
Yet, technology is only part of the equation as digital transformation is by definition holistic.

Digital transformation and hyper-connectedness: focus on the edges

Customer and customer experience, purpose and end goals, partners, stakeholders, the
last mile of processes and disruption often sit and occur at these edges and are key for
digital transformation. Sometimes digital transformation is even narrowed down to
customer experience alone but, strictly speaking, this a mistake, leaving out several
other aspects.

The end goals of the business, customers and stakeholders, however, do drive the agenda.
The central role of the organization is to connect the dots and overcome internal silos in all
areas in order to reach these different goals as interconnection is the norm. In other words:
although the focus shift towards the edges, the central capabilities are realized in order to
work faster and better for and at the edges. This happens for instance at organizational
(integrated, ecosystems), technological (an ‘as-a-service approach’, cloud and agility
enablers) and at a a cultural level.

The movement towards the edges also reflects in technologies and computing paradigms
such as edge computing and the decentralization of work and business models.

Think about how significant data management and analysis capacity is moving to the edge in
a datasphere where real-time demands increase while cloud computing grows in the core, the
decentralization of information management, the shifts in security towards the endpoints and
much more.
Still, it does not mean that strategic decisions move to the edges or that digital transformation
is only possibly in organizations with “new” organizational models. Enterprise-wide digital
transformation requires leadership, regardless of how it is organized and as long as the
holistic approach towards the goals with the edges in mind prevails over internal silos and de
facto gaps between reality and perception. In practice we see that pilot projects on the way to
a more holistic and enterprise-wide approach often happen bottom-up, ad hoc or in specific
departments. This is normal, typical in early stages but, if not followed through on a broader
level, a potential risk for long-term success. From the same holistic imperative it’s also
essential to note that security requires a holistic view and even a cyber resilience strategy as
data sits everywhere, attacks increase and technological environments become more complex.

Digital transformation areas

Digital transformation in the integrated and connected sense which it requires can,
among, others, touch upon the transformation of:

 Business activities/functions: marketing, operations, human resources,

administration, customer service, etc.
 Business processes: one or more connected operations, activities and sets to achieve a
specific business goal, whereby business process management, business process
optimization and business process automation come into the picture (with new
technologies such as robotic process automation). Business process optimization is
essential in digital transformation strategies and in most industries and cases is a mix
of customer-facing goals and internal goals today.
 Business models: how businesses function, from the go-to-market approach and
value proposition to the ways it seeks to make money and effectively transforms its
core business, tapping into novel revenue sources and approaches, sometimes even
dropping the traditional core business after a while.
 Business ecosystems: the networks of partners and stakeholders, as well as contextual
factors affecting the business such as regulatory or economic priorities and evolutions.
New ecosystems are built between companies with various background upon the
fabric of digital transformation, information, whereby data and actionable intelligence
become innovation assets.
 Business asset management: whereby the focus lies on traditional assets but,
increasingly, on less ‘tangible’ assets such as information and customers (enhancing
customer experience is a leading goal of many digital transformation “projects” and
information is the lifeblood of business, technological evolutions and of any human
relationship). Both customers and information need to be treated as real assets in all
perspectives.
 Organizational culture, whereby there must be a clear customer-centric, agile and
hyper-aware goal which is achieved by acquiring core competencies across the board
in areas such as digital maturity, leadership, knowledge worker silos and so forth that
enables to be more future-proof. Culture also overlaps with processes, business
activities, collaboration and the IT-side of digital transformation. In order to bring
applications faster to market changes are required. That’s the essence of DevOps:
development and operations. In order to make IT and OT work together in
businesses/processes/activities, change is required too (it’s not just the information
and operational technologies, it’s the processes, culture, collaboration). Etc.
  Ecosystem and partnership models, with among others a rise of co-opetive,
collaborative, co-creating and, last but not lost, entirely new business ecosystem
approaches, leading to new business models and revenue sources. Ecosystems will be
key in the as-a-service-economy and in achieving digital transformation success.
 Customer, worker and partner approaches. Digital transformation puts people and
strategy before technology. The changing behavior, expectations and needs of any
stakeholder are crucial. This is expressed in many change subprojects whereby
customer-centricity, user experience, worker empowerment, new workplace models,
changing channel partner dynamics etc. (can) all come in the picture. It’s important to
note that digital technologies never are the sole answer to tackle any of these human
aspects, from worker satisfaction to customer experience enhancement. People
involve, respect and empower other people in the first place, technology is an
additional enabler and part of the equation of choice and fundamental needs.

This list is not exhaustive and de facto the several mentioned aspects are connected and
overlap. We do look at some less business-related ‘digital transformation’ phenomena and at
so-called disruptions but the focus is on the business, which by definition means a holistic
digital transformation view whereby aspects such as customer experience, technological
evolutions and innovation with a clear purpose, instead of a buzzword, are crucial elements.

Various sources of disruption and how digital transformation can be a strategic answer in a
context of disruption and other needs or challenges

So, digital transformation is certainly not just about disruption or technology alone. It is even
not just about transforming for a digital age. If it were the latter, one has to realize that this
digital age exists since quite some time and is relatively vague.

Digital disruption – what is disruption anyway?

On top of being one of the most hyped terms of the last few years (as is digital
transformation as such), digital disruption is mainly used in the sense that an industry,
way of doing business or ecosystem (e.g. societal) is significantly challenged by existing
(mostly tech) companies, newcomers or incumbents who have mastered digital business
skillsets and came up with solutions, business models and approaches that cause a significant
shift in customer behavior and market context, requiring existing players (which can include
‘digital businesses’) to change their strategies as well.

Disruption in the end is a shift in power in relationships (Charlene Li)

However, disruption is certainly not only about those initiatives by newcomers or

incumbents with disruptive approaches. Disruption in the end is about people,
customers.

Or as Charlene Li puts it: disruption in the end is a shift in power in relationships. Disruption,
as a human phenomenon, is caused by shifts in, among others, the way people use
technologies and about changes in their behavior and expectations. These changes can be
induced by new technologies and how they are adopted or leveraged by disruptive
newcomers. However, the change can also have a broader context that has nothing to do with
technologies. Is that still ‘digital disruption’? No. Yet, in some cases digital technologies
could be leveraged to address those changes in behavior or expectations/needs and so forth.
As Sameer Patel points out, disruption often happens in the last mile of customer
experience. We would say that, in general, disruption often happens at the various edges
of the business; those same edges we just mentioned: the last mile, the customer, the
broader ecosystem, etc. In the scope of the broader ecosystem it’s essential to look at the
disruptive effect changing economic realities and regulations, for example, can have, again
emphasizing the need to put digital transformation advice in perspective.

The fact that digital transformation often focuses on the edges as we mentioned seems
obvious when you look at the disruptions and growing expectations at the edges (customer
expectations, the knowledge worker at the end of a business process, etc.) who then drive
digital transformation.

We always say that technologies are never disruptive. But, to be honest, it’s a bit to
challenge people.

We prefer to say that it’s the ways that technologies are adopted and leveraged which can be
disruptive, as mentioned. However, obviously, if we drop that tiny remark that as such
technologies are not disruptive, it’s clear that some technologies have led to more disruption
than others. We’ve mentioned some. Social was a big game changer. Mobile, which leads to
the capacity of ‘being mobile’ for sure is one too. Cloud. Big data analytics. In fact, all so-
called third platform technologies and their accelerators, with a key role for information and
artificial intelligence.

In recent years the evolution towards an Internet of Services and, yes, an Internet of
Transformation what the Internet of Things or IoT in the end will be, started playing a
crucial role in digital transformation.

Who owns the audience, owns the last mile. Closest to customer, closest to disruption
(Sameer Patel)

The Internet of Things or IoT, whereby we move to the next stage of the Internet is still in its
early days however. As such, the essence of the Internet of Things as yet another umbrella
term for the connection of devices with embedded or attached connectivity and data sensing,
sending, analysis and/or reception possibilities using Internet technology is meaningless. Yet,
at the same time it will be the glue for a majority of transformational evolutions. In consumer
applications the Internet of Things so far has offered little tangible value or true innovation.
The main value is seen in the Industrial Internet of Things, whereby industrial markets such
as manufacturing and logistics are becoming leaders in transformation. The latter is also due
to technologies which are starting to show the tip of their disruptive potential, including
additive manufacturing and advanced robotics.

Is there a stage after that? There sure is. For now, we’re going fully hybrid in all senses,
also in the integration of digital technologies within our human selves, what the 4th
platform will be. Scary for many and not for the next few years for sure. But we’ll get
there.

If you ask us what the biggest disruptive technologies will be next (keeping into account that
detail we mentioned): it’s the Internet of Things, along with cognitive/AI, Big Data and
systems of intelligence. In the meantime the hybrid stage is already here, for instance in an
industrial context where the cyber-physical system and, thus again, (industrial) IoT is a key
component of Industry 4.0 and the Industrial Internet. Yet at all times the human value and
element remains key.

Digital transformation involves managing the existing business and building for the future at
the same time, something like changing the engine of the plane while in flight (Ashutosh
Bisht, IDC)

Causes of disruption and transformation

“Disruptions” and digital (business) transformation can be caused by numerous factors:

 Technological innovations (technology-induced), which are more impactful than

ever before. However, again, it’s not the technology that drives the disruption or
transformation. It’s how it is used and adopted by customers, partners, competitors
and various stakeholders. Technologies with clear disruption potential include IoT,
artificial intelligence, edge computing, virtual and augmented reality and blockchain.
However, the most disruptive potential occurs when they get combined and enable
new applications as we see in the convergence of AI, IoT and big data analytics. In
industrial transformation the convergence of IT and OT is also a game changer.
 Customer behavior and demands. This so-called customer-induced transformation
and disruption is not necessarily related to technology. Technology often enables or,
as just mentioned, causes it, when adopted and turned into business challenges. An
example of a force that drives digital transformation and is not caused by technology
but merely strengthened by it in combination with other factors: the demand of
customers for ease of use and simplicity in dealing with businesses is far older than
today. It goes back to times when even the Internet didn’t exist. In that sense, digital
transformation can be simply catching up too because businesses don’t have another
option anymore (it’s not as if they didn’t know the importance of making interactions
and support for customers easy and frictionless decades ago). Customer behavior and
needs can also be impacted by disruptions on a societal level.
 Innovation- and invention-induced. Entirely novel approaches to human and
business challenges, as well as innovations and inventions that create a new reality,
whether it’s in science, business, technology or even a non-technological context of
true innovation can be disruptive. The invention of medicines that change healthcare
and society (as has happened several times in the past), the printing press, the train,
what can be next? Your best bet is probably in life sciences and the application of
technology within the human body and mind.
 Ecosystem-induced. Organizations are part of broader ecosystems: business
ecosystems and the social and natural ecosystems in which they – and we – live.
Economical changes, demands from partners who want you to adapt, evolutions
towards collaborations in transformational business ecosystems, regulatory changes
(consider the transformational impact of the General Data Protection Regulation or
GDPR for example), geo-political changes, societal shifts, unexpected events such as
natural disasters or even a pandemic as the impact of COVID on digital
transformation and on society overall showed, they all can impact and drive the need
for digital transformation as ample research on the acceleration of digital
transformation in the new normal showed.
And this ecosystem aspect brings us again to this essential aspect of digital
transformation: the interdependency and interconnectedness of everything – and
according need to think holistically, across industries and with present and future shifts
in mind as mentioned before.

Everything overlaps and is connected; from disruption, business processes and models to
business activities and each single activity of the organization and the broader ecosystem in
which it operates. It’s the butterfly effect in action. Think about how virtually all business
processes de facto are linked, the interconnectedness of business activities from the customer
perspective, the way information runs across all digital transformations, the impact events can
have on an economy, and much more. Scenario planning is important here.

Why a holistic digital transformation picture matters

So, while we just split up some aspects of digital (business) transformation, it’s of the
utmost importance to get that holistic picture.

Businesses have always been changing and innovating, technologies always came with
challenges and opportunities, regulations and ecosystems have always evolved. That’s
nothing new.

It’s in the degree of interconnectedness and of various accelerations, which require profound
enterprise-wide change, that digital (business) transformation is to be seen as more than a
buzzword but as a challenge, force and most of all opportunity for organizations that will
enable them to achieve the core business competencies they need to succeed in rapidly
changing environments where speed of change touches upon a myriad of phenomena, ranging
from the acceleration of technological innovation and disruptions challenging the status quo
of common business models to the need for speed in dealing with changing customer and
partner demand or unexpected events.

Speaking the same language

To make sure we speak the same language it’s important to emphasize that digital
transformation is not just about:

 Digital marketing, even if that’s an important part of the business activities and if it’s
the context in which digital transformation is often used.
 Digital customer behavior, although it plays a role and customers are increasingly
‘digital and mobile‘.
 Technological disruptions because the disruptions are always about customers,
workers, markets, competitors and stakeholders, even if related to technological
evolutions and knowing that ’emerging’ technologies indeed can have a ‘disruptive’
effect.
 The transformation of paper into digital information as originally meant nor the
digitization of information (flows) and business processes, which is simply a
condition sine quod non.

Finally, the reason why we would prefer to speak about accelerated business transformation
or, if needed, digital business transformation, is that it’s just a matter of time before no one
makes a distinction between digital and physical or offline and online. Customers, for
instance, don’t think in these terms at all, nor in the terms of channels.

Digital transformation and the usual suspects – beware of

hype
Digital transformation is not just about technology but certainly also not just about
companies in technological industries or the tech startup scene. This is an often made
mistake that can be partially explained because such “usual suspects” (Uber is probably
the most mentioned – and most controversial – example) indeed are “disruptively” using
digital technologies to alter existing models and markets and – at least as important –
get a lot of attention.

However, it’s a mistake to just look at all these tech companies out there that we keep
showing as examples of digital transformation. While some have indeed been ‘disruptive’ in
the sense of forcing bigger players to adapt or die and we can learn from these start-ups and
the technology success stories everyone talks about, it’s easy to overestimate them, certainly
when comparing with the organizations that have been successful at digital transformation in
‘less sexy’ but sometimes far more challenging and interesting areas.

The attention given by media and tech fans to disruptors such as Uber and the other usual
suspects is not without danger and hype. Digital transformation leaders can be found in
virtually all industries and often are not among these darlings of those fascinated by digital
technologies and companies as such. Digital transformation is industry-agnostic and starts
with the business goals, challenges, customers and context of the organization.

Incumbents are transforming too, albeit not all and at different speeds, and in several
industries such as finance, there are transforming partnerships between incumbents and
‘disruptive’ newcomers. Last but not least, these so-called disruptive companies can be and
will be disrupted as well, by any potential evolution. Their success is not guaranteed on a
longer term and digital pure players sooner or later meet the human need for human
interaction as well.

Digital transformation happens everywhere

So, digital transformation hits each industry. But it can also affect all activities,
divisions, functions and processes of the organization as it can impact the very business
model as such.

CapGemini Consulting was one of the first to come up with the concept of digital
transformation and a digital transformation framework as you can see below. The company
did so in collaboration with the ‘MIT Center for Digital Business’ during a three-year study
which defined an effective digital transformation program as one that looked at the what and
the how.

Digital transformation framework by Capgemini Consulting and the MIT center for digital
business – larger image here
The McKinsey chart below shows just aspects where digital transformation can play:

 The (digital) customer experience (as said, de facto a key element with many digital
transformations being a mix of customer experience optimization and process
improvement – and cost savings).
 Product and service innovation where, for instance, co-creation models can be used.
 Distribution, marketing and sales: another usual suspect and in practice an area (along
with customer service) that is often one of the earliest areas undergoing digital
transformations.
 Digital fulfillment, risk optimization, enhanced corporate control, etc.

Others we can add include:

 Intelligent information management (with information, data and the processes they
feed being key and a focus on activation).
 Customer service, customer experience management and contact centers, customer
relationship management.
 Work, human resources, new ways of collaborating, workforce engagement and
enablement (agile working, social collaboration, enterprise collaboration, unified
communications,…).
 Learning and education.
 Procurement, supply chain management (with the digital supply chain) and supplier
relationships.
 Etc.

It’s important to remind that in a digital transformation (and, for that matter digital
business) context, all these aspects, functions, processes, etc. are interconnected and silos
have less (or no) place, not from a technological perspective but most of all also not
from a process and people perspective.

Digital transformation – digital can reshape every aspect of the modern enterprise – source
McKinsey

Digital transformation myths and realities

Digital transformation is on the radar of many organizations. In order to reap similar
benefits, it’s important to focus on real business and customer challenges, have a clear –
often staged – approach, prioritize and involve all stakeholders in any digital
transformation process.

The graphic below from Capgemini (check out the eBook from Capgemini: “The Digital
Advantage:How digital leaders outperform their peers in every industry“), dispels some
myths and offers some realities.

Four digital transformation realities we want to emphasize:

1. Business/IT relationship is key (closing the gap between both, focusing on the same
goals and NOT overlooking the role of IT).
 2. There is a common DNA among digital leaders and the path to digital
transformation shows common traits (even if context matters).
3. As said, each industry is impacted, including your industry. Customers,
employees, partners, nor competitors or new, disruptive players, will wait for business
to catch up, regardless of industry.
4. Digital transformation is led from the top (or at least requires firm buy-in from the
top – and all stakeholders if it wants to succeed in an enterprise-wide way, de facto it
also happens from the bottom up and from within specific projects). Often it’s the
CEO, the Chief Digital Officer or the CIO but, depending on whom you ask the CMO
also gets mentioned now and then.

Digital transformation and the CEO in multinationals

Myths and realities of digital transformation – source Capgemini

The evolution of digital transformation: towards a DX

economy
With strong roots in the accelerating adoption of 3rd Platform technology and the
transformative effects of this adoption by organizations, workers, consumers or let’s say
people, the role of digital transformation is evolving.

With a clear focus on (digital) customer experience and overall stakeholder experience, while
optimizing costs, innovating and creating competitive differentiation, digital transformation is
set to become the cornerstone of a digital transformation or DX economy in the words of
IDC.

Adding more technologies to the 3rd Platform and, more importantly, witnessing an added
layer to the core technologies and innovation accelerators of innovation and transformation,
IDC sees a future whereby this layer where the optimization, transformation and innovation
as such accelerates.

And this, in turn, will lead to a DX economy. But make no mistake about it: despite all the
technology it’s still about (digital) customer experience and stakeholder experiences or the
human dimension, empowered by processes, information and the 3rd Platform evolutions in
the first place. Again, digital business transformation is not just a technology or IT matter.

Moving from transformational technology to transformation economy in 5

stages

Taking into account the just mentioned caveat about technology and IT, of course there
is a clear link with digital technologies. So let’s take a look at the evolution towards this
so-called digital transformation economy.

Stage 1: the 3rd Platform and digital business

In 2007 IDC introduced the 3rd Platform, back then consisting of four
technological/business pillars: cloud, big data/analytics, social (business) and mobility.
Gartner called it the ‘Nexus of Forces’ and, as others did, talked about SMAC (social,
mobile, analytics and cloud). Regardless of the name: what mattered was that these
technologies and, more importantly, their adoption by consumers, workers and businesses,
their behavior-changing impact and the ways they were leveraged to achieve various goals
were dramatically altering the business reality – a digital business reality.

Stage 2: the innovation accelerators of the third platform

The 3rd Platform, which is preceded by respectively the mainframe and client-server
model era/platform, was joined by various other technologies which IDC called
innovation accelerators.

These include robotics, natural interfaces, 3D Printing, the Internet of Things, cognitive
systems and next generation security. So, we are still on a predominantly technological level
here but with a clearer focus on business and customer innovation (on top of the traditional
goals of optimization and so forth).

Stage 3: from digital transformation to innovation stage

What we see now, at least at companies that have deployed initiatives with a clear
maturity in various areas and a longer term vision, is that innovation (regarding new
business models, ways of engaging customers, building ecosystems of new revenue etc.)
becomes key as the foundations, goals, strategy, culture and vision to do so are in place.

With the digital customer experience, innovation, competition, differentiation, automation,

cost reduction, optimization, speed and experiences of stakeholders as business drivers, the
mentioned technologies and the way they are used lead to that famous next wave or
additional layer of innovation and of digital transformation. This in turn, IDC says, led to an
innovation stage and information is essential to enable it. Digital transformation requires IT
and information excellence in an end-to-end approach.

Stage 4: the acceleration of innovation and transformation

This stage of innovation and further challenges brought by disruptive business models
will accelerate in the next years.

In other words: what we (will) see is that the pace of innovation and transformation is
changing and resulting in a stage whereby the disruptive impact of digital transformation is
about to be felt in every industry as enterprises flip the switch and massively scale up their
digital transformation initiatives as IDC’s Frank Gens puts it, to secure a leadership role in
the ‘digital industrial revolution’.

Stage 5: digital transformation at the core of a new economy

Finally, it’s this ‘digital industrial revolution’, which IDC dubbed the digital
transformation economy or DX economy, that will put digital transformation at the
center of growth and innovation strategies.

They will rapidly impact all industries even more and faster than we’ve seen before. And the
innovation accelerators such as the Internet of Things, cognitive (artificial intelligence) and
the likes will be key in this evolution, as are the ‘traditional’ backbones of the 3rd Platform
(cloud, big data/analytics, mobile etc.)

Towards a digital transformation economy – the technology and third platfom perspective –
read more in detail here

The digital transformation economy: DX moves to the core of business

Digital – and technologies in general – always had a deep impact on business and
society. As mentioned, one of the changes that we see in recent years is the speed at
which it’s all happening. The technological evolutions and changes they bring upon us
are accelerating fast, displaying exponential growth – and consequences.

This speed is contextual and felt differently across various industries. It goes hand in hand
with the role ‘new technologies’ can play in the specific industry, the market conditions, the
types of customers and stakeholders (and go-to-market approach) and so much more. Still,
speed is crucial in more than one way. There can always be an organization in any industry
that sees and grasps the opportunities competitors don’t. And in some parts and functions of
the business a lack of speed just isn’t an option, regardless of industry.

Finally, exponential growth or speed of change in any area whatsoever (customer behavior,
regulatory frameworks, technologies etc.) can happen at the most unexpected moments.

Creating the conditions to be ready for rapid evolutions and ideally pro-dapt and take
the lead, changing the status quo, is part of business transformation.

Acceleration of innovation and transformation

While a range of technologies have accelerated disruption, business innovation and

changes in human behavior, the exponential growth and pace of change is just a
fraction of what is yet to come.

Although digital business transformation is not about digital technologies as such, it is clear
that the adoption and opportunities of technologies under the umbrellas of social business,
cloud, mobility, Big Data (analytics), cognitive computing and the Internet of Things and
more will always speed up changes across society.

However, the real acceleration happens when the acceleration of innovation and
transformation as such goes exponential. And that is what analysts mean when they talk
about the digital transformation economy or DX economy: not just acceleration of disruption
and changes but acceleration of the actual digital transformations and innovations leading
organizations will go through, making the gap with laggards even bigger.

More about the DX economy

Pro-sponsiveness and pro-daptation: focus on future and

outcomes
Beyond a dimension of responsiveness/agility (and adaptation and often catching up with
customers and ecosystems that change faster than organizations can) in a rapidly evolving
context (remember: not linear but exponential), which de facto requires a higher degree
of agility and connectedness, there is also a “pro-sponsive” element.

A dimension of being the disrupter instead of disrupted. Of forward-thinking change,

anticipation, innovation and simply thinking and working out of the box of the usual, the past
and the present. The outcomes of such “pro-sponsive” approaches are what matters most,
which brings us to the next point.

To achieve them, however, many conditions need to be fulfilled in an often staged approach
and always involving people, processes and technologies. Again three usual suspects indeed.

Digital transformation, digitization and essential elements

Historically, digital transformation was also used in another sense: namely the
digitization of paper into digital formats into processes.

These digitization dimensions of turning paper into digital information into processes in a
more ad hoc way are obviously necessary in digital transformation in the broad sense.

Digital transformation projects requires several elements to succeed and digitization is a part
of it. Among the many elements, we mention four that are related with technology, people
and/or processes.

Change management.

As it is the case in virtually all impactful changes that affect multiple stakeholders,
divisions, processes and technologies (including implementing an enterprise-wide
marketing ROI approach, a content marketing strategy or any integrated marketing
approach with CRM, marketing automation, etc. to mention three marketing-related
ones), there is not only an opportunity for change and looking at what can be done
better and what should be (re)connected but also a need for change management.

Knowing the role of data and analytics in digital transformation, there are even more
opportunities for change and needs for change management. This is not new: when web
analytics became popular, for instance, their implementation and the connection between
different data and analytics “silos” in the customer/marketing space, often showed clear
needs for digital transformation in many customer-facing and customer-oriented operations,
long before the term digital transformation became known. Grasp those opportunities and
tackle the challenges. People and processes.

If things change too fast for people or we are not taking into account the individuals that are
touched, as well as their concerns, this can be a recipe for failure and at broader scale even
resistance.

However, change management first and foremost obviously is about the human dimension:
internal customers, stakeholders, the broader ecosystem within which organizations reside.
No organization, business, governent or NGO, can realize a profound digital transformation
without putting people first and having people on board. If things change too fast for people
or we are not taking into account the individuals that are touched, as well as their concerns,
this can be a recipe for failure and at broader scale even resistance.

Intent and priorities.

The world is full of roadmaps for virtually any digital transformation project. However,
roadmaps are what they are and the intent, priorities, pain points and actual needs for
the individual business and the people in its ecosystem, within a broader reality, matters
more.

There is never a one size fits all solution and intent, outcomes and priorities steer the digital
transformation efforts, on top of changing parameters in the ecosystem. Priorities also means
prioritization, often including looking at the low hanging fruit but always with the next steps
and ultimate goals in mind, knowing these goals – and the context within which they were set
– will evolve.

Digitization

We mentioned it before but it’s important. It’s a mistake to think that organizations are
really ready for profound digital transformation in a broad way.

There are still far too many gaps in regards to the digitization (and automation) of existing
processes and the digitization of data from paper carriers. Worse: what is sometimes called
digital transformation is sometimes “just” digitization (turning paper into electronic
information into processes). You need digitization in order to optimize in a digital
transformation context but digitization does not equal digital transformation. What matters is
the combination, strategic and prioritized interconnecting and the actions you take to achieve
business goals through digitization and combining data.

Furthermore, there is an even bigger gap between back-office processes and the front end. An
example of this phenomenon can be seen in the financial industry, where there are extremely
strong disconnects between the back-office and front end. There are lots and lots of
digitization efforts that still need to be done in many areas of business and society and we all
know and feel it, whether it’s in our daily experiences as “business people” or in the often
totally unnecessary administrative tasks in regards to our governement-related or finance-
related ‘duties’ and interactions with business where we’re forced to use paper, the phone or
channels we really don’t want to use anymore.

Silos, responsibility and skills

Digital transformation – just as social business, digital business and any form of
customer-centric marketing and business processes, requires the ability to work across
silos. In many cases, digital transformation even is about totally reworking
organizational structures, which can be as much about collaborative methods, Centers
of Excellence as removing specific silos.

The debate about the responsibility over digital transformation as a whole and within specific
functions and processes in that sense of genuine transformation is archaic, even if it needs to
be held as Chief Digital Officers, CIOs and other CxOs all play a role. Here again, there is no
ideal solution regarding responsibility: context does matter.

Marketing should learn from IT and IT from marketing. Sales from customer service, the
contact center from sales, the list goes on. A digital-savvy culture is not the goal of digital
transformation but today’s CxO needs to be not only digital-savvy but also know 1) what
others are doing and 2) their experiences, methods and skillsets. As for the responsibility
debates: here as well, multiple options exist as there is ‘no one size fits all’.

Digital transformation technology and IT trends

Digital transformation: getting strategic

Enterprise-wide digital transformation in the true sense as we defined it previously,
requires a strategic approach.

Knowing the many components, technologies, processes, people, goals and integrations that
are required, it seems virtually impossible to design a digital transformation strategy. Yet, it
isn’t.

Getting the right answers requires the right questions

It’s probably one of the reasons why there are so many digital transformation maturity
models and generic frameworks.

Still, as each business is different how do you start with a digital transformation strategy that
works for your future, your goals, your potential disruptions, your workers, your market and
your customers?

Complex challenges and complex questions can rarely be answered by easy answers and
frameworks. However, in practice we see that easy answers are also lacking because easy
questions are not asked to begin with.

It is a recurring theme we see in many areas of business and technology. In digital

transformation, in Internet of Things projects, in marketing, you name it: when technology is
involved we seem to forget the basics.

Digital maturity benchmarks and digital transformation strategy

Digital maturity frameworks and benchmarks do have value. They indicate that digital
transformation is a journey towards acquiring a set of capabilities and changing a range of
processes, functions, models and more with the purpose to (be able to) leverage the changes
and opportunities of digital technologies and their impact across society in a strategic and
prioritized way, as we defined digital transformation earlier.

This comes with several consequences:

Digital transformation is not just about a specific project, process or optimization
exercise. It’s a holistic given and it doesn’t happen overnight. There are many components
and intermediate goals. It happens in incremental steps, hence the digital maturity views.

The various stages, steps, projects and so on in the context of digital transformation
have one or more goals as such, yet at the same time fit within the broader purpose
which we just established by referring to (part of) our definition. In other words: you have a
roadmap and an end goal in mind.

Although it might sound like a contradictio in terminis, the end goal of digital
transformation changes, making it a journey. New technologies will offer new
opportunities and challenges, as will changing market conditions, competitive landscapes and
so forth. While digital transformation has a goal of preparing us for those, at the same time
that goal as such is subject to change.

Change is a constant. From a digital transformation strategy perspective this means that
uncertainties, risks and changes are factored into each incremental step and the broader
objectives but it also means that a digital transformation strategy comes with agile
possibilities to change course, thanks to intermediate checks and balances and a ‘hyperaware’
ability of continuous improvement or change (both are not the same).

Digital transformation strategy – the what why and who

The first step of a digital transformation strategy

Those previously mentioned basics are about the first steps in defining and deploying a
digital transformation strategy. And, as always they are about the what, why and how.

Yet, we need to make a distinction here. As you know people look at digital transformation in
various ways.

 Some see it as one or more projects in the context of digitization (which it is not) and
of digitalization (which it can be). In these cases, the what, why and how can be filled
in very differently, depending on the nature and scope of the project(s).
 Others, including us, see digital transformation as this all-encompassing
transformation as we defined it. In this case the goal (the what, supported by the why)
is a digital transformation capacity as such, at the very core of the business, whereby
digital transformation becomes the condition and enabler of the capacity to fully
leverage changes and opportunities of (digital) technologies and their impact.

However, as mentioned this doesn’t happen overnight and requires a series of incremental
steps. And here the goal or ‘the what, why and how’ becomes a mix of intermediate goals and
broader objectives within which they gain more significance.

More about digital transformation strategy

Digital transformation and the customer experience

In most digital transformation projects the customer experience and the user experience
(remember both are not the same) take center stage. The customer experience, however,
is a catalyst and driver of many digital transformation efforts.

The customer experience doesn’t belong to just one department and a transformational
approach by definition includes several stakeholders, including the customers.

While technologies have affected customer behavior and expectations on one hand and
enable transformations on the other, the focus is on people and processes. To truly enhance
the customer experience in an enterprise-wide and holistic way, several elements, divisions,
caveats, processes and technologies need to be taken into account.

However, the people dimension is probably – and obviously – the most crucial of all in the
customer and customer experience context. The customer experience is probably also one of
the key areas where business meets IT in a transformational perspective.

Digital transformation and the customer experience

Digital transformation and marketing

Just as the customer experience is a catalyst in many digital transformation projects, it
also has become pivotal in marketing, service and customer-facing processes.

Marketing is one of many areas where digital transformations take place (even leading to
confusions whereby digital marketing transformation is used interchangeably with digital
transformation).

Digital transformation, the customer experience and marketing

The digital customer journey, data and data-driven marketing, social CRM, the contact center
and – again – the customer experience are important elements in this regard. The digital
marketing transformation imperative is driven by changing customer behavior and
expectations before anything else. With the end of the sales funnel and ongoing
fragmentation in an increasingly digital customer reality whereby control has shifted in mind,
marketing has no choice than to transform and to work closer together with other divisions
such as IT and customer service, to name just two. This also has consequences for the
marketing function and changing role of the CMO.

Last but not least, the need for digital marketing transformation goes hand in hand with the
connected optimization goals.

Digital marketing transformation – the customer leads the dance

Digital transformation and hyper-connected optimization

Regardless of the technological evolutions and the acceleration and impact of their
adoption, a core reason to ‘digitally’ transform is the urgent need to have a very holistic
and connected approach towards (customer-centric) optimization.
For all too long optimization efforts, whether it’s in business processes, marketing
optimization of customer service level improvement, has occurred in disconnected and siloed
ways.

In an increasingly connected and complex customer, worker, partner and other stakeholder
environment, this isn’t possible anymore.

Holistic optimization looks at the broader picture of improvement, not just by seeing how
everything in an optimization ‘chain’ is de facto connected but by actually setting in motion
the necessary transformations and innovations to optimize in a far broader and interconnected
way than ever before: beyond functions, divisions, silos and anything making an end-to-end
optimization and experience flow impossible.

This focus on optimization through digital transformation is directly linked with the goals of
(customer) experience enhancement and stakeholder engagement. It goes hand in hand with
process optimization, often automation and cost efficiencies.

Digital transformation and holistic optimization

Digital transformation: when hyper-connected optimization becomes a must

Digital transformation and the key role of data and

information
Even if information is at the very center of digital transformation, the link between
information management and digital transformation is not made often enough. If we
look at other elements at the center of digital transformation this is a pity.

After all, whatever the form of optimization, communication, collaboration, interaction,

experiences, innovation and so on: information (or content or data) is a key success factor to
make it happen (on top of human factors, leadership, processes, organization etc. which also
require information).

Information chaos and information as an enabler

There are four so-called information chaos challenges according to John Mancini of
AIIM (association of information management professionals):

1. How do we optimize business processes?

2. How do we get any business insight out of all the information we collect?
3. How do we use information to better engage customers, employees and partners (also
think omni-experiences)?
4. How do we manage the risk of growing volumes and complexity of content?

Turning these ‘information chaos’ problems into solutions is a lot what the link between
digital transformation and information management is about.

4 core information chaos problems

But there is more. Information management plays a role as a digital transformation
enabler and in each step towards achieving digital transformation goals such as
increased customer-centricity, the enablement of effective knowledge workers and
operational excellence.

Information and information management are also key in all three parts of the well-known 1)
people, 2) process and 3) technology/tools triangle. To learn more click the link below.

Digital transformation and information management: enabling change

Digital transformation and intelligent information

In a digital transformation context, ‘managing information’ and data is crucial but it’s
not enough. In today’s and tomorrow’s information- and data-driven business, insights,
intelligence and actions matter most: the outcomes.

That’s where context, semantics, artificial intelligence and activation come in. With the
Internet of Things and Web 3.0 upon us the intelligent dimension becomes more important in
regards to making sense of unstructured information, automation and connected devices and
putting information at work. It’s why we talk about ‘intelligent information activation’.

As we shift towards information-based organizations and information has become part of the
capital and business assets of the enterprise, an intelligent information management approach
enters the boardroom.

At the same time the activities around and value of data are looked upon from the
perspective of engagement, outcomes and the last mile.

Making data actionable, introducing devices (IoT) in an increasingly complex and growing
data landscape, the steep growth of unstructured data, deriving meaning and insights from
information and leveraging it at the right time and right moment for the right reasons and
actions are all critical.

From information management to intelligent infomation activation

This isn’t just about ‘managing’ information in the traditional sense anymore. It’s also not
just about connecting systems and data nor even connecting through information. With the
advent of the Internet of Things, the need to ensure data quality and the increasing need to
use and unlock it faster, despite the sheer volume, adds several elements to the information
and transformation equation.

Among them are:

 intelligence (as in artificial intelligence as the only way to add and extract meaning
from ever more data and as the only way to use information and data in an IoT and
inter-device context),
 speed (with speed being a customer experience and even competitive benefit),
 a holistic security approach (with information and data as assets),
  the need to digitize and capture paper-based data (digital transformation requires
digitization and thus scanning) closer to the source, owner and process to go paperless
(paper slows down digital transformation),
 and an increasing focus on accuracy, quality and outcomes.

What this all means and how it will evolve? On top of the existence of systems of records and
systems of engagement – which are both needed – we are moving to systems of intelligence
and intelligent automation and optimization, ecosystems of code, algorithms, cognitive
computing (understanding and beyond) and fast/smart data as ways to succeed with digital
transformation and, vice versa, information-based challenges as transformational drivers. To
learn more click the link below.

Digital transformation success: the role and evolution of intelligent information

Digital transformation across various industries

Each business is different. Yet, many of the lessons we learn from leading companies show
that digital transformation shows very similar aspects across industries. Still, it’s also
important to look at your business and of course your industry.

Digital transformation in the retail industry

Retail is one of the most rapidly changing verticals across the world and is often at the
forefront of technological advancement to keep pace with the evolving needs of a 24/7
customer base.

That’s the clear digital transformation message from OVUM regarding the changing retail
customer. We can’t but agree and would even add that digital transformation is omnipresent
in all aspects of the retail industry. From data and information optimization, supply chain
digitalization, delivery and back-office processes to the front end where customer
expectations are necessitating transformations and enhancements regarding a seamless
channel-agnostic customer experience.

Let there be no mistake: the shop is still very important in retail but here as well consumers
have come to expect innovative experiences which bridge the physical in-store and digital
journey, which doesn’t exist in the eyes of the consumer anyway.

On top of traditional 3rd platform technologies such as the cloud and big data, there is a
myriad of additional technologies that is changing the face of retail completely. Analysts see
a growing role of the Internet of Things in retail, mainly in digital signage and cross-channel
scenarios. Obviously, these use cases are closely related with the mentioned technologies.
Also expect a continuously growing presence of information-driven in-store changes that
combine several technologies but mainly look at the essential things retail customers want
such as empowered employees who have the tools to provide fast and correct information on
products. Winning retailers focus on these essential customer expectations and ways to
transform how they are offered, in combination with some more ‘futuristic’ looking
innovations as we see them pop up in concept stores but of which several will prove not to be
valuable enough.
Digital transformation in retail

Digital transformation in manufacturing

Under umbrella terms such as Industry 4.0 (a typical European term) or Industrial
Internet (the third industrial revolution through the eyes of the Industrial Internet
Consortium), the digital transformation of manufacturing is progressing at different
speeds with the integration/convergence of IT and OT as key to improve efficiency and
speed.

While leaders in manufacturing transform to optimize operations, enhance customer-

centricity, tackle risk, innovate, increase revenues and, most of all, tap into entirely new
revenue streams with new business models, revolving around information and services,
laggards continue to focus on just the optimization aspect.

This is an essential mistake as without a more holistic digital transformation

perspective, leading manufacturers are poised to become disrupters.

Still, things are changing and the main challenges to move towards the Industry 4.0 or
Industrial Internet approach, are becoming clearer (the difference between the view of a
fourth industrial revolution as in Industry 4.0 and a third one as in the Industrial Internet is
really just a matter of details).

On top of challenges and opportunities regarding skill gaps, connected supply chains, real-
time economy needs and uncertainties, caused by changing macro-economic and geo-
political changes, ample challenges/opportunities exist to move beyond the mere optimization
dimension and truly transform at the core with the customer and data taking center stage.

The rather slow enterprise-wide digital transformation in manufacturing is compensated by

the industry’s leading place in one key transformative aspect of the Industry 4.0 cyber-
physical, data-intensive and innovative services systems and technologies stack: the
Industrial Internet of Things. Two other important notions in the digital transformation of
manufacturing: digital twins and the mentioned cyber-physical systems approach.

The manufacturing industry by far leads in the Internet of Things space and more and more
companies leverage the huge opportunities as a result. Except for the laggards or those
missing a clear understanding/strategy. To succeed in Industry 4.0, obstacles need to be
addressed. An overview of digital transformation chances, challenges and evolutions, with
advice on the strategic and human dimension via the button below.

Digital transformation in the manufacturing industry

Digital transformation in government and the public sector

The role and structure of national and local governments, government agencies, state-
sponsored organizations and public sector institutions differs from country to country.

However, regardless of the ways typical areas where governments are involved such as public
healthcare, transport, public infrastructure, policing and defense, citizen services or
regulation, are organized, there are many commonalities in the challenges and priorities, not
in the least from the digital transformation perspective.

While from the citizen experience perspective the role of digital transformation becomes
clear in areas such as e-government and digital identity programs, in many other areas
transparency, efficiency and coordination are key in the digitization of processes and project
management.

Research shows that a majority of public sector professionals recognize the disruptive impact
of digital technologies on government.

 The first driver of digital transformation in government and the public sector is cost
savings in a world where populations are aging and a mix of local, national and geo-
political shifts necessitate choices and changes, whereby higher cost transparency and
cost reductions are key.
 The second driver of digital transformation in government is meeting the demands of
a ‘digital’ citizen and enhancing the citizen experience. Citizen demands are evolving
because demands of people are evolving, whether it’s in their capacities as workers,
consumers or citizens. Improving the citizen experience of an increasingly digital and
mobile first citizen whose digital lifestyle doesn’t match with the often paperwork-
intensive reality that is still too dominant and causes frustration is a priority.

Digital transformation: focus on government

Digital transformation in the utilities industry

Utility firms face tremendous challenges. Yet, they are at the same time active in an
industry where digital transformation can lead to tremendous cost savings, new
offerings, alternative pricing models, customer experience optimization and even
radical new ways of ‘doing business’, engaging with customers and their very business
model.

From a technological viewpoint, the Internet of Things, Big Data and everything related to
‘smart’ play a key role. Furthermore, investments and innovations in making customers
aware of their consumption and allowing them to control it in unseen ways add to the many
possibilities in areas such as ecology/environment and changing supply chains.

More about these evolutions, challenges and ‘digital possibilities’ on our overview page
where we tackle the utilities industry.

Digital transformation: focus on the utilities industry

Digital transformation in the insurance industry

The insurance industry has numerous opportunities to leverage technologies in

transformational ways.

Among the typical areas which are often mentioned are telematics, the Internet of Things, the
use of predictive analysis (risk) and new business models and pay-as-you-go insurance
approaches.
A majority of consumers would, for instance, be willing to have a sensor attached to their car
or home if this woud result in a reduction in premiums. Yet, just as much as technologies
offer tremendous opportunities which are increasingly being embrace by insurers, there are
also challenges. The changed expectations of policy holders and younger consumers play a
significant role here. Moreover, there is a lot of work in essential business process such as
insurance claims management, customer service and meeting changing regulations. On top of
that there is the rise of InsurTech and the fact that consumers buy insurances from non-
traditional providers, including retailers.

The challenges and opportunities are vast as you can read on our page about digitization and
digital transformation in the insurance industry.

Insurance: digital transformation, digitization, disruption and optimization

Digital transformation in healthcare

The digital transformation of healthcare among others is driven by the aging/growing

population challenge, the rise of chronic diseases, increasing costs and the changed
expectations and behavior of people whereby digital health plays an increasingly
important role.

These changed expectations and behavioral patterns obviously also impact us as patients, one
of many reasons why there is an increased focus on patient-centricity. However, let’s
certainly also not forget healthcare workers who display changing behavior as well and use
digital and mobile platforms too, which leads to an even more information-driven healthcare.

Mobile (‘mobile ability’) has totally changed the face of healthcare whereby increasing
productivity and employee satisfaction is another challenge. Doctors, specialists and nurses
often have to work in increasingly difficult circumstances amidst budget cuts.

That brings us to the need for efficiency and fast access to healthcare information for all the
obvious benefits. Another challenge concerns the funding of healthcare and, hence, also the
leverage of digital technologies to not just save costs but also grow revenues. In some
countries healthcare tourism, for example, is even a national priority as they evolve towards a
more services-oriented economy (look at some GCC countries).

As we move towards a more connected healthcare the Internet of Things becomes a key
game changer to tackle many of the mentioned challenges and reinventions of
healthcare models.

There are certainly more challenges – and opportunities – for the digital transformation of
healthcare and we dive deeper into several ones on our page on digital transformation in
healthcare where we also look at forecasts until 2020 and, among others, see an increase of
robots who take care of easy tasks in hospitals, the growing role of remote health monitoring
and new healthcare models, linked with data on our lifestyle. And of course there is a key
role for information and quite some work in the space of the digitization of health records
(EHR/EMR).

Digitization and digital transformation in healthcare

Digital transformation in banking

Another example of an industry/vertical that faces urgent digital transformation

challenges, albeit with contextual differences, is banking.

Digital transformation in retail banking

Although there are several changes, disruptions and digital transformation (challenges) in
retail banking some are restricted (or more/less important) to specific geographies given, for
instance regulatory, consumer-related, focus-related and even broader societal elements.
More about these geographical differences in “Retail banking: the growing importance of
direct and digital channels“.

Retail banks are increasingly collaborating with FinTechs as they don’t dispose of the speed,
technology, agility, technological (non-legacy) experience and sometimes even customer
experience skills and deep customer understanding FinTechs have. In some regios these
collaborative efforts are more important than in others but we clearly see a convergence of
FinTech and incumbents in many forms and shapes.

These evolutions, as well as the many challenges, opportunities and transformations retail
banks face on our overview page.

Retail banking: digital transformation, evolutions and challenges

Digital transformation in regional and ‘smaller’ banks

Of course digital transformation is not just for retail banks, let alone for large banks.

A nice digital banking framework for regional banks and community banks in practice, with a
focus on mobile banking and the gradual deployment of an omnichannel banking platform as
depicted above, leveraging tools such as mobile, chatbots, digital payments and Fintech
technologies can be found in an article by Konstantin Didur in a community banking context,
although it shows deployment stages that might be relevant for larger banks too.

The omnichannel banking platform – read more

Digital transformation in the supply chain: logistics and transportation

There aren’t many industries with as many interconnected organizations, ecosystems,

processes, information flows, devices (from individual goods, boxes and pallets to trucks
and ships) and physical distribution and handling operations as transportation and
logistics.

In a context of globalization, changing customer expectations, huge pressures on margins,

high risks of enormous volumes of data, the logistics and transportation industry is in full
flux.

Strictly speaking we of course need to differ between the transportation of people, animals
and goods. While the transportation of people of course is being transformed, a large majority
of digital transformation budgets goes to supply chain transformation projects with the move
from the hybrid model to a full digital supply chain network model of smart supply chain
management in smart industry and manufacturing in mind.

In the context of the transportation of goods and the supply chain, speed, visibility,
digitization and digital transformation rank high on the agenda.

Given the long-standing usage of sensors and RFID, as well as the need to dispose over data
which enable new business models and better processes, the (goods) transportation and
logistics industry takes a leading place in the deployment of Internet of Things projects,
Internet of Things spending and the Industrial Internet of Things market.

Also data analytics are big in this industry that has been used to work with big data before the
term existed. However, among the many transformational challenges is the fact that data
maturity levels need to go up and that digital strategies need to be deployed across end-to-end
supply chains. It’s a complex given in a highly complex and interconnected industry with
many different activities.

Digital transformation in logistics, supply chain and transportation

Digital transformation and business process outsourcing

There is a thin line between digital transformation and business process management,
more specifically business process optimization and reengineering for a digital age and
customer.

However, digital transformation also has a profound impact on business process outsourcing
(BPO) and thus the industry of BPOs. Business process outsourcing is moving from its
traditional predominant cost-saving and (outsourced) process optimization roots to a cost plus
optimization plus innovation plus value proposition.

Organizations have changing expectations from their BPO partners, who need to transform
themselves, in order to meet these changing demands of disrupted customers.

Business process outsourcers need to be far more aligned with business, acquire new skills,
transform and optimize their own operations, and last but not least, seek how to add more
value to their propositions.

When organizations transform, then so do their partners to whom they outsource specific
business processes.

Business process outsourcing in the age of transformation

Digital transformation beyond technology: the human

differentiator
To understand digital transformation, it’s key to put people and processes above
technology, even if technology is a change agent – or at least the ways we use it to evolve,
innovate, adapt and “pro-dapt”.
Digital transformation is about using digital technologies to improve (and connect and often
radically change) processes, enhance customer experiences, focus on the area where business
and customer value meet and seeing new and better possibilities , while using different and
digital-intensive ways to realize them. Digital transformation even goes beyond the use of
digital technologies to support or improve processes and existing methods. It is a way to alter
and even build new business models, using digital technologies. In that sense, it also goes
beyond digitization (although that’s often a condition to make it happen) and certainly
beyond a digital-savvy skillset and capacity which is nothing less than a must in the age
of an increasingly channel-agnostic and digital customer.

However, this so-called digital culture is not the start or essence of digital transformation.
Digital transformation is also about responding to the changes that digital technologies have
caused – and will continue to cause – in our daily lives, individual businesses and
organizations, industries and various segments of society. These changes are obviously not
brought upon us by the technologies themselves. The human dimension is not just an
important focus of digital transformation, it’s a catalyst whereby the ways we use and see
digital technologies can have very unexpected consequences, regardless of whether it
concerns consumer/customer behavior or the innovative capacity of disruptive companies
(nearly always a mix), in the end also people.

In the end, the mindset, let alone somewhat vague term ‘culture’, and approach we need is
one of continuous optimization, holistic improvement and a focus on what people need, far
beyond the digital context.

Disruption and transformation: on people and change

Digital transformation and linear management thinking

With digital transformation being a de facto very hyper-connected reality on human,
societal and various business and technology levels, linear management thinking and
siloed approaches make place for hybrid, integrated, inclusive and fluid ecosystem
views beyond the classic extended enterprise model.

In practice this means that executives need to have a far better understanding and skillset
regarding the various domains which are involved in digital transformation processes.

A CIO needs to understand customer-centricity. A CEO needs to know about the many parts
of business process reengineering, cybersecurity, IT and more. The list doesn’t end there. As
the drivers of technological innovations also shape the directions in which economies and
businesses move (and vice versa) the ability to connect the dots and step away from linear
view towards elasticity and hybrid approaches. Understanding the impact of transformations
in so many areas is probably one of the main challenges for executives. Welcome to a hybrid
and fluid world – for executives too.

Read more
Digital transformation and the importance of digital-savvy organizations – source Digitize or
Die
Digital transformation – the inevitable definition
discussions
Definitions are important. Without common definitions we don’t know what we talk
about when we talk about it. That’s why through the years we wrote a content
marketing definition, a social business definition, an Internet of Things definition
(always mentioning definitions of others), the list goes on.

One of the many topics we didn’t write a definition for is digital transformation. Ironically,
for reasons we ignore, when you look up the term “digital transformation” on Google a part
of this page shows up first (that could have changed by the time you read it). It might be the
reason why you are here to begin with.

Obviously that part (which you see on Google) is just a piece of what’s written on this page
and as you might have noticed we didn’t say ‘this is our definition of digital transformation’.
Moreover, if you type in ‘digital transformation definition’, you’ll see Wikipedia, not this
page. Since we started writing about digital transformation, many people looked at that
Google ‘description’. Some liked it, some thought it was too vague and we were amazed to
see what an impact it has. In case you want a definition of digital transformation, well, for us
it’s somewhere hidden in this page and not just in the first paragraph.

We decided not to write a formal definition of digital transformation as the term is used
by so many for so many reasons and from so many angles that it’s become an umbrella
term. Maybe one day we’ll add a list of definitions with or without comments, maybe
not.

What matters to us is that digital transformation takes into account all the parameters that are
needed to succeed, depending on your strategy, roadmap, goals, stakeholders, context and so
forth. What also matters to us is that you don’t look at digital transformation from a pure
technology nor a pure marketing or any other angle.

The reason we added this little addition on digital transformation definitions is really because
you can’t imagine how many discussions there have been about “our definition” (even if we
never wrote one) and how many people absolutely want us to push their definitions.