What is Digital Transformation?

The definition of digital transformation:

Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.

It transcends traditional roles like sales, marketing, and customer service. Instead, digital transformation begins and ends with how you think about, and engage with, customers.  As we move from paper to spreadsheets to smart applications for managing our business, we have the chance to reimagine how we do business — how we engage our customers — with digital technology on our side.

For small businesses just getting started, there’s no need to set up your business processes and transform them later. You can future-proof your organisation from the word go. Building a 21st-century business on stickies and handwritten ledgers just isn’t sustainable. Thinking, planning, and building digitally sets you up to be agile, flexible, and ready to grow.

As they embark on digital transformation, many companies are taking a step back to ask whether they are really doing the right things. Read on for answers.

Digital transformation begins and ends with the customer :

Before looking at the hows and whats of transforming your business, we first need to answer a fundamental question: How did we get from paper and pencil record-keeping to world-changing businesses built on the backs of digital technologies?

What’s the difference between digitisation, digitalisation, and digital transformation?

Digitisation is the move from analog to digital :

Not so long ago, businesses kept records on paper. Whether handwritten in ledgers or typed into documents, business data was analog. If you wanted to gather or share information, you dealt with physical documents — papers and binders, xeroxes, and faxes.

Then computers went mainstream, and most businesses started converting all of those ink-on-paper records to digital computer files. This is called digitisation: the process of converting information from analog to digital.

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Finding and sharing information became much easier once it had been digitised, but the ways in which businesses used their new digital records largely mimicked the old analog methods. Computer operating systems were even designed around icons of file folders to feel familiar and less intimidating to new users. Digital data was exponentially more efficient for businesses than analog had been, but business systems and processes were still largely designed around analog-era ideas about how to find, share, and use information.

Digitalisation is using digital data to simplify how you work :

The process of using digitised information to make established ways of working simpler and more efficient is called digitalisation. Note the word established in that definition: Digitalisation isn’t about changing how you do business, or creating new types of businesses. It’s about keeping on keeping on, but faster and better now that your data is instantly accessible and not trapped in a file cabinet somewhere in a dusty archive.

Think of customer service, whether in retail, field ops, or a call center. Digitalisation changed service forever by making customer records easily and quickly retrievable via computer. The basic methodology of customer service didn’t change, but the process of fielding an inquiry, looking up the relevant data, and offering a resolution became much more efficient when searching paper ledgers was replaced by entering a few keystrokes on a computer screen or mobile device.

As digital technology evolved, people started generating ideas for using business technology in new ways, and not just to do the old things faster. This is when the idea of digital transformation began to take shape. With new technologies, new things — and new ways of doing them — were suddenly possible.

Digital transformation adds value to every customer interaction:

Digital transformation is changing the way business gets done and, in some cases, creating entirely new classes of businesses. With digital transformation, companies are taking a step back and revisiting everything they do, from internal systems to customer interactions both online and in person. They’re asking big questions like “Can we change our processes in a way that will enable better decision-making, game-changing efficiencies, or a better customer experience with more personalisation?”

Now we’re firmly entrenched in the digital age, and businesses of all sorts are creating clever, effective, and disruptive ways of leveraging technology. Netflix is a great example. It started out as a mail order service and disrupted the brick-and-mortar video rental business. Then digital innovations made wide-scale streaming video possible. Today, Netflix takes on traditional broadcast and cable television networks and production studios all at once by offering a growing library of on-demand content at ultracompetitive prices.

Digitisation gave Netflix the ability not only to stream video content directly to customers, but also to gain unprecedented insight into viewing habits and preferences. It uses that data to inform everything from the design of its user experience to the development of first-run shows and movies at in-house studios. That’s digital transformation in action: taking advantage of available technologies to inform how a business runs.

First, understand what’s possible with digital transformation :

A key element of digital transformation is understanding the potential of your technology. Again, that doesn’t mean asking “How much faster can we do things the same way?” It means asking “What is our technology really capable of, and how can we adapt our business and processes to make the most of our technology investments?”

Before Netflix, people chose movies to rent by going to stores and combing through shelves of tapes and discs in search of something that looked good. Now, libraries of digital content are served up on personal devices, complete with recommendations and reviews based on user preferences.

Streaming subscription-based content directly to people’s TVs, computers, and mobile devices was an obvious disruption to the brick-and-mortar video rental business. Embracing streaming also led to Netflix looking at what else it could do with the available technology. That led to innovations like a content recommendation system driven by artificial intelligence. Talk about making the most out of your IT department!

Adapt your business to leverage digital transformation:

Similarly, digital transformations have reshaped how companies approach customer service. The old model was to wait for customers to come find you, whether in person or by calling an 800 number. But the rise of social media has changed service much like it’s changed advertising, marketing, and even sales and customer service. Progressive companies embrace social media as a chance to extend their service offerings by meeting customers on their platforms of choice. 

Making call centers and in-store service desks run more efficiently with digital technology is of course great. But real transformation comes when you look at all available technologies and consider how adapting your business to them can give customers a better experience. Social media wasn’t invented to take the place of call centers, but it’s become an additional channel (and opportunity) to offer better customer service. Adapting your service offerings to embrace social media is another good example of a digital transformation.

But why stop there? As we mentioned earlier, digital transformation encourages businesses to reconsider everything, including traditional ideas of teams and departments. That doesn’t necessarily mean tapping your service reps to run marketing campaigns, but it can mean knocking down walls between departments. Your social media presence can encompass service and marketing, tied together by a digital platform that captures customer information, creates personalised journeys, and routes customer queries to your service agents.

How do you define Digital Transformation?

Digital Transformation is at the top of virtually every organization’s list of objectives and concerns in 2020. The rules of business – and public sector – are being rewritten nearly every day as a combination of technology advancements, evolving customer expectations, process enhancements (e.g. digitization), and new business models are forcing executives to rethink prior IT strategies. Digitally transforming the organization represents an opportunity to meet these changing requirements and to leverage technology for providing differentiated and compelling experiences or outcomes.

Digital Transformation generally isn’t a single technology, nor is it a single IT project; it’s about employing a broad set of technologies, often in a series of interrelated initiatives. It often starts with an evaluation of top organizational objectives and requires an internal analysis of resources, organizational maturity, and technological gaps. The intersection of these two data points (prioritized needs and organizational realities) often informs a roadmap and investment horizon.

In the end, the decisions organizations make on how to evolve – by leveraging advanced technology in new and innovative ways – will have a direct impact on differentiation, growth and scale, profitability, risk mitigation, customer satisfaction, and speed-to-market. Those that select the right IT from the right technology partners, and then implement solutions in a practical, methodical manner over time, will likely flourish. Those who do not will likely struggle. The disparity is that stark.

What are the four main areas of Digital Transformation?

While Digital Transformation touches virtually every corner of the organization, and as a result is often the subject of varying priorities from numerous stakeholders, there are common threads on core objectives. Fundamentally, what organizations are trying to do is move faster, have greater agility, secure what matters most, and leverage insights to drive value. These four core pillars align directly to established – yet historically disconnected – software markets:

• Enterprise DevOps – Users are hungry for “new and improved” today, not tomorrow. Ensure timely software delivery by optimizing value streams from request to business value. Align stakeholder priorities, strengthen collaboration, automate everything, and scale DevOps with confidence.
• Hybrid IT Management – The IT landscape is a complex, dynamic hybrid of traditional and cloud-based technologies. Simplify hybrid complexity while transforming IT into a true service-driven organization to fully participate in digital business success.
• Predictive Analytics – Learn more about unmet customer needs, under-funded parts of the business, and emerging business models to drive the top line.
• Security, Risk & Governance – Safeguard the assets that matter most to the organization: identities, applications, and data. This is important all the time, but perhaps never more relevant than during a period of transition, when processes and technology are evolving.

Because these initiatives often overlap, organizations today are not just looking for software providers that can deliver these solutions in isolation, but instead can deliver a holistic and integrated set of offerings across these pillars to achieve optimal results over the long run.

Why is Digital Transformation important?

The benefits of Digital Transformation are many and varying. They can be placed into two broad categories:

Top-line benefits

Opportunities to grow the business are always attractive and can manifest themselves in many forms. Some of the most common objectives to this end include:

• Boost and sustain revenue – Access to increasing amounts of data and new ways to bridge formerly distinct data silos now enable organizations to achieve actionable insights. As a result, organizations can more effectively act on unmet customer needs, under-funded parts of the business, emerging business models, and more.
• Drive customer engagement – Organizations are constantly looking for new and better ways to engage customers. With the right investments, they can eliminate intermediaries and employ digital platforms to reach and serve customers directly, closing the loop between data and action and truly understand their customers and better satisfy their needs.
• Deliver with greater speed – Customer expectations are constantly advancing, especially when it comes to accessing new and emerging benefits. With cognitive search, employees are able to perform knowledge discovery more efficiently; and with smarter functional testing, organizations can deliver innovation (at lower risk) than ever before.

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Bottom-line benefits

With IT budgets under pressure, organizations are often focused on optimizing the enterprise. Some of the most-common paths to lowering risk and cost include:

• Improve quality and delivery – Gaining access to AIOps helps organizations reduce event volumes and get to root cause faster, and emerging service assurance technology combines data from hundreds of tools into a single pane of glass to discover IT resources and dependencies and fast-track problem resolution.
• Streamline & enhance processes – Organizations that digitally transform are able to better streamline the back office with Robotics Process Automation (RPA), drive intelligent manufacturing with IOT analytics, and automate planning monitoring and scheduling.
• Detect and prevent risk – Evolving IT and processes helps organizations efficiently manage policies and privileges, identify insider threats, better lock down mainframe access, comply with regulations, and protect consumer privacy.

How do you get started with Digital Transformation?

In many organizations, the primary purchasing power has moved away from the IT department. This can lead to decisions where the objectives of a given project may be inadvertently narrow and misaligned with overall corporate plans. For instance, a manufacturing business unit may optimize for throughput, which may be at odds with legal and compliance processes. According to a Harvard Business Review report, one of the primary reasons why so many high-profile transformations fail is because they are “not hard-wired into business strategy and key processes.” A better approach to minimize the downstream risk of re-work is develop a holistic and integrated picture early on, by ensuring alignment between IT and business unit heads and placing specific projects into context of the organization’s overall goals.

What are the common pitfalls of Digital Transformation?

The biggest pitfall generally occurs at the execution phase. At first blush, pursuing Digital Transformation by starting over from scratch – i.e., ripping out current technology in lieu of bleeding-edge software – appears to have merit. With this approach you are likely to achieve the exact specifications you are looking for.

For most however, particularly with core business systems that have been in place for many years, the prudent approach is typically to build on to what already exists. Typically these organizations have built out processes and IP that, when combined, serve as systems of record and address mission-critical requirements. Pursuing a rip-and-replace strategy in such situations often introduces a level of risk, plus negatively impacts cost and time-to-market, that are strategically unacceptable.

The prudent path is to modernize existing technology and extend current investments with software that bridges the old and the new. Often called “smart Digital Transformation,” a modernization strategy allows organizations to optimize savings and convenience, as well as deliver a much lower risk profile by avoiding the disruption of tried-and-true processes and degrading ROI on existing investments.

How important is artificial intelligence/machine learning to Digital Transformation?

Advanced analytics have historically been sold as stand-alone offerings – as a product or as a platform – which artificially capped the benefits they could provide. With additional requirements being placed on IT, and as organizations are finding new and better ways to bridge formerly distinct data silos, expectations are now also evolving. Expect to see artificial intelligence/machine learning being integrated into DevOps, Hybrid IT, and Security, Risk & Governance solutions to help drive added value to the organization and help more effectively manage risk and cost. This evolution will thus help drive top- and bottom-line results to early adopters.

What are the keys to success with Digital Transformation?

Once the critical elements are clear, make sure the business’ goals are outlined in full. One of the most common reasons why IT projects fail is unclear or evolving objectives. If you are pursuing a mainframe modernization project, for example, achieving better speed and delivery throughput with DevOps may be a primary objective. But there is much more you can accomplish at the same time, including deploying into new channels and markets by leveraging Cloud deployment models, increasing throughput, and having the ability to surface the data that has been locked away for a long time and making it more broadly accessible to advanced analytics. Make sure you draw the circle big enough on what you’re trying to accomplish at the outset, and then tune your strategy accordingly.

Then take stock of where you are today and establish where you want to be at a set point in time, and then identify and prioritize key IT gaps. This will provide a meaningful structure to build from, and will help you start to crystalize a framework. Equally important, make sure your plan takes your current IT realities into account. This is often described as a modernization maturity model, and it is critical to ensure you balance ambition and risk mitigation.

Finally, no effort to evolve will be successful without taking the time to build a team that can think creatively and adapt to change. In a recent survey, this was supported by 38% of CIOs who said their digital strategy would fail without an innovative and experimental culture. Make sure you don’t forget the softer components of change management.

What should I look for in a Digital Transformation partner?

Each organization’s needs are unique, and thus an ideal technology partner will fluctuate from company to company. Given complexity, inherent risk, and long-term timeframe typically associated with such projects, there are a few best practices to consider:

• Prioritize holistic, integrated sets of solutions, so you can innovate faster with less risk.
• Identify technology that can bridge the old and new, so you can pursue smart Digital Transformation with a modernization strategy.
• Expect flexibility in deployment and vendor compatibility to remove barriers to strategic initiatives. 
• Look for solutions that are open and integrated, so you can build out an ecosystem that serves your distinct needs.
• Embrace vendors that deliver customer-centric innovation, so you can meet evolving requirements more effectively.

How can Micro Focus be Your Digital Transformation Solution?

Micro Focus helps customers digitally transform their organization and achieve growth, profitability, and customer-satisfaction objectives while also maintaining the ability to optimize their overall business spend. Backed by a deep analytics ecosystem, Micro Focus combines a wide range of trusted and proven products and solutions with customer-centric innovation to deliver the speed, agility, security and insights necessary to succeed in today’s rapidly evolving marketplace.

Micro Focus’ solutions are well aligned to the four core pillars of Digital Transformation:

• Enterprise DevOps
• Deliver at high speed with low risk

DevOps is essential to the Digital Transformation of a business and is a foundational change in how an organization delivers value to its customers. With Micro Focus, organizations can reliably scale DevOps across all environments, from mainframe to cloud – quickly bringing innovative ideas to life at the pace your business demands. Now speed and quality can go hand in hand.

• Hybrid IT Management
• Simplify your IT transformation

Diverse, unpredictable, and constantly changing, hybrid IT brings with it a new level of complexity that cannot be controlled by conventional management methods. With our solutions, customers can simplify that complexity and transform IT into an agile, services-driven organization. Business success in our digital-first world depends on it.

• Security, Risk & Governance
• Secure what matters most

Cyber threats are escalating. Aging apps and processes (along with new ones) are full of unforeseen risks. Privacy and compliance requirements are mounting. And point solutions don’t offer the scope, vision, or cross-silo analytics needed for these company-wide challenges. With our solutions, you can take a holistic, analytics-driven approach to securing what matters most – identities, applications, and data.

• Predictive Analytics 
• Analyze in time to act

Lakes of data are valuable only if you can surface the insights hidden within their depths. With our solutions, you can leverage machine learning to transform unlimited volumes of data into accurate, actionable, automated insights – at the speed of your business. Now you’re ready to make predictions and influence business outcomes.

With our predictive analytics solutions, you can leverage machine learning to transform unlimited volumes of data into accurate, actionable, automated insights – at the speed of your business.

The company’s unique point of view on Digital Transformation is that most initiatives have a common thread. While organizations recognize that they must evolve their IT practices to stay competitive, they also know that the core business systems and supporting processes they have developed over time are the lifeblood of the organization. Instead of adopting a rip-and-replace strategy that can yield unacceptable risk, most customers instead wish to pursue a modernization strategy.

Micro Focus delivers on the promise of smart Digital Transformation by developing and delivering software that is optimized to bridge the old and the new. With a holistic portfolio, which is integrated and open, Micro Focus helps customers run and transform their business at the same time.