What is Digital transformation?
Digital transformation is when companies start using new technology across all areas, resulting in fundamental changes to how the company operates and how they add value for their customers.
There are many ways in which to describe digital transformation, and Difi has described it well:
- A process whereby the enterprise changes how it executes its tasks, offers better services, works more efficiently or create completely new services
- … where emphasis on users and the user experience is at the very heart of the change
- … and which are based on the utilisation of digital technology
- A fundamental and extensive change, not a minor adjustment
- Redesign of the enterprise at all levels – people, processes, technology and management
Source: Difi, 28 November 2016
It is important to point out that not only companies and organisations can undergo digital transformation: the behaviour of individuals and their approach to communication are also influenced by lightning-fast digital development.
The second digitisation wave – a historical overview
We have now embarked upon the second digitisation wave, and there is frequent reference to digital transformation in this wave.
The first digitisation wave came with the Internet in the mid-1990s. This essentially involved people suddenly being able to run their businesses online instead of through traditional channels. This led to the emergence of a range of newly started companies which used this as their primary business model, and these companies then became a threat to traditional companies, which were also attempting to create an online presence. These new companies had products that were optimised for sale and supply online, relations were handled online, the running of these companies was synonymous with the running of an Internet company. The first wave was applicable primarily to industries that were already digitised, the PC was the primary channel and the solutions integrated the company’s own data.
In the second digitisation wave, the difference this time is that it applies to everyone.
“As regards the second digitisation wave, we refer to digital transformation as established companies have to change their approach with regard to the sale and supply of their products, how customers are found and retained and how companies are run in the new digital world, and employees have to be turned into heroes with new, digital tools,” says Yngvar Ugland, Strategy and Alliance Director at the Compello Group.
Opportunities and challenges with Digital transformation
Automation and streamlining are key to digital transformation. When companies know how digital development is affecting behavioural patterns and purchasing processes, they can create stronger offerings to customers and develop new approaches that promote demand and commitment. But as technological development and digitisation pave the way for new opportunities, so new challenges arise. Some jobs will of course be eliminated when processes are digitised, automated and streamlined. Therefore, in the future both society and trade and industry will take on important responsibility for creating new jobs and recreating existing ones.
Digital transformation at Compello
We are currently undergoing a digital voyage of change at Compello. We focus strongly on digitisation and automation and are investing heavily in cloud computing (SaaS). As far as we are concerned, digital transformation involves daring to ask questions about traditional business models, processes, organisation and operation.
Such transformations require a combination of three things:
- You have to stop doing some things
- …you have to do something new
- …and you have to do old things in new ways.
“In other words, you cannot just take established processes and digitise these. Rather, you have to consider how you could achieve the same objective for the new opportunities offered by the technology. My favourite example is if you want to make a digital transformation of creating music, the solution is not to put together a band of robots that can all play instruments. This ‘differentness’ made possible by the technology is what gives the major opportunities. And even if not everything can be achieved using technology, some things cannot be achieved without it. This same ‘differentness’ is also what frightens many people. But to people who are afraid, I normally quote Jonathan Schwartz, ex-CEO of Sun Microsystems: ‘Different isn’t always better, but better’s always different’,” says Ugland.