For business enterprises, formulating a robust digital transformation strategy is the key to remaining competitive. It helps them to achieve operational excellence, minimize risks, enhance productivity and efficiency, reduce costs, and deliver superior user experiences, among others. However, implementing enterprise digital transformation is not an easy job, for it calls for proper planning in reshaping the company’s business model, and other aspects. The main challenge lies in integrating and leveraging new digital technologies and overhauling the business models and processes. If statistics are to be believed, then global spending on digital transformation by 2024 is expected to reach a whopping 2.4 trillion dollars (Source: Statista).
In fact, COVID-19 seems to have accelerated the pace of digital transformation with companies, in order to keep their operations running, investing to enable remote working. The question today is not when enterprises need to prioritize digital transformation, as the tipping point has passed long ago, but how to leverage its potential to the optimum and utilize it as a competitive advantage. The failure of The Washington Post and Blockbuster (a movie rental company) to develop and implement new business models based on digital transformation is a testimony to the consequences of not implementing the right digital transformation strategy.
What is digital transformation all about?
There is a tendency to conflate terms like digitization and digital transformation or to use them interchangeably. However, there is a significant difference between the two. Digitization is about converting data and information from the analogue to the digital medium or enabling the automation of processes using ICT (Information, Communication, and Technology). Digital transformation or digitalization, on the other hand, refers to the changes any business enterprise can bring about in its business model, processes, products, services, software testing and the organization structure by adopting digital technologies.
Digital transformation leads to organizational agility wherein many or all processes within the organization are streamlined and silos or bottlenecks are removed. In many cases, businesses often lack clarity about choosing the various elements and options in pursuance of digital transformation. As a result, they disregard solutions that are more specific to their organization’s specific situation. So, what are the options for organizations to formulate a digital transformation strategy? Let us find out.
Options for digital transformation implementation
An organization can build a digital transformation framework based on four key dimensions:
Technology: Refer to the organization’s ability and approach to embrace and leverage new digital technologies. For instance, whether IT is to be used as an enabler or supporter. In the case of the former, the organization can create or leverage new business opportunities, while with IT as a supporter, it can bring about changes in the business processes. Also, the approach to embracing IT should be underpinned by the idea of being an early adopter or innovator. By being an early adopter, the technology solutions are deployed in the early stages of their development. While using the innovator approach, new technology solutions are created.
Value creation: Refers to the impact of digital transformation on an enterprise’s value creation. For instance, focusing on core business processes or diversifying legacy processes, and leveraging the potential of digital technologies. These approaches, however, will depend on the enterprise’s risk taking appetite and the availability of opportunities and resources. The next point in value creation is to understand how digital transformation will generate revenue for the enterprise.
Structural: The organization needs to carry out modifications in its processes, organizational structures, and skillsets of employees to cope with the impact of new technologies. For instance, who is in charge of overseeing the implementation of digital transformation solutions - CEO, CTO, head of respective business units, or COO? It will depend on the scale of the implementation - CEO for overall, CTO/CIO for interface with customers, and COO/CIO for internal business processes. Also, whether to integrate the new digital technologies into the current structure or create a separate business unit or subsidiary to derive the optimum benefits.
Financial: It is about the steps to be taken by an organization’s fledgling core business to finance the software testing initiative. The decision to take the initiative will ultimately rest upon the organization’s ability to take risks or the level of competition involved. Any QA digital transformation entails expenses for acquiring new capabilities, training resources, or changing the culture. For struggling businesses, the options will be fairly limited as the business model might not give them quick results.
Conclusion
Digital transformation is the need of the hour for businesses to sustain themselves in the market. The optimal situation to go about such a transformation is to invest in restructuring the internal processes and allow the revenue streams to generate profits. The entire exercise would entail changes in leadership, culture, products, processes, and the organizational structure.
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James Daniel is a software Tech enthusiastic & works at Cigniti Technologies. I'm having a great understanding of today's software testing quality that yields strong results and always happy to create valuable content & share thoughts.
Article Source: nasscom.in