What is digital transformation?
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Being in the business of software implementation and consulting, our services have always been about transformation. What has changed is that these technology projects are now the cornerstone of modern business strategy.
Anyone working in the technology space or as a business leader has likely come across the phrase digital transformation recently. As an Oracle partner and consulting firm, it’s a phrase we now hear (or read) daily. Recently, Terillium hosted a workshop on the topic. The process of planning the workshop content led us to further examine what digital transformation really means for the businesses we help.
So, what is digital transformation – and why does it matter? To quote an article on becoming a digitally mature enterprise in MIT Sloan Management Review:
“The power of a digital transformation strategy lies in its scope and objectives. Less digitally mature organizations tend to focus on individual technologies and have strategies that are decidedly operational in focus. Digital strategies in the most mature organizations are developed with an eye on transforming the business.”
How does this apply to our customers, and businesses working on new strategies?
The Harvard Business Review article How to Navigate a Digital Transformation is a good read, and states: “Digital transformation requires that companies reallocate their asset portfolio to support new, digitally enabled business models.”
Being in the business of software implementation and consulting, our services have always been about transformation. We help our customers transform their business with newer, modern systems that run parallel to efficient business processes that we help companies define and implement.
What has changed is that these technology projects are now the cornerstone of modern business strategy. They are no longer IT projects – they are strategic business projects. It’s not just the CIO that is involved in digital transformation, because digital transformation for the enterprise is often synonymous with business transformation.
Good technology is one of the most important assets to any business.
The new capabilities and avenues available to our customers for business transformation have also changed. Helping our customers automate manual processes, clean up company data, make efficiencies has always been a priority and a part of every project. Now there are more ways than ever to help our customers tackle these business challenges. As much as some don’t want to hear it, the cloud is one of those avenues. IoT technology – being able to communicate with machines through the Internet, is another evolving avenue for our customers. New ways to automate warehouse and inventory management even further, is another example.
The important task for business leaders is to look at these technologies as part of the overall business strategy – and use digital technology as a tool for transformation, whether that is transforming internal processes, positioning the business for major growth, or gaining a new competitive edge.
How is digital transformation different from disruption business theory?
To quote the Harvard Business Review again, “‘Disruption’ describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses.”
One recent example of a disruptive business is a Midwest-based online estate auction site. Using technology, the company took what was an offline process for most and created an online model. This new business model makes the estate auction process simpler and easier for the customer as the company takes the estate items off the hands of the customer and stores the pieces in warehouses around the country until they are auctioned off online. This digital disruption has also benefited the company; the business has raised over $80M in funding and anticipates revenue growth of 110% this year. (source)
Digital technology is a tool that businesses can use to be disruptive in their competitive space.
What does a digital enterprise look like?
One of our clients is another good example of a business that has used digital transformation to personalize the brand experience for both employees and customers. A unique sports venue usually equated with history and tradition, this client has transformed how employees and customers interact with their brand by integrating new technology into almost every area of the business.
Our part in the larger transformation strategy was to integrate a modern Customer Relationship Management (CRM) system for the sales and events teams. Terillium was able to help the company implement Oracle Sales Cloud, a flexible system to meet the unique needs of the enterprise – including an important integration with Tickemaster. This led to better communication between the sales and events teams, and a better customer experience. Sales and events employees now have better data and insights into buying behavior and other trends, and can create a better overall experience for their customers.
What are specific traits of a digital enterprise?
Oracle JD Edwards defines a digitally transformed business as agile, connected, and real-time. A digital enterprise uses technology to be more profitable, and efficient. A digital enterprise transforms processes and business models to personalize the employee and customer experience. What does that look like in real life?
Another Terillium client, a global manufacturer of high-quality cooking equipment that serves customers such as McDonald’s and Chick-fil-A, has transformed their business with IoT technology. The company was experiencing growing pains, and needed to address business challenges that came with growth: internal supply chain challenges, inaccurate inventory, order accuracy, and overflowing warehouses. The leadership envisioned a technology roadmap that enabled their ERP and e-commerce platform to “talk” to warehouse equipment using the Internet of Things.
The business was able to continue to grow their business while integrating transformative IoT technology. The company improved order accuracy, automated internal supply chain, put in place a scalable solution, raised inventory levels yet reduced floor space by 40-60%, increased labor efficiency, and improved visibility into inventory.