The Trend Every Company is Facing: Digital Transformation
It’s one of the biggest global trends in business, but “digital transformation” is more than just the latest buzzword or phrase of the day.
It’s a phenomenon that’s enabling entirely new business models and services as well as revolutionary breakthroughs in how we all do business.
In this article, we’ll take a look at digital transformation and what it means in a broader business context, and how it will impact virtually every firm and company in the coming years.
Let’s start by defining the concept and its implications.
What Digital Transformation Means
Digital transformation involves the profound transformation of business activities, processes, competencies and models through digital technologies. It means strategically capitalizing on the changes and opportunities enabled by digital technologies and their growing impact across society and the markets we serve.
But it’s not a singular transformation. It’s an ongoing process as business and market conditions change and digital technologies are applied to enable further innovation and optimization.
Here at Graphite, we’re a direct result of digital transformation as Internet and cloud technologies have allowed us to create a business model where we connect companies with the world’s leading independent consultants. But the same technologies help our global consultants provide strategic guidance and assist organizations as they navigate the challenges and opportunities enabled by digital transformation.
It’s a perfect example of the two sides of digital transformation: digital technologies not only enable new startups and business models but allow us to reinvent existing processes and ways of communicating and collaborating.
By leveraging digital technologies and connecting the entire business ecosystem of people, teams, technologies and data, companies can improve processes and performance across the entire organization. They can then leverage those improvements to deliver better customer experiences, develop innovative new products and services, and adapt to rapid market changes.
Turning Digital Transformation into a Disruption and Competitive Advantage
Digital disruption is when an industry, a way of doing business, or a society is significantly challenged by established companies or newcomers using digital technologies and strategies. They create solutions, business models and approaches that significantly alter customer behavior and market conditions. This inevitably forces other existing players to change their strategies and how they operate.
A perfect example of this is Amazon and its disruption of the retail industry. But the same thing is happening across many industries, and it even involves many established corporations who are using digital technologies to operate more like nimble, innovative and revolutionary startups.
For example, as we’re seeing in manufacturing, logistics and transportation, companies are leveraging the Internet of Things (IoT) to create hybrid cyber-physical systems and processes. They’re using sensors and networks to connect and share data collected from machines and physical objects and not just people and processes.
They use the resulting information and insights to optimize human decision-making, management, innovation and customer service. In the coming years, artificial intelligence (AI) offers the prospect of further automating and enhancing this process.
Organizations that are embracing digital technologies are becoming digital disruptors. They work smarter and outperform their competitors, forcing the rest of their industry to adapt or suffer the consequences.
In the industrial space, we call this digital transformation Industry 4.0, representing the fourth industrial revolution in history. But the same principles apply to any business. There is no industry immune to digital disruption and none where digital technologies can’t transform a business and help it achieve better results.
The Broad Impact and Application of Digital Technologies
Digital transformation is impacting nearly every industry on the planet, including traditionally non-digital industries such as agriculture. By 2025, there will be two billion more people to feed in the world, with less farmland available than ever before and greater demand than modern farming can likely sustain.
Facing this challenging future, the agriculture industry is now turning to digital transformation to sustainably grow more crops for a growing population while using fewer resources.
An excellent example is Syngenta, a global seed and agrochemical company serving global farmers. The company is using digital technologies to optimize food production, supply, and its research and development efforts.
Syngenta has connected its processes, technology platforms and digital assets to better integrate all of its operations, improve customer service, and better manage and predict agricultural output and activity with real-time data.
One specific effort is its development of a mobile app that its field agents use when visiting farmers and growers. They use the app to gather data on what the farmer has been growing, their farming experience, the conditions of their farm, and the market for their crops.
This data helps Syngenta’s field agents gain more insight into that grower and the issues it faces, and the company can provide farmers with the right seeds or chemicals to grow and protect their crops and maximize yield. In turn, they analyze this data with machine intelligence to make predictions and plans for growers, giving farmers critical insights for future planting and harvesting.
It’s an important lesson to keep in mind for industries or companies that might think digital transformations won’t affect or disrupt their sector, or will take years to materialize. The business graveyard is filled with companies that adopt this dangerous mentality and pay the price with their existence.
As Charlene Li, an expert on disruptive technology explains, “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.”
In the case of Syngenta’s effort to help farmers feed a rapidly growing world population, we can clearly see how a digital transformation can be the right solution. It helps solve a traditional, non-technological problem with the application of digital technologies.
Developing a Digital Transformation Strategy
Digital transformation can be both a threat and a strategic advantage for any organization. Companies that don’t use it to their maximum advantage and get ahead of the curve face the prospect of being in a reactive and disadvantaged position. Those who leverage it well could become the next disruptors or preserve a presently dominant status in the market.
But a digital transformation is unique to every organization and requires a careful examination of risks, opportunities and threats.
- Are you already experiencing disruption in your business or industry from competitors using digital technologies to their advantage?
- Are there potential disruptions on the horizon?
- How can you respond or get ahead of your competitors and leverage digital technology to optimize your business or develop new products or services?
Fortunately, digital transformation provides a way to answer these questions by connecting with and hiring the experts and strategists to help you make a sound assessment and develop a visionary long-term strategy for your business or portfolio company.
At Graphite, our pre-vetted and highly qualified consultants will help you navigate the challenges and capitalize on the opportunities of digital transformation. From market and organizational analysis to strategic advising and technology insights, our experts can help you make the right decisions to become one of tomorrow’s digital disruptors.