Process Excellence Network. Digital transformation
Digital transformation is the process of adopting and implementing digital technology to create new or modify operations, services and products by translating business processes into a digital format. At a time of significant technological advancement and evolving business requirements, digital transformation is high on the agenda for practically all modern organizations.
The Surge in Digital Transformation Spending
Process Excellence Network recently reached out to 555vCTO.com founder Vaclav Vincalek to get his thoughts on digital transformation.
“I think the most surprising thing that businesses learn when undergoing digital transformation is that technology plays a secondary role in it,” says Vaclav Vincalek, virtual CTO and founder of 555vCTO.com. “Often, businesses think digital transformation means lots of technology, and once the technology is incorporated, they are done.”
Worldwide spending on digital transformation is forecast to reach almost US $4 trillion by 2027, according to the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide. As organizations continue to prioritize digitalization, digital transformation investments are projected to grow substantially, potentially reaching or even surpassing two-thirds of all information and communication technology (ICT) spending, it found.
Digital transformation hinges on employee buy-in, says Vincalek. “Management can’t just decide to throw in new technology and expect their employees to know how to use it. A great example is when UPS introduced a new way of loading their trucks for daily delivery. The technology and the data were ready in a short period of time (relatively speaking), but the implementation and training of all the managers and drivers took? That took about two years.”
Challenges and Strategies for Success
Digital transformation can sometimes feel like it’s all hype and no substance. While it promises exciting benefits like new revenue opportunities, increased productivity, and cost savings, many projects don’t quite hit the mark. A study by McKinsey & Co, which looked at over 600 companies that had recently undergone digital transformations, revealed that only 20% of these businesses managed to achieve more than 75% of the revenue gains they had expected. Even fewer, just 17%, reached over 75% of their anticipated cost savings.
According to KPMG International's "Transforming the Enterprise of the Future" report, a third of business leaders now see digital transformation as an ongoing process of “continuous reinvention” rather than a one-time upgrade. The study found that 88% of companies are running multiple transformation programs, with over half juggling three or more at the same time. Stanley John Kebite, project manager at Japan-101, notes that keeping a competitive edge requires continuous improvement and staying up-to-date with technology.
Technology alone isn't enough to drive transformation; it's about reworking your entire business model to align with it, explains Matt Aird, CTO at Custom Neon. For their company, the shift went beyond just updating their website or adding AI. It involved analyzing how their site was used, identifying what worked and what didn’t, and then overhauling their approach to customer interactions, product development, and internal processes.
Cybersecurity is a huge challenge for organizations navigating digital transformation, according to Kahani. While many see it as a hassle, it's crucial to tackle it head-on. Advanced technology brings increased accountability, and many leaders only realize the importance of cybersecurity after a breach has already happened. A single security lapse can lead to major financial losses and damage a company's reputation, so it's vital to integrate cybersecurity throughout the entire digital transformation process. Think of it as constructing a fortress to safeguard your digital realm.
Technologies that are cutting-edge today might become obsolete in just a few months, pushing businesses to build agility and adaptability into their core strategies. Leaders should stay flexible and avoid getting too attached to any single technology to prevent stifling growth.
Connect with 555vCTO.com experts to build your cybersecurity response plan
Is your company in the market for digital transformation? Could you leverage more advanced technology to scale your business? Part of that strategy is to build your cybersecurity response plan first, to create an operational framework that can detect, contain, investigate and report on cyber security incidents. Reach out today, and let’s develop a robust plan to safeguard your digital assets and ensure your transformation journey is secure and successful.