Digital Transformation Archives - Argility Technology Group

Is it digitisation, digitalisation or digital transformation?

ajustus Feb 9, 2023 Digital Transformation, Digitalisation, Digitisation

In the ‘digi-world’, companies are confusing these terms in ways that short-change the power and importance of digital transformation.

By Tanya Long, Chief Operating Officer – Argility Technology group

There is, of course, no such word as ‘digi-world’ but from the outset, I think you get the drift. What company is not scrambling to keep abreast of the latest digital transformation strategies aimed at effecting significant change in business operations?

You’ll note I don’t talk about companies ‘considering’ digital transformation. The reason for that is clear – the digital horse is well out of the box and any company not, in 2023 (post- the pandemic/remote working and more) in the throes of digital transformation is probably destined for the scrap heap.

But it can be a daunting prospect in terminology alone. We have digitisation, digitalisation and digital transformation. I will outline the differences between them and show how this is anything other than an argument in semantics.

Each one is often interchangeably and inappropriately used, with people using one but then clearly meaning another. I will also shed light on where it is all headed and what it can do for businesses.

Let’s kick off with a definition of each term.

Various sources, including Gartner, describe digitisation as the process of changing information from analogue to digital form, also known as digital enablement. Whereas digitalisation as a term is accused of being fraught with ambiguity, but is defined as the use of digital technologies to change a business model and provide new revenue and value-producing opportunities, it is the process of moving to a digital business.

Each one is often interchangeably and inappropriately used, with people using one but then clearly meaning another.

In short, migrating from analogue to digital: digitisation relates to information, digitalisation relates to processes.

Let’s move on to digital transformation, which McKinsey defines as an effort to enable existing business models by integrating advanced technologies. It allows digital technologies to be integrated into already existing business models, changing the way the company operates and delivers its product or service.

Hopefully, at this point, you are not feeling even more muddled because, as Forbes notes, companies confuse them at their peril. So, as can be seen from the foregoing, all three of these terms have distinct meanings but again, I confirm this is more than an argument in semantics.

Forbes emphasises that in reality, people are confusing them in ways that short-change the power and importance of digital transformation, thus putting the very survival of their organisations in peril.

It explains that a company may undertake a series of digitalisation projects, from automation through to employee retraining, but that is not digital transformation, which Forbes notes is not something that organisations can implement as projects.

Instead, this broader term refers to the strategic business transformation that requires cross-cutting organisational change, as well as the implementation of digital technologies.

Digital transformation initiatives will typically include several digitalisation projects, but again Forbes emphasises that executives who believe there is nothing more to it than digitalisation are making a profound strategic mistake.

Each of these terms is required for different actions/scenarios in a business, but are not enough in themselves to drive the next action. The real distinction is that digitisation and digitalisation are about technology, whereas digital transformation is about the customer, and on that note, all sources are in agreement with Forbes.

Where my opinion differs is that none of the definitions brings disruptive technologies into the picture.

If digital transformation has turned the business world on its head by revolutionising how companies do business with their customers and above all how their customers interact with them, what have disruptive technologies done? Think about it the next time you tap your phone to order a taxi.

So, yes, digital transformation is a reality that businesses today are forced to embrace, plan for, or risk being fired out of the market by competitors that are getting it right.

But it is the digital disrupters such as blockchain, artificial intelligence, the internet of everything and more, that are having the greatest impact.

Of course, all of these terms eventually end up interwoven, with all roads leading to a successful and agile digital transformation implementation – without it, there is little hope of being a market disrupter.

Let’s break down what’s driving digital transformation and what are the caveats on the journey.

Unquestionably changing consumer demand is at the top of the list. Customers today have the power of choice that is enabled by digital technologies, and they wield it like a weapon and quite rightly so.

Service, convenience, user-friendly interactions are all top of their – not a wish list – but rather their demand list.

Changing technologies and evolving competition in markets where businesses capable of embracing change and focusing more on customer-driven strategies are capturing, keeping and growing their businesses. Companies with the vision to transform and in doing so, see opportunities before they turn into imperatives for sustainability are winning.

Two factors are highlighted as the biggest obstacles to successful digital transformation journeys: poor change management and not focusing on the crucial customer experience.

Strategic planning that aims to apply digital technologies – across all aspects of the business – is essential if companies are to meet ever-changing customer demands.

Digital transformation is about removing customer effort and frustration, being relevant and providing hassle-free convenience. It is the ability to be agile and take a holistic look at the entire customer experience.

In a nutshell and to again refer to Forbes, we digitise information, we digitalise processes and roles that make up the operations of a business, and we digitally transform the business and its strategy.

Source: IT Web

Tanya Long, Chief operating officer, Argility Technology Group.

Long has 30 years of industry experience. Her career in the IT sector started in 1988 in IT support for point-of-sale solutions. She moved formally into software development with UCS/Argility in 1989 as a developer and progressed through to team leader, account management, project and development management roles, which led her into various industries and corporations.

In 2017, Long returned to Argility (having previously worked at the company in a technical capacity) as human capital executive, where she reunited her retail, IT, leadership and HR knowledge to drive her zeal for transformation.

In her capacity as COO, Long is responsible for overseeing operations, with a specific focus on human capital, sales and marketing, and ensuring the company culture and vision shows up daily for customers through an engaged technical team of experts.

Using data to discover the future of retail

ajustus May 19, 2022 Artificial Intelligence, Data, Digital Transformation, PredictRetail, Retail

As business digitalisation continues apace, more and more data is being generated. Retailers need to understand its value and how to leverage it.

By Tanya Long, Chief Operating Officer, Argility Technology Group

Digitalisation has been growing for many years, and the social and business changes driven by the global response to the COVID-19 pandemic have accelerated it.

Hybrid working models that involve increased working from home get a lot of the limelight, but equally significant has been the definitive growth in online retail.

For example, e-commerce in the US increased from $431.6 billion in 2020 to $469.2 billion in 2021, with shopping habits looking like they have permanently changed to include a growing online proportion.

The move towards digitalisation across all industries has resulted in record levels of IT spend. Gartner forecasts that worldwide IT spending will jump by 5.5%, its biggest increase in more than a decade, to reach $4.5 trillion in 2022.

Unsurprisingly, given that data is the major by-product of digitalisation, a hefty proportion of that spending is going on big data and business analytics. Investment was projected to reach $215.7 billion at the end of 2021, with a compound annual growth of 12.8% until 2025.

These are all big numbers but, as always, much of that spend does not necessarily result in bottom-line benefits. There’s a lot of focus on collecting data but turning it into insights that generate business benefits is rather more hit and miss.

Effecting that transformation requires not only a profound understanding of the technology involved but, even more critically, how the particular industry sector works.

Goldilocks technology

It seems as though we’ve been talking about data warehouses and business intelligence forever, and business is littered with projects that never really lived up to expectations.

What’s changed is the emergence of new technologies that make it possible not only to collect and store vast amounts of data, but also to process it to extract valuable information.

Thus far, predictive analytics is not a crystal ball, but if one believes half the hype one reads, that could happen in the distant future.

Perhaps the most important of these is the cloud itself, because it provides a way for companies to access the plentiful and cost-effective storage they need to deposit huge and increasing amounts of data, and also the sheer computing power needed to process and analyse it − think artificial intelligence (AI) and machine learning (ML), both used to turn data into information.

As always, though, technology is only part of the story − and not necessarily even the most important part. The real point is that the cloud’s resources make it possible to mine data for patterns, deploy sophisticated statistical models and create models on which to base decisions.

In short, the real story is data and what it can be used to do. There are basically three ways in which data can be used, namely: to describe, to diagnose and to predict. The first two are backward looking: using data to establish what happened (descriptive), and then to understand why it happened (diagnostic). Both are obviously very valuable and can be used profitably to improve future performance.

However, the real benefits come when one starts to be able to use data to look to the future − what is usually called predictive analytics. It uses AI, ML, data modelling and the rest of them to analyse current data and make predictions about the future.

Of course, one has to understand this approach is predicated on the assumption that the future derives from the past, and thus that the past contains the seeds of the future.

Predictive analytics thus becomes less useful when change is highly disruptive, and also the further into the future one goes. The further forward in time one goes, the greater the tendency to regress to the mean, to become more and more generalised.

Clear benefits

Thus far, predictive analytics is not a crystal ball, but if one believes half the hype one reads, that could happen in the distant future.

But it does offer an evidence-based − or data-driven, to quote the industry jargon − way to identify how the near future is likely to unfold, and what actions a specific business should be taking to defend its current position, or to take advantage of new opportunities.

In this way, it can help an organisation to move away from the challenge of choosing between a large number of 50% probabilities, to choosing between a small number of high probabilities.

This is an extremely valuable strategic tool given the growing complexity of the business environment, and the intense competition fuelled by the globalisation of markets and a volatile economic environment.

All of these combine to create what is known as a VUCA world − one that is volatile, uncertain, complex and ambiguous − and so the company that is able to develop a likely-to-succeed strategy based on evidence rather than intuition is already better positioned than competitors.

In certain environments, organisations have experienced that business intelligence delivers a return on investment of 80%, which just goes to show the importance of data-driven decision-making − but the return can shoot up to 250% when predictive analytics is used.

The reason for this startling increase is that decisions are taken based on the rigorous analysis of fact and not on intuition.

The frustration for CFOs when considering the investment in AI and ML is that actual guarantees on ROI is not set in stone, the statistics come from passageway talk about successful projects. But there is no doubt the success is there and that the benefits abound.

Retail is a particularly VUCA sector because it straddles both the real and digital worlds, and consumers are growing ever-more demanding. For them, as I will explore in my next article, predictive analytics is especially attractive.

Source: IT Web

Tanya Long, Chief operating officer, Argility Technology Group.