What Is Digital Transformation? What Do CIOs Need to Know?

Digital Transformation

As COVID-19 continues, Digital transformation is more compelling and urgent than ever before.

Digital Transformation was born when businesses ditched filing cabinets and manual processes. But, alongside technological advances, Digital Transformation has evolved over the years.

Technology continues to reach new heights. So, enterprises must adopt more advanced Digital Transformation strategies to keep up.

Executives tasked with Digital Transformation are focussing on specific, digital enable-able objectives. Particularly objectives that will support their companies’ sustainability. These objectives include the large-scale adoption of new ways of working.

Initiatives to deter cyber-attacks on workers’ networks have attracted some recognition. This is especially evident with first-time remote work. They are also improving digital commerce and marketing capabilities. Last but not least, increasing automation in operations and the supply chain.

Are you searching for details that CIOs need to know about Digital Transformation? We have all the details you need to keep up to date.

What Is Digital Transformation?

Digital technologies were once used as cost-cutting tools. Industry-wide CEOs now realize that digital has far more revenue potential.

Most recent Digital Transformations have included their primary goals. These being customer-facing initiatives such as digital marketing, personalization, and customer experience streamlining.

Let’s learn what is Digital Transformation below:

  • To improve business efficiency, Digital Transformation introduces a radical rethinking of the enterprise. It questions how it uses technology, people, and processes
  • The transformation will entail sweeping changes to business models. As well as revenue sources and reduced cost structures. Changes in consumer demands and market preferences guide us through this
  • The on-demand economy has contributed to creative businesses. Also with incumbents, and startups, embarking on digital transformations
  • Companies are aiming to speed up creativity. Also, experiment with new digital services and capabilities. That is to increase existing products or slip into adjacent markets. Also, to avoid outflanking by more nimble rivals

These new platforms become crucial to business continuity. And, this development will spread to other business areas.

So How Can Businesses Speed Up Their Digital Transformation?

The answer lies in creating a blueprint. That blueprint must capture the enterprise “as-is” processes and tools. It also contains “vision statements” to do the identified goals. The blueprint should have defined steps to transform the Enterprise to digital mode.

But, Digital Transformation also brings new challenges. These being the constant challenge of the status quo. Another one is the application of new market tactics to stay competitive.

Enterprises often need to adopt disruptive business models. This means supplying consumers with services that suit their wants and needs.

Innovative strategies and disruptive business models are being employed by many organizations today. That is to create new markets and increase their customer base. As a result of this dynamic landscape, healthy, well-organized change management is critical.

Drivers of a Successful Digital Transformation

Many Enterprises starting their Digital Transformation will create more than once. Only one-third of companies achieve their transformation in the first round.

The biggest hurdle is the need to navigate the transformation journey. Especially in the new world, we find ourselves in. Transformation is challenging. That is because new technologies are taking shape around us at warp speed.

Digital Transformation doesn’t happen overnight. It can be a lengthy process that requires support from the top. Designing transformations that incremental, cost-effective, and sustainable are important.

That means focusing on results: new products, enhanced procedures. Also, on other use cases that allow Enterprises to build capabilities. And the business value and buy-in for the transformation, one process at a time.

What Is AI-driven Digital Transformation?

Artificial intelligence (AI) affects every industry and impacts human behavior. The primary catalyst of digital development is artificial intelligence. These include big data, robotics, and IoT. 

In the interest of clarity, AI encompasses the following technology spaces.

  • Artificial Intelligence
  • Machine Learning
  • Big Data Infrastructures
    • Data Lakes
    • Data Warehouses
    • Log Files
    • Cloud Computing
  • Data Analytics
  • Process Discovery and Automation
  • Predictive Analytics
  • Natural Language Processing (often referred to a fuzzy logic)
  • Log and Sensor Data
  • Internet Of Things (IoT)

One or more of the above technologies builds the state of AI-driven Transformation. AI’s uses are more and more for technological innovation and transformation.

Areas of an AI-Driven Digital Transformation

AI is a broad IT sector concerned with the construction of smart machines. These computers are capable of executing functions that usually imitate human intellect. 

AI-Driven Transformation involves systematic and large improvements in customer outcomes. These are in some or all the following areas of an enterprise:

  • People
  • Process
  • Tools

Every transformation is dependant on people and culture change. It is also dependant on process redesign and tool re-engineering. These three components are critical but not identical. The people and culture change required for Digital Transformation is an important aspect to manage. They may be more important than the tools and processes changes.

Marketing and Digital Channels

Assess the value of current marketing instruments and channels. Scrutinize the Enterprise websites, social media, automation tools such as CRM. Also, with platforms for analytics and customer databases. Opportunities to increase the leverage of these platforms is the intent.

A thorough systematic review of these channel instruments will ensure an adequate foundation. That is for driving change on the Enterprise Channel management.

Advanced perspectives from improved channel analyses can help you shape your growth plan.

Operational Change

Start your operational change by asking several critical questions:

  • Do we understand how our customers engage with us now and how they will continue to connect with us in the future?
  • How are we going to offer customers the experience they want? No matter what interactive channels they use
  • How do we speed up our procedures to find different ways for improved performance?
  • Will our culture become versatile enough with customer interaction through continuous change?

Capturing the digital opportunity requires an even greater operations-management discipline. Automated operation processes make this new-found discipline easier to sustain.

It allows for faster data access, quicker turnaround times, and operational cost reduction. It also allows minimizing process or information flow complexities.

It also reduces risk, fraud and helps with intelligent procurement. It also allows for intelligent and predictive inventory management and optimized production schedules.

Back-Office Integration

CIOs soon understand that processes remain constrained without adequate and streamlined back-office functions. Also, constraints in attempts to transform customer-based applications.

To produce key data and intelligence, we need Digital interconnectivity. That data is available to operations related to pricing and product availability. Also available to logistics quality, financials, and more.

IT Infrastructure

Enterprises undertaking Digital Transformation need a scalable, resilient, and secure digital infrastructure. That is to keep up with demand.

Critical Transformation streams are:

  • Data storage
  • Cloud definitions
  • Data curation
  • Data quality
  • Data governance
  • Data security and the like

Digital Infrastructure defines a focus on enabling business agility and powering user experiences. These experiences are what drives customer engagement and loyalty.

HR and The People

Thoughts are that Digital Transformation and automation will reduce the need for people. This is not so; in fact, the opposite applies. The transformation of HR is not all about the people. It is a symbiosis that involves transforming the Enterprise as a whole.

Practices and processes such as:

  • Recruitment
  • Personal development
  • People change management

These come under the spotlight in any well-planned transformation program.

Keeping the people in mind can make it so much easier by considering the following:

Practices and processes come under the spotlight in any well-planned transformation program. These are recruitment, personal development, and people change management. Keeping the people in mind is so much easier by considering the following:

  1. Establishing a clear goal set
  2. Getting the correct buy-in – top-down and bottom-up
  3. Keeping it simple – don’t overcomplicate it
  4. Prioritization – you can’t do it all at once
  5. Assess impact and performance at regular intervals
  6. The impact of culture change on the enterprise

Cultural change is often the most challenging part of the transformation process. This is for organizations seeking to become more adaptive and innovative.

Culture permeates all organizations. It has the capacity to support or destroy even the most critical initiatives for change.

Reporting and Measuring

Digital Transformation managers will be able to focus on qualitative analysis. They must draw valuable conclusions that will help the organization’s instruments and tactics.

The preparation of reports requires work. Being automation of data collection and representation in dynamic and efficient dashboards.

What Process Improvements Are Expectations For Using Artificial Intelligence?

It will be important to define the parts of the Enterprise that are, in practice, automated with AI. There may be some parts that cannot transform using AI.

Analysis of Existing Processes

The gathering of information is necessary. That is to optimize the effort and complexity of the transformation process. It includes but is not limited to:

  • Identifying and prioritizing the processes that need changing
  • Gaining an improved understanding of data flows
  • End to end customer interactions, in the form of scripts
  • Identification of the parts of the Enterprise that are actually automatable using AI
  • The integrity of data for manual or automated decision making
  • The current capability of the IT infrastructure and its scalability

Infrastructure Analysis is a model of maturity that enables stakeholders to measure performance. With it, you can measure the efficiency and effectiveness of the technology infrastructure. Then, use it to propose modifications, whether small or radical.

A good infrastructure analysis will allow the program to better use its infrastructure to meet its business needs.

Formulating a Transformation Vision

Prepare a mission statement after a thorough review of the transformation criteria. That statement outlines the short, medium, and long-term goals of the transformation program. It also outlines how AI integrates into it.

Some of the critical elements of a good AI vision statement should include:

  • Explicit descriptions of many AI initiatives across the enterprise
  • Agreement for the frequency to review the AI vision statement
  • Arrangement of milestones and deliverable review points

The mission statement will help shorten the Transition program. The vision must be flexible enough to adapt to future changes and requirements. The vision must be flexible enough to adapt to future changes and needs. 

A well-publicized and communicated vision will enable the Enterprise to avoid silo-ed initiatives. It will offer a more unified and collaborative approach to the Transformation Programme.

Preparing Road Maps

With a blueprint and a vision now prepared and communicated, it is time to develop the AI transformation roadmap – how to get there.

  • The road map details specific steps required to achieve the vision of transformation
  • That road map becomes the enterprise’s dynamic and living architectural blueprint
  • Identifies the opportunities for automation, data integration possibilities, and different use cases. All this delivers a quicker return on investment
  • The roadmap prescribes in quantifiable terms any requirements and dependencies on infrastructure. It also shows data growth, master data analysis, and outcomes
  • The AI-digital transformation road map covers the entire organization, from top to bottom

It has precise details of decision-making levels and delegations of authority. You cannot outsource the establishment of a Core Team AI-Driven Organizational Transformation. Facilitation must be the only outsourced activities. 

Establish an empowered core team to co-ordinate and drive adoption. The core team must also check and measure progress. Thereafter, review and amend the roadmap and ensure scalability.

Benefits of AI-driven Digital Transformation

The sheer scale of Digital Transformation has made AI an absolute must-have.

AI will be invaluable in building an informed, dynamic enterprise transformation roadmap. While warning stakeholders of upcoming technological advances that will influence potential future decisions. And will highlight emerging dependencies.

Some of the critical benefits of AI-based Digital Transformation include:

Breaking Down Silos

The majority of transformation initiatives are project-based. These initiatives result in silos spreading across different departments of the enterprise.

Implementation of an AI-driven organizational roadmap leads to a unified approach. By bringing together independent initiatives. These result in cost efficiencies and sharing of knowledge.

It also highlights the efficient cross-and upselling increased return on investment. Don’t forget speed to market as well. The organizational data combined in a single data source results in an improved ROI.

Better Dynamic Analytics

Using AI results in a single source of the truth. Relevant and unified views of data enhance corporate decision-making. That results in efficiency improvements in the roll-out.

Speed Up Analysis

Two of the main reasons for the lag in decision-making are data duplication and data hygiene.

AI brings a unified landscape for data analysis in faster processing and decision-making. All this affects customer satisfaction and enhanced operational efficiency.

Define New Customer Experiences

Enterprises can now get an accurate definition of the preferences of customers. They can define their experience using AI-based Digital Transformation methodologies. That leads to more precise customer understanding. In-depth details and behavioral traits support them.

Fast, Simplified Decision Making

The onset of the age of information and the need for transformation to survive is here. That has altered how changing business activities roll out. It has also changed the monitoring and management way.

There has been a new paradigm shift. That is, requiring business managers and managers at all levels to understand this. That information is an integral asset needed to achieve and sustain business excellence.

Using the correct KPIs will open Enterprises to speedier transformation. Good well-thought-out KPIs are effective in removing barriers.

The State of Digital Transformation

In the past year, many companies have come under tremendous pressure to adapt and survive. Digital Transformation programs are focussing on specific goals to support business recovery.

Stakeholders have questioned how transformation is transformative. A pattern has begun to emerge. Those with transformative aspirations find that boil-the-ocean systems rarely meet their goals.

Whereas well-planned and targetted transformation programs often deliver more comprehensive benefits. That is especially true of initiatives that reform core business processes.

Transformation usually means moving from one fixed state to another. The path from inflexibility to “permanent agility” has to go through the transformation. You may need to make new developments in programming and infrastructure, to get there.

The most significant rewards come from reimagining workflows to accommodate the continuous change. It is also establishing mechanisms that measure results on an ongoing basis.

Digital technologies were once used as cost-cutting tools. But across the board, CIOs are coming to realize that digital has far more revenue potential. Digital Transformation decisions are becoming embedded in the heart of the business.

COVID-19 has put companies on a digital trajectory that is new and accelerated. If this progresses, the transformation will become the most significant strategic advantage.

Top Challenges to Digital Transformation

Digital change efforts may also contribute to reduced awareness in the corporate environment. As well as fewer checkpoints powered by humans and exposure to new types of threats.

Reduced Visibility

Enterprises have less control over what data they can gather. That is especially so when a third-party company hosts the infrastructure. On-site hosting provides good visibility and the ability to control conditions.

Vendors can provide some rules and reports. But these are not to the same degree as when a business manages its infrastructure.

Cutting Humans Out

Human workers are accountable for many, if not most, of the safety issues in an enterprise. That can happen as such:

  • When making data capturing mistakes
  • Enabling security controls
  • Opening phishing emails
  • Clicking on malicious links
  • Falling for scams
  • Insist on using the same insecure passwords everywhere

Reaching Compliance and commitment to regulations are, more than ever, in the spotlight. Enterprises need to measure and communicate.

Enterprises need to measure and communicate transparently. They need to know how fully they are being implemented.

It is not enough to convey their intent to obey laws and policies.

What Is Security’s Role in Digital Transformation?

CIOs and CSOs have an essential role in ensuring the enterprise transformation strategy. They need to include a comprehensive cybersecurity plan.

Digital developments kicked into a higher gear two years ago. Introducing new protocols at a breakneck pace, leaving security issues in the dust.

As IT and industry tracked projects such as Agile and DevOps to speed up market speed. 60% of Digital Enterprises will experience significant technology disruptions by 2020. That was Gartner’s prediction.

That was due to the inability of security departments to address digital risks.
As anticipated, high-profile security lapses ensued. But it is difficult to identify if the leading cause was digital ventures.

See the quote by Pete Lindstrom, vice president of security research at IDC. “Regardless of whether highly publicized breaches were directly linked to Digital Transformation.” He continues, “They got business leaders thinking again about risk and solutions that minimize risk.”

A survey by Marsh & McLennan of 1,500 executives has exciting results. 79% of global executives say cyber protection is one of the company’s top risk priorities in 2020.

The role of the CSO in digitalization has increased in awareness and participation. These in earlier stages of the design process for Digital Transformation.

Security’s Challenge

IT decision-makers count cybersecurity among their top considerations. Their second biggest expenditure goal at 35%. Below the cloud at 37%.

Investments in revolutionary technologies would be useless if they are inadequate to protect the company’s customers. Or other critical properties. Yet even the most significant security operations tend to be threatened by the difficulty and pace of growth.

Transformational technologies bring new connectivity and data sources. It also poses vulnerabilities to companies and vendors who need protection.

In a survey of Fortune 500 Businesses, 62% of IT security and C-level staff responded. These said that digital transition resulted in at least one data breach. 55% of respondents said they were liable for at least one of their offenses. One source of the added risk is the is as a result of increased dependence on third parties.

58% said they do not have a third-party cyber risk management policy. 56% of C-level executives said they did not know if third parties had policies and procedures in place.

IT Protection and C-suite misalignment is the cause for bugs across digital programs. That is according to the Ponemon study. Only 16% of respondents said that there was no alignment between IT and Lines of Business.

Transform Security Teams

The challenge for security teams is how to add safety at the speed of digital transformation. All the while ensuring that security spans all new organizational digital processes.

Reorganization achieves that. For example, getting testing done by the software engineers who wrote the code.

Putting Transformational AI to Work

Digital Transformation is a catalyst on how businesses bring value to their clients. A dynamic and ever-changing market climate brings that value. AI is one of the critical enablers of transformation in many sectors.

Creating customer relationships during the period of transition focuses on using new technologies. Also, to change business processes while addressing customers changing needs. That is where here that AI comes to the table.

AI will let enterprises become more creative, agile, and adaptive than ever before.

AI positions itself as one of the most influential Digital Transformation drivers. Working together with the simplification of dynamic processes and structures. The expectation of speed and ease, and cost optimization also comes into play.

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