Digital Transformation Still Has a Long Way To Go

While digital transformation might seem like a decade-old buzzword, it actually is changing the world in the present day. And as more processes and solutions become digitized, the complexity of aspects to monitor increases. But what exactly is digital transformation?

Digital Transformation – A Definition

I quite like the definition of digital transformation found on Techopedia, simply because of its simplicity:

Digital transformation is the changes associated with digital technology application and integration into all aspects of human life and society. It is the move from the physical to digital.

But digital transformation is not just the conversion of analogue to digital; it's also the changing of business and organizational processes within organizations, industries, and markets to accommodate technological changes. In modern terms, digital transformation also includes improving productivity through improving the mobility of resources and implementation of Artificial Intelligence in processes. 

The Current State of Transformation

While digital transformation has been happening for most of the 21st century, it still doesn’t mean that the process is as far along as it could be. In fact, the reality is far from that. As McKinsey Digital noted in a 2016 report, at least a part of digital transformation is the extent to which sectors and companies invest in digitization. And in these terms, the view of digital intensity does not look that great. McKinsey analyzed factors like digital assets, usages, and workers associated with digitization tasks, and were able to calculate the percentage of the digital potential for several regions. According to the study, back in 2016, the USA was operating at 18% of its digital potential.

If you don’t think that sounds so impressive, consider the European region, which as a whole was operating at 12% of its digital potential. Drilling down even deeper: France was at 12%, UK at 17%, and Germany at a paltry 10 percent. While these numbers will surely have increased over recent years, they give an indication of how slow the pace of digitization has been.

More current reports, like this one from IDG in 2018, indicate that 45% of business leaders or IT people surveyed admit their companies are still in the very early stages of digital transformation. 

The Challenges of Transformation

One of the most surprising things about the low rates of digitization is that digital transformation has been proven to increase revenue. This can be seen in the same IDG report quoted above: 32% of IT decision-makers said that digitization has already helped them achieve revenue growth. If this is the case, why isn't transformation happening more intensively? 

Well, the challenges are not insignificant. Probably the most dramatic is that digital transformation often requires a cultural shift; structures that used to work may not be so efficient when new technologies are implemented, and there is often a learning curve and a general process of change that can disrupt employees. Then there is the issue of obtaining knowledgeable resources for the transformation. Last but not least, digital transformation requires a dedicated budget, so if transformation is not part of the executive strategy, then the budget will probably be insufficient.

What Does Digital Transformation Mean for IT Professionals

For the companies that are moving forward with digital transformation, the technologies that are currently driving the transformation are cloud computing, Big Data, IoT, and Industry 4.0. In the near future, AI, Machine Learning, Software Defined Networks and Software Defined Storage will increasingly become part of the digital strategy for companies. 

Obviously, IT professionals will be at the forefront of any digital transformation process. Depending on the technology, it could mean a lot of preparation tasks (like preparing network bandwidth to handle the massive volumes of data required for Machine Learning). It also means learning new technologies and the infrastructure that supports them. 

The additional challenge for IT professionals is that transformation generally brings a more complex IT environment. And, as always, monitoring needs to play a part of that as the potential points of failure increase.  

Monitoring Digital Transformation

Next week, I will take a closer look at a good example of digital transformation put into practice, and how a monitoring solution can be implemented to make managing the new technology and its underlying infrastructure easier. 

Where is your company in terms of digital transformation? Are you well on your way, or just getting started? Or is this just another term for something that already existed, namely technological progress? I'd love to read your comments below.