The 4 main areas of digital transformation

areas of digital tranformation

How’s digital transformation unfolding?

In the ever fast-evolving landscape of innovation, digital transformation has emerged as the cornerstone of the profound change and reshaping of organizational strategies, processes and ways to leverage the potential of technological advancements. But digital transformation is not only about mere technology adoption within organizations; instead, it embodies a key shift in how businesses operate in a dynamically connected world.

But how’s digital transformation unfolding? According to Markets and Markets, the market size of digital transformation is expected to grow from $695.5 billion (2023) up to almost $3145 billion by 2030, at an estimated 24% compound annual growth rate. For what concerns the top fields of investment into digitization within this time span, there are four main areas of digital transformation to explore, involving both private and public players; let’s check them out in this article.

What are digital transformation main areas?

First of all, let’s clear what is the definition of digital transformation. According to The Agile Elephant Manifesto, this phenomenon “is the process of shifting organizations from a legacy approach to new ways of working and thinking using digital, social, mobile and emerging technologies, with a change in leadership, a switch to different thinking, and the encouragement of innovation and new business models through digitization of assets and an increased use of technology to improve the experience of employees, customers, suppliers, partners and stakeholders”. In short, a complete, smart and revolutionary vision on the future of organizations leading to digitalization.

The main areas of digital transformation are four, each one with specific features, challenges and opportunities, and they are: 1) Process Transformation; 2) Business Model and Domain Transformation; 3) Computing or Cloud Transformation; 4) Culture Transformation. Following, let’s check them out one by one in detail.

Digital transformation area N.1: changing processes

First area within digital transformation: the Process Transformation. Changing processes is the first key step to take for all organizations looking for digitization, aiming to significantly increase the efficiency and effectiveness of business operations and identify the areas of improvement to plan the right actions needed to be taken in order to achieve specific transformation goals.

How to individuate these goals? It’s simply a question of understanding the reasons related with the need of the innovation process. The good use of data and information management (read more about Data Fabric and Data Lineage) is really helpful to assess which and how current processes work, so also what changes are needed and when could be the best moment to introduce them. Implementing processes innovation is a very delicate situation, therefore is essential to share the transformation plan with all the stakeholders and make sure that support and training will be provided for a successful change within the organization.

A good example of Process Transformation is the introduction of artificial intelligence to accelerate operations into very specific fields, like human resources and cybersecurity.

Digital transformation area N.2: changing business model and domain

Second area within digital transformation: the Business Model and Domain Transformation. Changing business model means renewing how companies operate both on the inside and on the outside, so the introduction of game-changing revolutionary factors affecting firms on several aspects.

For example, a transformation of the business model may start with the implementing of a full-remote workflow with a brand new way of thinking work and the workers experience; on the other hand, changing business model may also be a question of investing funds into research and development to be ahead of competitors, exploring the market needs and find the right solutions for potential customers with the creation of new tailored products and services.

What about changing domain instead? This represents a comprehensive business transformation driven by technology and innovation with the opportunity to diversify their operations into new sectors. This transformation may enable companies to enter these sectors as a disruptive force, capable of reshaping market dynamics and assuming a leadership role by redefining rules.

Digital transformation area N.3: changing computing

Third area within digital transformation: the Computing or Cloud Transformation. Changing computing is the process of migrating business data, workloads and operations into clouding to develop a streamlined functional and organizational structure, always available and accessible by the stakeholders.

The main reasons that push businesses to explore the computing transformation refer to the significant improvement in terms of scalability, flexibility and agility, very important factors to successfully compete nowadays. The most interesting side of Cloud Transformation is the business model that move assets, services, databases, IT resources and applications into cloud systems, known as As a Service technologies.

Digital transformation area N.4: changing culture

Fourth area within digital transformation: the Culture Transformation. Changing culture within organizations is maybe the most relevant step to unfold digital transformation successfully, as is key to adopt a shared brand new mindset and define new values for an innovation-oriented corporate vision starting from the individualities. One of the most exciting examples of Culture Transformation refers to the Digital Europe Program, EU’s plan for the digitization of businesses, citizens and public administrations. For further information, read about the final agreement on European Digital Identity Wallets.

Change management is the top factor enabling the transformation of organizational culture, a strategy designed to cultivate adaptive abilities within individuals and groups and facilitate the shift to a desired future state of things, playing a key role in shaping a confident corporate and social culture to navigate digitalization, face new challenges and exploit new opportunities emerging from the digital transformation.

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