Smart Entrepreneur’s Guide on Outsourcing Digital Transformation

Digital transformation refers to the cultural, organizational, and operational transformation of an industry, company, or ecosystem that involves the smart integration of digital technology, processes, and competencies across all levels and functions in a strategic and staged manner.

Digital transformation, also known as DX or DT, leverages technology to create value for customers (in the broadest sense), innovate, and adapt quickly to changing situations’ is primarily used in business, but it can also be used by other organizations, such as governments, public sector agencies, and organizations that are involved in solving societal problems such as pollution or aging populations.

Some countries, like Japan, have digital transformation plans that impact every aspect of life. This is possible with the country's Society Initiative 5.0 (which shares some similarities with the Industrial 4.0 industrial transformation vision).

Digital transformation refers to the fundamental transformation of business and organizational processes, capabilities, and models to fully harness the opportunities and changes brought about by a variety of digital technologies. It is a strategic and prioritized process that considers both the present and future shifts.

New competencies are about the ability to be more agile, person-oriented, innovative, customer-centric, streamlined and efficient, and able to induce/leverage possibilities to change the status quo. This includes big data; new, increasingly structured data sources; and service-driven revenue, with the Internet of Things being a key enabler. Leveraging business intelligence, data science, and efforts is more critical in highly commoditized markets.

Future and present shifts and changes that will require a quicker deployment of a digital strategy for transformation can be caused by many factors, including customer expectations and behavior, economic realities, social shifts, and new economic realities. altering populations, disruptions to ecosystems and industries, and accelerating acceptance and innovation regarding existing or emerging digital technologies.

In practice, the key drivers of digital transformation are end-to-end customer satisfaction optimization, operational flexibility, and innovation. These goals also include new revenue sources, information-powered ecosystems, and the creation of new value streams, which will lead to new business models and digital processes. It is important to address internal problems before you can achieve the above. These include legacy systems, disconnects, and other issues that may hinder your ability to achieve your internal goals.

Digital Transformation Roadmap

A digital transformation roadmap is a complex journey that involves multiple interconnected goals. In the end, we strive towards ubiquitous optimization across all processes, divisions, and the business ecosystem in a hyper-connected age. 

This requires building the right bridges between the front and back office, data from "things", decisions, and people, as well as various ecosystem players. It is essential to be successful in this journey.

It is crucial at all levels (collaboration and ecosystems, skills, culture, empowerment, etc.). The goals of digital transformation People don't want to be 'digital for everything' and value face-to-face and human interactions. There will always be an "offline" element depending on the context. However, digital transformation also plays a part in non-digital interactions.

PerfectionGeeks aim to fully leverage the potential and benefits of new technologies. They also help you do it faster, better, and more innovatively in the future. Digital transformation requires a planned approach that involves multiple stakeholders. This should go beyond silos and external limitations. The roadmap recognizes that the end goals will change as digital transformation is an ongoing process.

This online guide explores the essence of digital transformation, its evolution, and how it can be present across different business processes.

Digital business transformation: A holistic approach

The face of business has been changed by digital technologies and how we use them in our personal and professional lives. While this has been true for a long time, the pace at which it is occurring is faster than that of organizational transformation.

Outsourcing digital transformation is not the best way to describe the reality it encompasses. Some prefer the term "digital business transformation," which is more aligned with the business aspect. Digital transformation can be used as a broad term to describe changes that do not relate to business. It refers to evolutions and changes in society, laws, and economic conditions, in addition to the new challenges presented by disruptive newcomers. When viewed from a holistic perspective, it is clear that social changes/shifts affect organizations. They can also be disruptive. Each company, sector, economic actor/stakeholder, and every area of society is unique. It is important to always recognize the digital transformation dimension. While digital maturity models may help with vision definitions, they are too general and/or simplistic in practice.

Digital transformation encompasses many processes, interactions, and transactions. It also involves technological evolution and changes. This is why it's important to remember this when you read advice about digital transformation trends and read predictions. While there are many common traits, challenges, and goals across organizations, there are vast differences between industries, regions, and organizations. Even if you only look at regulatory environments, what might make sense in one area may not make sense elsewhere.

This guide is primarily about elements of digital transformation outsourcing. This guide is about digital business transformation. It focuses on the decentralizing shift in focus to the edges of an enterprise ecosystem. This equation includes customer experience, worker satisfaction, and stakeholder value and outcomes. partnerships and a clear customer-centric strategy.

The technological evolution and technologies that include cloud computing, big data, and advanced analytics to mobile and mobility (a game-changer) are 1) enablers of digital transformation and/or 2) game-changers.

 3) causes of the digital transformation (among other things, as they affect consumers' behavior or reshape entire sectors, such as the digitization of manufacturing)

4) accelerators of innovation. Technology is just one part of digital transformation.

Digital transformation process that involves stakeholders. These are the final miles of disruption and processes. Digital transformation can sometimes be reduced to customer experience, but this is a mistake. It leaves out many other aspects.

However, the agenda is driven by the end goals of the business and customers. To achieve these goals, the central role of an organization is to link the dots and eliminate internal silos. The central capabilities of the organization are used to make the edge work faster and more efficiently. This is true at all levels, including organizational (integrated, ecosystems), technology (an 'as a service approach'), cloud, agility enablers, and culture.

Technology and computing paradigms like edge computing, decentralization of business and work models, and other developments are all reflected in the movement towards the edges.

Consider how important data management is to analyzing capacity in an atmosphere with real-time demand increasing while cloud computing grows at the core. Also, consider the shift in security towards the endpoints and the decentralization of information management.

It does not necessarily mean that digital transformation can only be achieved in organizations with "new" organizational structures. Leadership is essential for enterprise-wide digital transformation. It doesn't matter how the organization is structured. As long as the holistic approach to the goals with the edges in view prevails over internal silos or de facto gaps between reality, perception, and reality, leadership will be required. We see pilot projects that lead to an enterprise-wide, more holistic approach being common in practice.

Bottom-up, in particular departments or ad hoc. This is a common practice in the early stages, but it can pose a risk to long-term success if it's not continued on a larger scale. It's important to remember that security is a holistic imperative. This includes a cyber resilience strategy. As data sits everywhere, attacks increase and technological environments become more complicated with increasing attack surface problems and growing software supply attacks.

Digital transformation is not a strategy in and of itself. It's a way to achieve other strategic objectives, such as business growth, innovation, a more agile operating system; great customer experience; and connected, collaborative employees (Bas Burger).

Digital transformation areas

Digital transformation can be done in an integrated and connected way that it demands. It can also touch upon:

Business activities/functions: marketing, operations, human resources, administration, customer service, etc.

Business processes are a set of connected activities, activities, and sets that aim to achieve a particular business goal. Business processing management, business optimization, and business process automation all come into play (with the help of new technologies like robotic process automation). In digital transformation strategies, business process optimization is crucial. It is important in almost all industries.

Business models are how businesses work. They include the go-to-market approach and value proposition, as well as the methods it uses to make money. It also includes the way it transforms its core business and taps into new revenue sources. Sometimes, it even affects the core business.

Business ecosystems are the networks of stakeholders and partners as well as the contextual factors that affect their business-like regulatory and economic priorities and changes. New ecosystems can be created between companies from different backgrounds based on digital transformation and information. Data and actionable intelligence are transformed into innovation assets.

Management of business assets focuses on traditional assets but increasingly on more "tangible" assets like customers and information. Enhancing the customer experience is a key goal of many digital transformation projects. Any business, technological advancement, and human relationships rely on the information. Customers and information must be considered real assets from all angles.

The organization's culture must be customer-centric, agile, and hyper-aware. This is accomplished by acquiring core competencies across all areas of digital maturity, leadership, and knowledge worker silos that allow for future-proofing. Culture can also be influenced by business activities, collaboration, and the IT-side digital transformation. Applications must be brought to market faster to make them more attractive. This is the essence of DevOps: development and operations together. To make IT and OT work together in businesses/processes/activities, change is required too (it's not just the information and operational technologies, it's the processes, culture, and collaboration). Etc.

Partnership and ecosystem models include, among other things, a rise in co-operative and collaborative, co-creating, and, last but certainly not least, completely new business ecosystem approaches. This will lead to new revenue streams and business models. The as-a-service economy and digital transformation will require ecosystems.

Approach customers, workers, and partners. Digital transformation places strategy and people before technology. It is crucial to understand the changing expectations, behavior, and needs of all stakeholders. This can be seen in many subprojects that focus on customer-centricity, user experience, worker empowerment, and changing channel partner dynamics. All of these things can be included in the picture. Digital technologies are not the only solution to any of these human issues, from customer satisfaction and worker satisfaction. Technology is an enabler, but it's not the only solution. People must be able to respect, empower, and help others.

The list is not comprehensive, and the various aspects mentioned overlap. While we do consider some less business-related "digital transformation" phenomena and so-called disruptions, the main focus is on business. This means that the entire digital transformation process must be viewed holistically.

Digital transformation does not only involve technology or disruption. It's not just about transforming for the digital age. It would be the worst. However, it is important to recognize that the digital age has existed for a long time and is still very vague.

Digital Disruption: What is Disruption?

Digital disruption is not only one of the most talked-about terms in recent years, but also refers to the industry, way of doing business, or ecosystem. Existing (mostly tech-based) companies and newcomers, or incumbents, are causing significant disruption to society. They have developed solutions, business models, and approaches that result in significant shifts in customer behavior, which will require existing players (which may include "digital businesses") to alter their strategies.

But disruption does not just involve newcomers and incumbents who use disruptive approaches. In the end, disruption is about people and customers.

However, the Internet of Things (or IoT), which allows us to move to the next stage of Internet technology, is still in its infancy. The Internet of Things is a generic term that refers to the interconnection of devices with embedded connectivity or attached connectivity, data sensing, sending, and receiving via Internet technology. It will also be the glue that enables most transformational developments. The Internet of Things has not yet provided any real innovation or tangible value for consumers. 

The Industrial Internet of Things is where the main value lies. This is because industrial markets like manufacturing and logistics are leading the transformation. This is due in part to the disruptive potential of technologies such as additive manufacturing and advanced robots.

Is there another stage? Sure, there are. For now, we are going to be fully hybrid. This includes the integration of digital technology into our human selves. Who knows what the fourth platform will look like? It's scary for many, and it will not be easy to keep up with over the next few years. But we will get there.

Ask us about the next biggest disruptive technology, keeping in mind the details we mentioned. It's the Internet of Things, along with cognitive/AI and big data analytics, as well as systems of intelligence. The hybrid stage is already in place, as an example, in an industrial context, where the cyber-physical and (industrial) IoT are key components of Industry 4.0/The Industrial Internet. The human element and value are still the most important.

Transformation and disruption: causes

Many factors can lead to disruptions and digital (business transformation) transformation.

Technological innovations (technology-induced) are more impactful than ever before. It's not technology that causes disruption or transformation, however. It is how the technology is used and adopted by customers, partners, competitors, and other stakeholders. The technologies with the clearest disruption potential are IoT technology, artificial intelligence, edge computing, virtual and augmented reality, and Blockchain. The most disruptive potential comes when they are combined and allow for new applications, as shown in the convergence between AI, IoT, and big data analytics. The convergence of IT with OT can also be a game-changer in industrial transformation.

Customer behavior and demands Technology is not the only factor causing this customer-induced disruption and transformation. When technology is adopted and made into business problems, it often facilitates or causes them. Digital transformation is not a result of technology but merely a result of other factors. Customers are looking for simplicity and ease in dealing with businesses. This is a much older example. This goes back to the days before the Internet existed. In this sense, digital transformation can simply be catching up too, since businesses don't have any other option (it's not like they didn't realize the importance of making customer interactions easy and frictionless decades earlier). Disruptions on a social level can also impact customer behavior and needs.

Invention- and innovation-inducing. Innovation and invention can create new realities. As has been the case many times before, medicine has the potential to change society and healthcare. The best place to start is in the life sciences and technology.

Ecosystem-induced Organizations are part and parcel of larger ecosystems, including the business and social ecosystems that they and we live in. Changes in economics, requests from partners that you adapt, evolutions toward collaborations in transformative business ecosystems (or the General Data Protection Regulation, for example), regulatory changes (or the transformational effect of the General Data Protection Regulation or the GDPR), geopolitical shifts, societal changes, and unexpected events like natural disasters or pandemics all have the potential to impact the need for digital change. As extensive research has shown, they can all impact the need for the new normal.

Everything is interconnected, from disruptions to business processes and models to business activity and every single activity within the organization as well as the wider ecosystem in which they operate. This is the butterfly effect at work. Consider how all business processes are interconnected, from the customer's perspective. The way information flows across all digital transformations and the economic impact they can have This is where scenario planning is crucial.

Myths and realities of transformation

Many organizations are focusing on digital transformation. To reap the same benefits, it is important to concentrate on real customer and business challenges, have an organized approach, prioritize, and include all stakeholders in any digital transformative process.

Digital leaders share a common DNA and the path to digital transformation reveals common traits, even if the context is important.

Every industry, including yours, is affected. No matter what industry, customers, employees, partners, or competitors will be waiting for the company to catch up.

Digital transformation is usually led from the top, or at least requires strong buy-in from all stakeholders if it's to succeed enterprise-wide. However, it can also happen from the bottom up and within specific projects. 

Digital transformation is everywhere.

Digital transformation is a challenge for every industry. It can affect every activity, division, function, and process of an organization, as well as the business model.

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