Digital transformation

For signal processing, see Digital transform.

Digital transformation (DT) is the process of adoption and implementation of digital technology[1][2][3] by an organization in order to create new or modify existing products, services and operations by the means of translating business processes into a digital format.

The goal for its implementation is to increase value through innovation,[4][5] invention, improved customer experience and efficiency.[1] Focusing on efficiency and costs, the Chartered Institute of Procurement & Supply (CIPS) defines "digitalisation" as

the practice of redefining models, functions, operations, processes and activities by leveraging technological advancements to build an efficient digital business environment – one where gains (operational and financial) are maximised, and costs and risks are minimised.[6]

However, since there are no comprehensive data sets on digital transformation at the macro level, the overall effect of digital transformation is still (as of 2020), too early to comment.[7]

While there are approaches which see digital transformation as an opportunity to be seized quickly if the dangers of delay are to be avoided,[8] a useful incremental approach to transformation called discovery-driven planning (DDP) has been proven to help solve digital challenges, especially for traditional firms. This approach focuses on step-by-step transformation instead of the all-or-nothing approach. A few benefits of DDP are risk mitigation, quick response to changing market conditions, and increased success rate to digital transformations.[9]

  1. ^ a b Mirzagayeva, Shamiya; Aslanov, Heydar (2022-12-15). "The digitalization process: what has it led to, and what can we expect in the future?" (PDF). Metafizika. 5 (4): 10–21. eISSN 2617-751X. ISSN 2616-6879. OCLC 1117709579. Archived from the original (PDF) on 2022-11-12. Retrieved 2022-10-14.
  2. ^ Vial, Gregory (2019). "Understanding digital transformation: A review and a research agenda". The Journal of Strategic Information Systems. 28 (2): 118–144. doi:10.1016/j.jsis.2019.01.003. S2CID 115202292.
  3. ^ Warner, Karl S. R.; Wäger, Maximilian (2019-06-01). "Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal". Long Range Planning. 52 (3): 326–349. doi:10.1016/j.lrp.2018.12.001. ISSN 0024-6301. S2CID 158197061.
  4. ^ Schmarzo, Bill (31 May 2017). "What is Digital Transformation?". Archived from the original on 2019-11-30. Retrieved 9 July 2021.
  5. ^ Wren, Hannah (1 December 2020). "What is digital transformation? Definition, Examples, Main Areas". Archived from the original on 2020-12-02. Retrieved 9 October 2021.
  6. ^ Chartered Institute of Procurement & Supply, Digitalisation in procurement and supply 2020, accessed 13 August 2023
  7. ^ Kretschmer, Tobias; Khashabi, Pooyan (August 2020). "Digital Transformation and Organization Design: An Integrated Approach". California Management Review. 62 (4): 86–104. doi:10.1177/0008125620940296. ISSN 0008-1256. S2CID 221042306.
  8. ^ KPMG, Future-proof procurement - Now or never: the big procurement transformation, published April 2016, accessed on 20 June 2024
  9. ^ McGrath, Rita; McManus, Ryan (2020-05-01). "Discovery-Driven Digital Transformation". Harvard Business Review. ISSN 0017-8012. Retrieved 2024-03-26.