How Digital Transformation Unlocks Innovation and Business Value
The digital transformation ensures a radical change in the current business model to create new revenue and value-producing opportunities. But, as organizations accelerate these changes, it’s increasingly clear that traditional ideas about the business value of IT are inadequate for understanding the true value that digital now offers.
Unfortunately, IT leaders tend to focus value creation narrowly, with the result that most digital initiatives are aimed at operational improvements, instead of value transformation. However, the tactical approach to digital value can result in real process and financial improvements; the greatest potential for digital value lies in more strategic initiatives, such as creating new markets, empowering employees, changing the basis of competition, and crossing industry boundaries. This distinction between tactical and strategic is not a binary decision and IT leaders should pursue both in digital projects.
To implement this approach, it is important to recognize that digital transformation extends beyond just a technology paradigm. Digital strategy and planning span multiple business functions, technology solutions, and the enterprise ecosystem and therefore it is prudent to create a unified charter with business units and drive initiatives. In an enterprise’s digital transformation journey, they also encounter new dimensions of risk from new providers, ways of conducting business, addressing compliance, payment, and more. Thus, the balance between risk and reward tips in favor of reward in well-managed projects.
That said, global pressures also continue to demand more flexibility, greater agility, and better quality across the entire enterprise value chain. Therefore, creating a unified charter, aligning workloads to business functions, and adopting an incremental approach as part of the roadmap will optimally drive value realization towards unlocking business paradigms with digital.