The world is undergoing a digital transformation, and business is not exempt from this trend. Digitalization is influencing and changing processes and transactions in all aspects of life at an ever-faster rate. But what does the digital transformation mean? What has caused it, and how does it affect business?

Changing the way business works

The digital transformation has been called the third great wave of invention and economic disruption after the development of industry and electricity. In economic terms, it is changing the way people think about business and the strategies they use to deliver business results. Above all, it is a question of direction and strategy, rather than technology, as the name might immediately suggest. Digitalization provides businesses with new methods of delivering business results.

This transformation is a continuous process, without a specified ‘end point’. Instead, it encourages businesses to move away from traditional, inflexible ways of doing things, and towards a more agile approach. This provides greater opportunities to adopt new methods that can deliver results and meet shifting requirements. Business agility allows greater visibility between information silos within a business, and enables greater teamwork between them. Increasing visibility and teamwork can then remove such silos altogether. In this way, digitalized strategies can improve all aspects of business performance, including employee productivity and the efficient use of business assets.

By the end of 2017, two-thirds of Global 2000 companies will have digital transformation at the center of their corporate strategy.

IDC, ‘FutureScape: Worldwide Digital Transformation 2016 Predictions’ (2015)

Common characteristics

There are no definitive steps along the digital transformation path. However, the businesses with the most successful digitalization strategies all share one characteristic in common – the whole workforce, including leadership, have embraced the digital mindset, and recognize that older, less flexible strategies are inadequate for today’s accelerating rate of change.

85% of enterprise decision makers feel they have two years to make significant inroads on their digital transformation before suffering financially and falling behind their competitors.

Progress, ‘Are Businesses Really Digitally Transforming or Living in Digital Denial?’ (2016)

Many businesses possess the necessary technology without having an adequate digital transformation strategy. A true digital transformation requires a complete change in how the business is run, not just the simple addition of technology to existing practices.

Most importantly, because digital transformation is global in scale, it cannot be ignored – businesses must adopt it. Every market in every industry has been impacted, across customers, channels, competitors and products. There is no benefit in standing still when the rest of the world is moving forwards, and the increasing global spread of digitalization means that traditionally-run organizations will not just suffer worsening performance, but will have no markets in which to run at all.

Data is the key

The digital transformation is both driving and being driven by an evolving business relationship with the customer and end user. The key catalyst is data – digitalization is unlocking vast quantities of data that can enhance and personalize the user experience, creating greater value for the customer and driving greater business return. Business applications and services are merging together in this data-focused environment, because the more a business knows about its customers and users, the more personalized and appropriate its services can become. Users no longer adapt to the business’ applications and services; instead, applications and services must adapt to the user.

B2B companies with a strong digital strategy have boosted revenue growth fivefold and profitability eightfold.

McKinsey, ‘How B2B digital leaders drive five times more revenue growth than their peers’ (2016)

Therefore, the business that focuses its strategy around digitalization will reap the rewards from generating more value for their customers and users.

Networks and data

How does this specifically affect network management? Traditionally, network operations were driven solely by internal demands from within the business, but now they need to respond to external, customer requirements. Connectivity and visibility both for and with the user cannot be achieved unless the network behind it adopts the same agility.

By 2018, 80% of B2C and 60% of B2B companies will have created connected experiences for customers, partners and employees.

IDC, ‘FutureScape: Worldwide Digital Transformation 2016 Predictions’ (2015)

What the user wants and expects is always changing, meaning that data collection and interpretation becomes a continuous activity that only an agile network can undertake. The digital transformation has made user demands more dynamic and expanded the potential for business response; the user now expects more than just a product – they expect an outcome and an experience, because digitalization is increasingly unifying different aspects of people’s lives, where no one part is entirely separate from any other. If a business cannot match the dynamism of the user’s expectations, it will be left behind by its rivals that can.

Data is now everyone’s responsibility

As a result, data has now become everyone’s responsibility, and data collection and interpretation needs to be a primary activity across the entire business. With every aspect of business depending upon data for better results, the network has become key to a business’ success. A strong and well-supported network infrastructure is a major competitive advantage, because it provides the most useful data required and the most relevant insights necessary to create value for end users and enables faster and more well-informed business decisions.

As the world moves towards an information-driven economy based on data, the digital transformation compels businesses to adapt new approaches or become irrelevant. By nature, digitalization is disruptive and continually obsoletes existing processes. In doing so, it demands that businesses disrupt their own strategies, so that they can respond to the demands of the new driving influence in their industry – the end user.

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