3 Key Areas to Drive Digital Transformation

Originally published on 21 August 2020 as “Understanding digital transformation & how it transcends to driving organizational growth“, edited by Louis Davidson including updated references.

IDC report forecasts that global spending on enterprise applications will rise from $279.6 billion in 2022 to 385.2 billion in 2025. Nearly all of this will be in public cloud services and related infrastructure. All these numbers indicate a continued strong surge in cloud and intelligent digital technology adoption as more and more companies embrace digital transformation to become agile and stay market relevant.

In this article, I want to look at three key areas that need to be considered to make digital transformation occur:

  1. As a Response to Current Changes
  2. In Preparation for Future changes
  3. To Enhance the Human Experience

1 – Responding to current changes by leveraging digital technologies

As a first step, IT and business goals need to align to channel resources into the creation of digital products and experiences which can drive growth in current markets and products. From an organizational perspective, the focus is to transform to optimize operations and enhance customer-centricity alongside the goals of managing risk and increasing revenues.

To do this, the organization needs to identify and re-define relevant business processes which can deliver desired outcomes leveraging digital technologies:

  • Customer centricity and experience – By creating innovative solutions that deliver unique experiences focusing on personalization, convenience, and ease of doing transactions, along with meeting the required privacy demands. For example, Netflix, Amazon & Spotify’s predictive hyper-personalized experience embedded in their recommendation systems is a classic case of delivering customer delight and unique experience customized to each individual customer.
  • Real time analytics – The ability to get analytics on actions almost as they occur provides immense potential to respond to changes, prepare for the unexpected, make smarter decisions, and optimize operations\tasks reducing cycle time, and allowing innovation with agility & speed. IoT sensors and devices are driving the case for real time actionable insights through streaming analytics.
  • Predictive analytics – The ability to predict future outcomes and prescribe what needs to be done in supply chain, cyber security and disaster management as early as possible can turn into a game changing competitive advantage. For example, in the oil and gas industry, predictive analytics is helping companies improve operational efficiency by proactive predictive maintenance, demand forecasting, energy trading, risk management and optimization.
  • Robotic process automation (RPA) – Automated shared services, augmented intelligence and smart automation are great ways to put digital technologies to drive operational efficiency, cost reduction, revenue growth and competitiveness. Returns processing is a common use case for RPA that we have all experienced. RPA helps companies manage returned products by automating manual tasks such as receipt of return confirmation, inventory updates, billing system updates and issuing payment adjustment to the customer.

2 – Preparing for future changes by building innovative solutions and leveraging digital technologies

The quest for creating newer innovative business models to thrive in today’s digital world is a major challenge for executives. The value proposition of newer business models, the required core competencies, and skillsets, forging strategic partnerships, understanding market forces, generating shareholder value along with providing tangible benefits to target customers is easier said than done.

So, how does an organization decide on which newer business models are promising for future revenue growth? Well, the answer is “it depends” and varies from company to company. However, reimagining business models can be done in following ways:

  • Venture into new markets and industry – Look at your products, core assets, technological capabilities, data, customers, and intellectual property that you have built in previous years. Explore options and decipher opportunities to leverage these assets to enter or disrupt other industries who may/may not be part of your existing value chain. Disrupt entire value chain by thinking out of the box and reshaping the way your products and services reach their target audience.
  • Harness the power of your ecosystem – Collaborating and integrating with other businesses in your ecosystem to provide a seamless experience to common customers. Community based sharing of underutilized resources in peer networks is another innovative way to redefine business models using digital platforms and technologies. The use case will differ from organization to organization but the potential to deliver newer innovative solutions without boundaries can surely disrupt the isolated players.
  • Use the power of your online community – Monetize the power of your online community of users and customers by mining their opinions, deriving insights, driving member engagement for research initiatives for third party organizations. As a bonus, you may also drive open innovation initiatives to find newer business models, and use cases from the larger community. For example, Facebook uses hackathons to generate newer ideas and fosters a product innovation centered culture built on open innovation inside and outside the company. Another example is SAP Ariba network, where buyers and sellers collaborate and discuss new business opportunities.
  • Outcome based business models – Create and repurpose your business model on the final tangible outcome that your organization delivers instead of mere products and services. Build capabilities to position your business as an enabler of the larger outcome and not just the product or service sold. For example, Zipcar provides on demand IoT enabled cars and trucks. Customers pay for subscription which includes gas, insurance and on demand access to cars and trucks. Their outcome-based business model uses IoT sensors to drive innovation in car rental business.

3 – Enhancing the human experience and capabilities in all spheres of business

Enhancing human experience and capabilities in all spheres of business, is indeed the most important part of the digital transformation narrative. If a change isn’t enhancing the customer experience or complementing employee expertise it may not be transformative in the true sense. It is not just these digital intelligence technologies alone that propel organizations to true transformation, but it is their interaction with humans which deem these emerging technologies game changing and revolutionary. As organizations deploy more digital technologies like machine learning, cloud, security, analytics and IoT; the workforce will need re-skilling and retooling to bridge the skill gap and drive employee engagement.

So, now that we know how we can achieve digital transformation leveraging digital technologies in current business scenario and how to create newer business models, now the question arises- what can we do to ensure the digital technology enhances the human experience?

To answer this, we need to look at intelligent process automation, use of AI in automating mundane repetitive tasks and channel employees’ time and effort in more value adding, productive tasks. Not only automation, but intelligent technologies such as intelligent analytics, IoT, voice enabled devices, virtual reality, smart wearables, integrated workflows, collaboration platforms will enable faster decision making and more transparency. And in turn drive employee reskilling and which will enhance employee engagement and productivity. Look no further than the work being done with ChatGPT to see just how far we have come, and how far we still have to go.


The digital transformation is an amalgamation of all these 3 parts and requires a digital transformation strategy that looks at goals, current situation, business context and chalks out a clear roadmap of how to move forward on all the three frontiers. The possibilities are endless, the opportunities are virtually boundless and perils of lagging behind and failing to leverage these digital technologies are grave.The onus of acting on these key focus areas and making most out of the intelligent digital technologies and redefining markets and industries lies with the executives.

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Markus Spiske Image used under Unsplash License