Digital transformation is a term that gets tossed around a lot these days. It's often associated with claims that organisations must undergo a journey to become truly digital enterprises if they want to remain competitive. Sounds vague as hell. So what does it really mean to be a digital enterprise? Let's find out.
There's no doubt that digital technology has reshaped the way businesses operate. But just how much companies have embraced digital technology and integrated it into their operations is an entirely separate matter.
Forrester launched its Business And Technology Leadership In A Post-Digital Era report at the Huawei Connect 2016 conference in Shanghai, China. The global report, commissioned by Huawei, showed that 73 per cent of organisations view digital technology as something they can tack onto their existing business strategy. Only 25 per cent of companies have a digital business strategy in place that aims to transform the way they work and create new sources of customer value.
Perhaps the reason why organisations fail to take full advantage of technology to transform their businesses is simply because they don't have a clear direction on how to do so.
"We are seeing a lot of consulting firms talk about how companies need to embark on this digital transformation and we are seeing many companies come up with targets and objectives to become digital enterprises. But right now, there is not so much discussion about clear targets in terms of what a digital enterprise really is," Huawei deputy chairman and rotating CEO Eric Xu said at a press conference.
Huawei is keen to play a part in defining what a digital enterprise really is. Xu believes cloud computing is the foundation of digitalisation and the key means for organisations to become digital enterprises.
Forrester's definition of a digital enterprise is clear: it's a business that doesn't just think that adding in new systems and applications equates to a digital transformation. It's a business that re-evaluates just how it should operate based on new digital technologies to bring new value to itself and its customers.
As the analyst firm elaborates in its report:
"You can no longer simply produce great products and services and expect to succeed — in a post-digital world, your business must also collect and analyse data to help design and deliver great digital experiences that create value for your customers."
To become a successful digital enterprise, Forrester notes that support from the CEO and the executive board is crucial. Everybody department in an organisation needs to play a part as well:
"Without a unified approach to digtial transformation, teams like marketing, ecommerce, business units, R&D and IT all vie for digital leadership and compete for digital resources. In an attempt to solve the challenge, some CEOs hire a chief digital officer (CDO) with a remit to champion digital transformation. But CDOs are no silver bullet. Indeed, to succeed as a digital business, every part of the organisation must adopt a digital mindset and learn to collaborate in service of customers."
Spandas Lui travelled to Shanghai, China as a guest of Huawei