Digital Transformation Terminology Made Easy: Dropping the Buzz

App Modernization
Digital Transformation
10 min read

Okay, let’s face it: the trend of switching to digital doesn’t sound like much news. Humanity hasn’t quite been completely in the dark about it for a while. Take a step back to, say, the 50s, and notice IBM being busy making the digital great. Remember the internet revolution of the 80s? Unbelievably, we didn’t even know the digital transformation definition.

As if all these years none of tech innovation efforts had something to do with transition to digital. Regardless, the last decade’s technology landscape changes were seen by many as pretty tectonic. To name the looming struggle that enterprises were to accept in order to keep up with the changes, there was a need in a big term, other than innovation.

And just like that, to make it sound a little more 2000s, contributors emphasized the phenomenon’s grandeur with the somewhat buzzy digital transformation. But anyways, the process behind it is truly bigger than just implementing tech-enabled solutions. Okay, now we’d go for a proper explanation.

Table of Contents

  • So what is digital transformation in the first place?
  • What’s with the "digital transformation" usage?
  • All digitish, tons of ‘-ation’. Is there that much of a difference?
  • How exactly does digital transformation magic work?
  • Digital transformation stats to be aware of
  • Trends to factor in while building a digital transformation strategy
  • Hit the road with an informed digital transformation strategy

So what is digital transformation in the first place?

In itself, the term digital transformation denotes being on the cusp of a fundamentally huge change, beyond modernization. This implies all kinds of tech-driven activities aimed at boosting enterprise agility and efficiency, all in the name of greater value for customers, employees, and business partners altogether. In practice, digital transformation tends to have its own context for each company, depending on its focus. 

Say, for insurance, an example of digital transformation would be shifting claim management to a holistic digital platform or splitting a legacy CPP system into microservices. For commerce and tech distributors transformation may regard full automation of invoice processing, while digitized employee onboarding may well be considered a major disruption for SMEs within any other niche.

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And definitely, digital transformation isn’t exclusively the privilege of IT domain insiders — far from it. Fields like farming may seem nowhere near digital. Yet, revamping mission-critical workflows may equally help any enterprise, farming included, convert their enriched data and expertise into new products and digital revenue streams.

What’s with the "digital transformation" usage?

Getting back to the monumental expression, you don’t hear “digital transformation" spoken much over a cup of coffee these days, do you? Indeed, does anyone even use it in real life, at least around the office folks? That is a loaded question, and it’s debatable. Honestly, even if you’re a tech vendor, getting a request for digital transformation is a pipe dream, one can barely have a frame of reference for this. 

Just off the top of one’s head, the term is nobody’s first choice for being way too vague — average clients like more specific, to-the-point language better. Still, with its generalistic nature, the expression comes instrumental in communicating messages around enterprise executives, spokespersons, tech consultants, and business visionaries.

And sure enough, to be trend-aware and search-optimized, a tech company should nowadays better present a dedicated expertise page with digital transformation examples. Terms come and go, but whatever the name of demand on surface, one would go the extra mile to showcase their offering at its best and get a certain edge.

All digitish, tons of ‘-ation’. Is there that much of a difference?

To be more specific about the digital transformation definition, let’s get the hang of how to tell similar notions apart.

Digitization. This one is by far the simplest, just denoting the transition from analog to digital.

Digitalization is a process of applying digitized data to facilitate or automate long-established workflows. Not that it was a means to disrupt businesses or tap into new fields. Think of it as just a way to ultimately improve customer service, both within the back- and the front-office, by providing easily accessible data.

In contrast, digital transformation IS indeed a path to rebooting entire businesses, not to mention enabling better efficiency into customer interaction. In doing business, not only does it change the HOW, but is pretty decisive in changing the WHAT. Meaning, by transforming strategic enterprise models and systems one can even find themselves opening up new business dimensions or levels.

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But is it as easy as it’s said? Is it alright to rush there headfirst under the pressure of tech-powered competition? Because normally, part of us wishes to stand our ground by just sticking to what seems unbroken. Still, there's little chance to leave it be, as in the turbulent global economy of the 2020s survival takes every ounce of power, let alone leadership. 

Brace yourself — as painful as it is, each of today’s enterprises should pick their own digital transformation strategy to make it a success.

How exactly does digital transformation magic work?

Say, a company hits the point that surfaces specific challenges. Could be customer demand. Could be a gap in technology or competition that these days change by the minute. To disentangle the challenges, the enterprise reaches out for digital transformation consultants’ assistance. 

The experts are supposed to red-flag vulnerabilities and discover the target aspects to be reshaped. Normally, the core areas of digital transformation projects would be somewhere in-between reestablishing:

  1. business models 
  2. processes and approaches 
  3. niches or domains 
  4. culture or organization

But cases surely differ, and one’s transformation may be another's drop in the ocean, barely covering a handful of needs. To put the makeover on the right rails, vendors dig deep into the client’s target market and community specifics, investigate economic and technological insights like the Gartner digital transformation hype cycle, and far beyond.

Today, expecting customers to stick with you on their own isn’t a working model — it kind of labels you a sitting duck. That’s exactly what a reliable consultant helps you avoid by revisiting your old practices and generating an efficient digital transformation strategy. Based on multi-source stats and research-driven roadmaps, consultants come up with a set of activities meant to trigger a makeover. 

What sorts of efforts this may involve? Quite whatnot — from reskinning and rebuilding internal IT systems to rethinking decision-making processes, personalizing customer interactions and experience, all the way to reorganizing service and management operations at scale.

Note. The major change doesn’t happen in the blink of an eye. Even if an enterprise timely comes to terms with their emerging issues, fixing them takes much. If anything, one should consider easily available:

  • Consistent crisis budgeting
  • Robust risk management planning
  • Outside consulting perspective
  • Trusted tech vendor partnership

Once none of the aspects are much of a problem, this makes for good chances your digital transformation strategy works out well for you. May sound complicated if we try walking in clients’ shoes. Nevertheless, we’d better clearly see the field to be the ones driving the success rate. Speaking of which, let’s bring in some stats and facts to have a broader angle.

Digital transformation stats to be aware of

Even though observers note that many industries are facing recession, forecasts evaluate the global digital transformation market as growing from $B469.8 in 2020 to $B1,009.8 by 2025, at a 16.5% over the period. Still, for a good share of businesses, reformation lies out of their circle of interests up until it’s too little too late. 

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Today is decades that we are into the digital age. Yet, many CIOs believe that switching from on-prem services to the cloud or swapping legacy workflows with SaaS is pretty much it when it comes to digital transformation. On its surface, it may seem this will do. In the real world, higher odds are that more significant modernization efforts may be needed.

This, alongside a wealth of other factors, compounds distressing 70% of failure around digital transformation projects. Specifically, why do they fail? Surveys show the major reasons would be:

  1. Resistance to change from employees. Just 16% tend to believe in reforming as a means to increase productivity and sustainability in the long run.
  2. Insufficient financial resources, alongside issues with ROI.
  3. Legal and compliance concerns are considered as transformation bottlenecks by 26% employees.
  4. Complexity of transformation in retail is emphasized by 76% of respondents. 
  5. Lack of required talent or time, coupled with worries about security and privacy also reaches 75% of concerns.

But skepsis aside, remember: this isn’t all struggle, there’s a silver lining. Companies boasting higher digital maturity capitalize on 45% revenue growth, while the ones having lower maturity get by with 15%.

Trends to factor in while building a digital transformation strategy

First, a short take on a couple of basic rules to bear in mind. Given that up to 73% of enterprises fail to drive enough business value from digital transformation, you’d better carefully quantify the ROI. By your math, a project like rebuilding your enterprise software may look as if it has a quick payoff, but may well turn out chasing longer-term value. After all, it’s anyway critical to: 

  1. Establish initial metrics prior to starting the project.
  2. Settle on strategic business goals with regards to revenue growth, time to market, customer value, cost and operational productivity improvement.

Now, right to the chase. What have we learned from crunching through towers of stats and investigations?

  • Big European enterprise software vendors gradually leave more room for smaller producers of ERP, CRM, CCM, and beyond. As the turning point emerges, make sure to bear with the trusted ones.
  • Open-source software platforms are becoming the new normal. Choose the one that fits best to enhance your business flexibility while ultimately reducing cost and risk.
  • Interoperability-driven environments are still big. Sure, bringing together disparate apps, external and internal solutions isn't a walk in the park, but still okay with the right middleware and integration services.

Supply chain management is huge for years to come. The Great Disruption surfaced the need for a proactive digital transformation within the domain, so the SCM solutions became more prominent.

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  • Labor disruptions continue, concerning both internal and external resources. With CIOs anticipating issues in finding the necessary talents within data science and cybersecurity, there’s a spike in demand for seasoned tech consultants.
  • Focus on sustainability, resilience, and circular economy is evergreen. Minimized carbon footprint and remote works get increasingly accepted, so there must be enough to transform for anyone.
  • Full data management lifecycle is king. Cautiously dealing with data — from generation to collection, storage, parsing, enriching, reusing, and beyond, becomes a business imperative, besides security, which is a rule one at all times.
  • AI-enabled business process automation heads everywhere. As companies are struggling to keep up with data growth, AI provides the required speed and precision to underpin human insight and convert them into a never-before-seen customer experience. 
  • Chatbots and virtual role-based customer assistants continue to reduce workload and enhance CX. With a general trend of omni-channel customer engagement, one should remember to evolve their online communities and implement convenient messengers.
  • Customer due diligence is above all trends in digital transformation. As you pick potential software vendors and system integrators, pay attention to the way they vet clients.

Hit the road with an informed digital transformation strategy

Ask a thousand companies about their digital transformation strategies — and make sure there will be a thousand different roadmaps behind them. No doubt, the process entails a fundamental multi-level operational change. But for companies, especially the ones struggling with recession, it can be a true safety net. Not to speak of unparalleled rewards for those who make it to a seamless transition. 

So we’d just remind you in case you consider your very own makeover any time soon — Symfa is a natural at building and implementing digital technologies that make a world of difference. Today, we’re in the middle of our second decade revisiting legacy infrastructures, splitting, reengineering, and bringing together efficient systems to ferry enterprises through transformation, nice and easy.

Afraid your one is complex? We specialize in complex! For any lingering questions, contact our tech consultants — we’re there for you, always.

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