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What is Digital Transformation?

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How do you define Digital Transformation?

Digital Transformation is at the top of virtually every organization’s list of objectives and concerns lately. The rules of business – and public sector – are being rewritten nearly every day as a combination of technology advancements, evolving customer expectations, process enhancements (e.g. digitization), and new business models are forcing executives to rethink prior IT strategies. Digitally transforming the organization represents an opportunity to meet these changing requirements and to leverage technology for providing differentiated and compelling experiences or outcomes.

Digital Transformation generally isn’t a single technology, nor is it a single IT project; it’s about employing a broad set of technologies, often in a series of interrelated initiatives. It often starts with an evaluation of top organizational objectives and requires an internal analysis of resources, organizational maturity, and technological gaps. The intersection of these two data points (prioritized needs and organizational realities) often informs a roadmap and investment horizon.

In the end, the decisions organizations make on how to evolve – by leveraging advanced technology in new and innovative ways – will have a direct impact on differentiation, growth and scale, profitability, risk mitigation, customer satisfaction, and speed-to-market. Those that select the right IT from the right technology partners, and implement solutions in a practical, methodical manner over time, will likely flourish. Those who do not will likely struggle.

Digital Transformation

What are the four main areas of Digital Transformation?

While Digital Transformation touches virtually every corner of the organization, and as a result is often the subject of varying priorities from numerous stakeholders, there are common threads on core objectives. Fundamentally, what organizations are trying to do is move faster, have greater agility, secure what matters most, and leverage insights to drive value. These four core pillars align directly to established – yet historically disconnected – software markets:

  1. Enterprise DevOps – Users are hungry for “new and improved” today, not tomorrow. Ensure timely software delivery by optimizing value streams from request to business value. Align stakeholder priorities, strengthen collaboration, automate everything, and scale DevOps with confidence.
  2. Hybrid IT Management – The IT landscape is a complex, dynamic hybrid of traditional and cloud-based technologies. Simplify hybrid complexity while transforming IT into a true service-driven organization to fully participate in digital business success.
  3. Predictive Analytics – Learn more about unmet customer needs, under-funded parts of the business, and emerging business models to drive the top line.
  4. Security, Risk & Governance – Safeguard the assets that matter most to the organization: identities, applications, and data. This is important all the time, but perhaps never more relevant than during a period of transition, when processes and technology are evolving.

Because these initiatives often overlap, organizations today are not just looking for software providers that can deliver these solutions in isolation, but instead can deliver a holistic and integrated set of offerings across these pillars to achieve optimal results over the long run.

Why is Digital Transformation important?

The benefits of Digital Transformation are many and varying. They can be placed into two broad categories:

Top-line benefits

Opportunities to grow the business are always attractive and can manifest themselves in many forms. Some of the most common objectives to this end include:

Boost and sustain revenue – Access to increasing amounts of data and new ways to bridge formerly distinct data silos now enable organizations to achieve actionable insights. As a result, organizations can more effectively act on unmet customer needs, under-funded parts of the business, emerging business models, and more.
Drive customer engagement – Organizations are constantly looking for new and better ways to engage customers. With the right investments, they can eliminate intermediaries and employ digital platforms to reach and serve customers directly, closing the loop between data and action and truly understand their customers and better satisfy their needs.
Deliver with greater speed – Customer expectations are constantly advancing, especially when it comes to accessing new and emerging benefits. With cognitive search, employees are able to perform knowledge discovery more efficiently; and with smarter functional testing, organizations can deliver innovation (at lower risk) than ever before.

Bottom-line benefits

With IT budgets under pressure, organizations are often focused on optimizing the enterprise. Some of the most-common paths to lowering risk and cost include:

  • Improve quality and delivery – Gaining access to AIOps helps organizations reduce event volumes and get to root cause faster, and emerging service assurance technology combines data from hundreds of tools into a single pane of glass to discover IT resources and dependencies and fast-track problem resolution.
  • Streamline & enhance processes – Organizations that digitally transform are able to better streamline the back office with Robotics Process Automation (RPA), drive intelligent manufacturing with IOT analytics, and automate planning monitoring and scheduling.
  • Detect and prevent risk – Evolving IT and processes helps organizations efficiently manage policies and privileges, identify insider threats, better lock down mainframe access, comply with regulations, and protect consumer privacy.

How do you get started with Digital Transformation?

In many organizations, the primary purchasing power has moved away from the IT department. This can lead to decisions where the objectives of a given project may be inadvertently narrow and misaligned with overall corporate plans. For instance, a manufacturing business unit may optimize for throughput, which may be at odds with legal and compliance processes.

What are the common pitfalls of Digital Transformation?

The biggest pitfall generally occurs at the execution phase. At first blush, pursuing Digital Transformation by starting over from scratch – i.e., ripping out current technology in lieu of bleeding-edge software – appears to have merit. With this approach you are likely to achieve the exact specifications you are looking for.

For most however, particularly with core business systems that have been in place for many years, the prudent approach is typically to build on to what already exists. Typically, these organizations have built out processes and IP that, when combined, serve as systems of record and address mission-critical requirements. Pursuing a rip-and-replace strategy in such situations often introduces a level of risk, plus negatively impacts cost and time-to-market, that are strategically unacceptable.

The prudent path is to modernize existing technology and extend current investments with software that bridges the old and the new. Often called “smart Digital Transformation,” a modernization strategy allows organizations to optimize savings and convenience, as well as deliver a much lower risk profile by avoiding the disruption of tried-and-true processes and degrading ROI on existing investments.

How important is AI/machine learning to Digital Transformation?

Advanced analytics have historically been sold as stand-alone offerings – as a product or as a platform – which artificially capped the benefits they could provide. With additional requirements being placed on IT, and as organizations are finding new and better ways to bridge formerly distinct data silos, expectations are now also evolving. Expect to see artificial intelligence/machine learning being integrated into DevOps, Hybrid IT, and Security, Risk & Governance solutions to help drive added value to the organization and help more effectively manage risk and cost. This evolution will thus help drive top- and bottom-line results to early adopters.

What are the keys to success with Digital Transformation?

Once the critical elements are clear, make sure the business’ goals are outlined in full. One of the most common reasons why IT projects fail is unclear or evolving objectives. If you are pursuing a mainframe modernization project, for example, achieving better speed and delivery throughput with DevOps may be a primary objective. But there is much more you can accomplish at the same time, including deploying into new channels and markets by leveraging Cloud deployment models, increasing throughput, and having the ability to surface the data that has been locked away for a long time and making it more broadly accessible to advanced analytics. Make sure you draw the circle big enough on what you’re trying to accomplish at the outset, and then tune your strategy accordingly.

Then take stock of where you are today and establish where you want to be at a set point in time, and then identify and prioritize key IT gaps. This will provide a meaningful structure to build from, and will help you start to crystalize a framework. Equally important, make sure your plan takes your current IT realities into account. This is often described as a modernization maturity model, and it is critical to ensure you balance ambition and risk mitigation.

What is the difference between Digital Innovation and Digital Transformation?

Digital innovation and digital transformation are often confused. Both are forms of digital change, but each has a unique meaning. One easy way to distinguish the two is to think about who the change affects.

Digital innovation is a sudden technological change that’s new to everyone. It’s the creative process that results in a brand-new way of using technology to do something that has never been done before. It’s the disrupter that makes everyone sit up and take notice because they have to decide what it means for their business. Or it’s a progressive way of doing things that creates a market that didn’t previously exist. Of course, not all digital innovation is as big as the advent of the cloud or artificial intelligence. Many are smaller changes to how organizations traditionally do things. Big or small, digital innovation is revolutionary to everyone.

Conversely, digital transformation is an evolutionary technological change that individual organizations take on. It’s the process by which a company uses technology to change the way their people, processes, and existing technology function. Sometimes it’s a result of digital innovations gaining traction. Other times it’s driven by evolving customer needs, security vulnerabilities, or changes to how and where employees work. Regardless of what’s causing the change, digital transformation impacts individual businesses.

What is the difference between Digital Transformation and Digital Modernization?

While digital transformation tends to get the spotlight lately, digital modernization is another term used to describe the digital evolution of an organization. The two terms are closely related but have unique nuances and therefore shouldn’t be used interchangeably.

Digital transformation is a significant shift in the way an organization uses technology to run their business. Digital modernization is a less extreme process of upgrading or modifying existing technologies or systems to achieve greater efficiencies and reduce costs. Additionally, digital modernization tends to focus specifically on operations and infrastructure rather than the wider view of the business that’s covered by digital transformation. Learn how app modernization plays a role in digital modernization.

How does Digital Transformation relate to Business Transformation?

Business transformation is a term that describes a broad category of fundamental changes to how an organization conducts their business. The changes can be driven by any number of things including evolving market demands or a strategic shift to pursue new markets.

Digital transformation is one method a company can employ to achieve their business transformation. It’s the use of tools and applications to change processes that support a shift in how an organization runs its business.

Business transformation can happen without digital transformation – although the opportunities are limited in this digital age – but digital transformation cannot happen independent of some business transformation.

What should I look for in a Digital Transformation partner?

Each organization’s needs are unique, and thus an ideal technology partner will fluctuate from company to company. Given complexity, inherent risk, and long-term timeframe typically associated with such projects, there are a few best practices to consider:

  • Prioritize holistic, integrated sets of solutions, so you can innovate faster with less risk.
  • Identify technology that can bridge the old and new, so you can pursue smart Digital Transformation with a modernization strategy.
  • Expect flexibility in deployment and vendor compatibility to remove barriers to strategic initiatives.
  • Look for solutions that are open and integrated, so you can build out an ecosystem that serves your distinct needs.
  • Embrace vendors that deliver customer-centric innovation, so you can meet evolving requirements more effectively.

How can OpenText be your Digital Transformation solution?

OpenText helps customers digitally transform their organization and achieve growth, profitability, and customer-satisfaction objectives while also maintaining the ability to optimize their overall business spend. Backed by a deep analytics ecosystem, OpenText combines a wide range of trusted and proven products and solutions with customer-centric innovation to deliver the speed, agility, security and insights necessary to succeed in today’s rapidly evolving marketplace.

OpenText's solutions are well aligned to the four core pillars of Digital Transformation:

Enterprise DevOps
Deliver at high speed with low risk

DevOps is essential to the Digital Transformation of a business and is a foundational change in how an organization delivers value to its customers. With OpenText, organizations can reliably scale DevOps across all environments, from mainframe to cloud – quickly bringing innovative ideas to life at the pace your business demands. Now speed and quality can go hand in hand.

Hybrid IT Management
Simplify your IT transformation

Diverse, unpredictable, and constantly changing, hybrid IT brings with it a new level of complexity that cannot be controlled by conventional management methods. With our solutions, customers can simplify that complexity and transform IT into an agile, services-driven organization. Business success in our digital-first world depends on it.

Security, Risk & Governance
Secure what matters most

Cyber threats are escalating. Aging apps and processes (along with new ones) are full of unforeseen risks. Privacy and compliance requirements are mounting. And point solutions don’t offer the scope, vision, or cross-silo analytics needed for these company-wide challenges. With our solutions, you can take a holistic, analytics-driven approach to securing what matters most – identities, applications, and data.

Predictive Analytics
Analyze in time to act

Lakes of data are valuable only if you can surface the insights hidden within their depths. With our solutions, you can leverage machine learning to transform unlimited volumes of data into accurate, actionable, automated insights – at the speed of your business. Now you’re ready to make predictions and influence business outcomes. With our predictive analytics solutions, you can leverage machine learning to transform unlimited volumes of data into accurate, actionable, automated insights – at the speed of your business.

The company’s unique point of view on Digital Transformation is that most initiatives have a common thread. While organizations recognize that they must evolve their IT practices to stay competitive, they also know that the core business systems and supporting processes they have developed over time are the lifeblood of the organization. Instead of adopting a rip-and-replace strategy that can yield unacceptable risk, most customers instead wish to pursue a modernization strategy.

OpenText delivers on the promise of smart Digital Transformation by developing and delivering software that is optimized to bridge the old and the new. With a holistic portfolio, which is integrated and open, OpenText helps customers run and transform their business at the same time.

Digital Transformation

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