Digital Transformation (DT) is not necessarily about digital technology, but
about the fact that technology, which is digital, allows people to solve their
traditional problems. And they prefer this digital solution to the old solution.
The transformation stage means that digital usages inherently enable new types
of innovation and creativity in a particular domain, rather than simply enhance
and support traditional methods.
In a narrower sense, “digital transformation” may refer to the concept of
“going paperless”, and reaching a “digital business maturity” which affects both
individual businesses and whole segments of society, such as government, mass
communications, art, medicine, and science.
While the impact of this on businesses has been profound, many are struggling to
realise the full potential of what digitisation and this is also clearly divided by
Geography. According to the McKinsey Global Institute’s Industry Digitization
Index, Europe is currently operating at 12% of its digital potential, while the USA
is operating at 18%. Even within the leading economies of Europe there are also
some significant differences as, according to the study, Germany operates at 10%
of its digital potential, while the UK is almost on par with the USA at 17%. This
clearly demonstrates that, while business processes are undergoing great change
making much progress in the adoption of digitisation, even advanced economies
are struggling to exploit the full potential of digitisation but still African countries
can still embrace this development for maximum developmental process the continent
With the introduction of the World Wide Web, the scope, dimension, scale, speed
as well as effects of digitalization fundamentally changed, resulting in the
increased pressure on the societal transformation process.
In 2000, digitalization began to be used more widely as a concept and argument
for an overall governmental introduction of IT, increased usage of internet and
IT on all levels. A similar development began in the general business climate in
order to raise awareness regarding the issue and opportunity. In the EU for
instance, an initiative called the Digital Single Market was developed, with
recommendations for national digital agendas in the EU, which gradually and
positively should contribute to the future societal transformation, with more
modern development of communities, structures and to create a basis for e-
governance and information society but in this case Africa is still struggling,
big thanks to technological companies like Facebook, Google and IBM who
are supporting millions of youths with high quality online digital skills
empowerment programmes with certificates which is helping africans to
relocate jobs and be usefull through digitilization .
The debate surrounding digitalization has therefore gained increased practical
importance for politics, business and social issues, and is linked to political work
issues for community development, new changes in the practical business
approaches, effective opportunities for organizations in operational and business
process development, with effect on internal and external efficiency of IT to
name a few.
Digitalization and Digital Transformation
Unlike digitization, digitalization is the actual ‘process’ of the technologically-
induced change within these industries. This process has enabled much of the
phenomena today known as the Internet of Things, Industrial Internet, Industry
4.0, Big data, machine to machine communication, blockchain, cryptocurrencies etc.
The academic discussion surrounding digitalization has been described as
problematic as no clear definition of the phenomena has been previously
developed. A common misconception is that digitalization essentially means the
usage of more IT, in order to enable and take advantage of digital technology and
data. This early definition however, has largely been replaced by the above
definition, now linked to holistic views on business and social change, horizontal
organizational and business development, as well as IT.
Finally, digital transformation is described as “the total and overall
societal effect of digitalization”. Digitization has enabled the process of
digitalization, which resulted in stronger opportunities to transform and change
existing business models, consumption patterns, socio-economic structures, legal
and policy measures, organizational patterns, cultural barriers, etc.
Digitization (the conversion), digitalization (the process) and the digital
transformation (the effect) therefore accelerate and illuminate the already
existing and ongoing horizontal and global processes of change in society.
Opportunities and challenges
Digital transformation is a major challenge and opportunity. When planning for
digital transformation, organizations must factor the cultural changes they’ll
confront as workers and organizational leaders adjust to adopting and relying on
unfamiliar technologies. Digital transformation has created unique marketplace
challenges and opportunities, as organizations must contend with nimble
competitors who take advantage of the low barrier to entry that technology
provides. Additionally, due to the high importance given today to technology and
the widespread use of it, the implications of digitization for revenues, profits and
opportunities have a dramatic upside potential. We can understand digital
transformation through some real-world examples.
1. Digital transformation in hospitality management
It focuses on ambitious digital transformation, aiming to put the customer back
at the center of its strategy and operations. We need to assess organizational
structure to embrace digital transformation and identify how data from online
content and reviews might play a role in increasing booking. Latest advancement
in this respect are Online Travel Agencies, service aggregators like Expedia,
Booking.com. We have another competitor in market which is not only digitally
transforming the hospitality industry but actually bringing disruption with the
help of technology, AirBnb.
2. Digital Transformation in e-commerce
Digital experience has become inevitable without e-commerce interaction. Big
players like Amazon.com, Alibaba.com have already disrupted the shopping
journey. But now we have more challenging tasks of avoiding sequence of events
that lead to the security breaches like theft of debit and credit card numbers as
well as the personal information of millions of customers. We need to improve
over our infrastructure with minute details like safe transactional operations,
improved customer satisfaction along with data security.
3. Digital Transformation in banking
It focuses on digital transformation of banking sector in seeking regional growth
amidst a new digital era. Banks have already invested heavily in technology and
infrastructure, which bring dramatic changes and rewired this sector for digital
innovation. From online banking (bank in your pocket), to ATM availability at
every nook and corner has enriched the user experience. Major forces of the
digital transformation strategy involve the overhaul of organization, the rapid
enhancements of highly scalable digital platforms, the leverage on technology to
sculpt the customer experience, and the internal evolution and external
partnering in seeking new digital innovation.
4. Digital Transformation in training
With the increase of online learning tools and facilities organisations and
individuals are looking for more flexible ways per personal development. Using
video driven lectures, online learning communities and learning management
systems allows creating new business models which disrupt the traditional
lecture driven training sessions.