What are the 4 types of digital transformation?

What are the 4 types of digital transformation?

Digital transformation is a strategy a business uses to create new practices and processes or transform existing ones using technology. According to Fission Consulting, the goal of digital transformation is to improve a business’s operations and increase efficiency. It achieves this by using digital technology to solve conventional issues. So, it works by blending digital and physical processes, depending on the industry. Additionally, there is more to digital transformation than technology.

The four types of digital transformation?

Digital transformation does not imply the same thing for all industries or companies. Therefore, various forms of digital transformation exist depending on the industry and the business. Below is a guide to the four types of digital transformation:

Process transformation

This process focuses significantly on corporate activities and business processes. Businesses can reinvent their processes through analytics, API, machine learning, and data technologies. Process transformation typically aims to lower costs, reduce cycle types, and increase quality within a business. An example of process transformation is robotic process automation to transform manual tasks in an administration like supply chain management and procurement. Process transformation can improve a business’s value.

Process transformation includes the following processes:

  • Identify the goals of the process transformation
  • Determine the baseline metrics
  • Bring in all the stakeholders for their feedback
  • Map out the best scenarios
  • Introduce small teams to the new process and monitor the progress
  • Make changes to improve the success of the new processes depending on the results of monitoring

Business model transformation

This type of transformation is where companies pursue digital technologies to transform their conventional business models. While process transformation focuses on finite business areas, business model transformations target the fundamental building blocks for how an industry delivers value. An excellent example of business model transformation is how Netflix transformed from mailing DVDs to online streaming. Business model transformation is a complex process that can either yield incredible results or damning ones. Companies can achieve business model transformation by reinventing and adding to their current model for success. By doing so, companies can gain significant growth opportunities.

Domain transformation

Domain transformation is where organizations adopt new technologies to redefine their products and services. This can be achieved by extending existing services to a new customer base. However, domain transformation may also include developing entirely new technology-based offerings. New technologies help companies blur industry boundaries and enter a non-traditional competition level.

An excellent example of domain transformation is how Amazon expanded into a new market domain by launching Amazon Web Services. The e-commerce giant combined strong digital capabilities, computing databases, and built-in storage into its retail business.

The key to domain transformation is to recognize new domain opportunities with new technologies and understand how yiu can capture them.

Organizational transformation

Also known as cultural transformation, digital organizational transformation involves redefining corporate mindsets, procedures, talents, and prospects for the digital world. Embracing digital cultures help a business adopt nimble workflows, develop a predisposition towards testing & learning, and support regionalized decision-making.

A mindset shift alters an organization’s culture from managing invention output to concentrating on customer service and invention. It is worth mentioning that a cultural transformation usually occurs organically when companies assume other conversion initiatives. For example, adopting digital workflows can cause internal teams to recognize the power of altering administrative norms.

What are the benefits of digital transformation?

Companies enjoy numerous benefits when they go through digital transformation. Some of these benefits are:

  • Improved internal processes thanks to incorporating advanced technologies
  • It allows companies to explore new opportunities for growth by employing various technologies
  • Advanced technologies, like automation, can lower labour costs within a company
  • Incorporating advanced technologies can increase productivity within an organization
  • Digital transformation allows organizations to improve their customer service experience
  • Digital transformation increases customer satisfaction by providing clients with more options
  • Online interactions with clients help companies gather useful data for future marketing and sales approaches

So what are the 4 types of digital transformation?

Digital transformation is a multi-dimensional process. The four types of business transformation explain this element. This means that its execution must be a team process. Most companies adopt digital transformation because they fear missing out on new opportunities or not catching up with the competition. However, it would be wise to understand what digital transformation entails and how you can execute it most efficiently. Additionally, you would benefit from understanding that digital transformation is not entirely about technological elements.