Digital transformation. What is it and why is it critical in 2022?

A key part of a company's overall growth strategy, digital transformation has recently become a key focus. While the topic is considered a very hot topic for discussion, it should be taken very seriously by companies as it is crucial to their survival and growth. Of course, as is the case with many technological changes, digitalization also creates many barriers. However, it is important to remember that the benefits of this change are important in the long run.

To better understand what topic will be covered in this article, we must first understand how it all began. Well, "The father of modern digital communication technology and information theory" was Dr. Claude Shannon, who wrote"Mathematical Theory of Communication" in 1948, from which the entire world of the Internet was built. But it was only after the invention of the microprocessor and semiconductors that the first computers could be developed.
Of course, at the very beginning, the system of computers was only available to a limited population, such as military and research institutes, but over time, there was a need to connect them. And lo and behold, in 1969, the first network appeared - ARPANET! What was the purpose of building the network? The answer is very simple: to help with almost instant access to research and data, in order to spread knowledge and development faster.

And it happened! With the increase of computers and the development of software for business purposes, the World saw a new network - the INTERNET! From the theories of 1948, to the invention of the first microchips and transistors, to the 1.0 (1990's), 2.0 (2000's) and 3.0 networks, all hardware and software solutions were developed to help us perform specific tasks with much greater efficiency.

Okay, so now that we know how digitization began, we can finally define what exactly it is. Digital Transformation is"efforts to enable existing business models through the integration of advanced technologies (*McKinsey)". That is, based on this definition, we can assume that Digital Transformation is the use of processes, technologies and strategies to achieve specific goals that then enable innovation, simplification and efficiency with a specific culture and mindset.
Imagine the culture and workflow of a typical corporation. Many people are focused on establishing and analyzing their specific business, searching for the best opportunities, and trying to find the most desirable product in the market, or even finding an even better sales market. In order to go through this process, we need to deepen our knowledge, then transfer it to our organization, and of course involve a lot of people in these changes. But any change in such a work culture is not always easy. Many times the work culture and the very mindset of the organization is not conducive to any changes and then we have a barrier to development.

On the other hand, if our work culture is change-oriented, then we can easily identify our development goals, whether we become more efficient, have new business opportunities, can introduce new products, etc.
Conversely, if our goals are clearly defined, we can then analyze our organization and see what is missing in terms of processes and technology. All of this helps to define a strategy to achieve our desired goals.
Processes, on the other hand, help us define a specific path from A to Z and give us concrete guidelines for action. Such processes can be automation, analytics, etc.
And then finally we have technology, which helps us collect, store, analyze, predict, etc.
And this is where technology becomes crucial to the digitization of business. And with that being said, I think some of the most relevant technology solutions need to be considered.

It is an IT system that automates and supports processes at the customer-organization interface in terms of customer acquisition and retention (service). In CRM there is all information about our customers, as well as all sales information. In short: it is a system supporting the work of the following departments: marketing, sales, customer service and management.

Another technology that is being used to make decisions more efficient is machine learning systems. These systems select the best product option against our customer profile, private profile, or previous choices, someone with a similar profile. A great example of such a system is e.g. Youtube. A great example of such a system is e.g. the system where the first selection options are based on what we have recently viewed or what people with a similar profile to ours have viewed.
Another example is a large online store with various products (clothing, electronics, etc.). If we buy a particular product, or if we repeatedly just watch it for a while, then ads of products with similar themes will follow us, or even those that were searched by people with similar interests.

The intelligence exhibited by artificial devices (as opposed to natural intelligence). Simply put, there are technologies that go beyond the concept of machine learning and artificial intelligence is just one of them. This technology involves the simulation of human processes by machines, One such example of a strong AI system (no human intervention required) is autonomous driving of vehicles, while an example of a weak AI system is speech recognition.
Anyway, we don't have to look far for such solutions. The chatbots we interact with while shopping also have some artificial intelligence capabilities. All this to help customers solve some problems, without human intervention.

Blockchain technology is one of the newest technologies and most of us know it from cryptocurrencies, but the scope of this technology goes far beyond that. What is blockchain based on? Well, the principle of blockchain is a network that is immutable (cannot be changed), distributed (each element of the network has some information), encrypted (very secure), should be decentralized (managed by the entire community, not just a single entity) and should also be tokenized (as it is in crypto). A great example of blockchain technology, is the extremely popular NFT recently.

Sensors are the foundation of almost all types of technology, such as IoT and AI. They are devices that produce a readable signal that is then properly interpreted by a specific device. Sensors are related to sensing technology, a technology that uses sensors to obtain information by detecting specific physical, biological, or chemical properties, transforming them into a readable signal.

IoT is commonly known as a network that connects physical objects equipped with sensors, software and other types of technology. All this in order to exchange data with other devices and systems. Most often, IoT technology is most commonly found in kitchen appliances, cars, and even home robots. But of course, the potential of this technology is much greater for society as a whole.

I think everyone will agree that we live in a very fast-paced society where everything is changing rapidly. Fast growing opportunities, lead to new challenges, appearing in different markets. However, companies that are less flexible and have more problems adapting to new technologies, sooner or later will be doomed to close down. And what is important! Digital transformation is the key to faster and much better decision making by a particular organization.

Digital transformation is crucial for:

Generalizing. Digital transformation of companies today is an indispensable success factor. And more digitized business processes and the ease of acquiring more and better data, helps companies define better business strategies. All this to keep pace with the speed with which our society, as well as the whole World, is developing. After all, the development of our companies in the age of digitization is very important.

Author:
Leszek Blaszczyk