Business Magazine

Digital Transformation: From Hype to Practical Course of Action

Posted on the 13 September 2018 by Litcom

Digital Transformation refers to the utilization and application of digital technologies in an agile manner to fully automate, integrate, and minimize human involvement in specific business processes.

The evolution of technologies such as high-speed internet, smartphones, supercomputing, and cloud computing are major critical factors and enablers of digital transformation for businesses. A key aim of all digital transformations is to make businesses more efficient by expanding digital capabilities. The goal of such activity is to increase top-line revenue growth and reduce costs where possible.

Digital Transformation trends in Middle-Market organizations

The National Center for the Middle Market, in collaboration with the University of Ohio, recently surveyed 500 C-level middle market executives who were responsible for their organization’s strategy and business process implementation. The final report included some key points:

  • Companies experiencing rapid growth (10%+ annual revenue growth), along with companies in the business services and healthcare industries, are the most likely to consider digitization extremely important to their success. They enjoy a faster pace of digitization and achieve a greater ROI from their digitization efforts.
  • Middle market businesses allocate a significant 19% of digitization dollars to innovation and strategy development projects, which more directly affect a company’s future revenue streams and growth.
  • Looking forward, 42% of companies anticipate increasing or significantly increasing digitization spending on business analytics and strategy development, while 39% expect to up the digitization budget for innovation projects, representing some of the greatest expected future increases in digitization spending.
  • Companies enjoy nearly a 28% ROI on their digitization projects.
  • Close to 90% of middle market companies rate their latest digitization project as a success, measured in part in terms of ROI.

According to research from the global market intelligence firm IDC, digital transformation accounts for over 40 percent of all IT spending and is expected to top $2 trillion by the end of next year. These transformations cover all types of digital adoption ranging from cyber security, to artificial intelligence (AI) and automation. This leads to better gross margins and higher earnings for firms.

Embarking on a Digital Transformation

Successful digital transformation strategies and implementation projects focus on the following course of actions:

  • Conducting a fast-tracked review to ascertain that business and IT align.
  • Taking a closer look at the organization’s data practice (Data Warehouse, Business Intelligence, Big Data and Data Governance).
  • Assessing the current state of the organization’s systems Integration. (Real-time systems integration is a critical success factor to any customer engagement.)
  • Drafting a business capability model.

The Advantages of Digital Transformation

Digital Transformation does more than simply rescue enterprises running on dated models; the digitally transformed business is set to reap huge benefits and advantages as it finds its place in an evolved and internet-dependent marketplace.  A Digital transformation affords organizations:

  • Enhanced Customer Acquisition and Retention;
  • Streamlined Workflow and Operations;
  • Greater (i.e. Global) Reach;
  • Gained Insight and Foresight to Improve Management and Marketing Decisions and
  • Speedier Development of New Products and Services Going Forward.

Digital Transformation Organization in Action – Armstrong World Industries

An international designer and manufacturer of walls and ceilings, Armstrong World Industries is an example of an organization that was successful in its digital transformation project. By streamlining business operations, Armstrong’s CIO was able to invest the savings into transformative technologies such as cybersecurity and analytics. For example, analytics currently helps Armstrong identify quality issues with its ceiling tiles.

A key reason for the success of Armstrong’s digital transformation was its move to using SAP Business One for ERP financial applications. Armstrong has completely overhauled their website, migrated management of its travel to Concur and also created both European and Asian CRM suites in order to expand its reach.

To compliment Armstrong’s digital transformation, Armstrong’s CIO also implemented ‘stand-up’ meetings to create a “sense of urgency”. This, among other things, has helped turn Armstrong’s IT department from simply an “order-taking” center into a business that meets the needs of its customers.

Written by: Omar Kayed, Digital Transformation Specialist

The Litcom approach

An effective Integrated Digital Strategy supports the Business Strategy by aligning the strategies for each area of the company.  Litcom’s approach is based on a fundamental principle: the company’s business intent and objectives drive everything.

We work with you to:

  • Review your business strategy and goals;
  • Understand your digital capabilities – both human and technological;
  • Design your digital model and processes – leveraging industry best practices;
  • Determine the necessary sources (people, technology, organization) to support the digital strategy implementation; and
  • Establish the digital strategy principles, governance model and roadmap.

Contact us for information at: [email protected].


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