Is your business prepared for digital transformation? Part 1 – Digital Darwinism

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At ERP Central, unsurprisingly, we’re a lot more interested in the comings and goings of business management software than most. For this reason, we like to keep up to date with the latest news from Microsoft. Throughout 2016 and into 2017, Tricia Morris, Senior Product Marketing Manager for Microsoft Dynamics 365, posted a series of articles focused on the topic of digital transformation.

We thought we’d collect these together, with our own take on their relevance to ERP and how technology can help businesses in all sectors improve efficiency and streamline their processes.

What is digital transformation?

Evolutionary in nature, digital transformation is also referred to as digital Darwinism. It’s defined as the change associated with the application of digital technology. It’s seen as the third stage of embracing digital technologies, advancing from digital competency to digital usage and finally digital transformation. Rather than simply enhancing and supporting traditional methods, the transformation stage enables new types of innovation and creativity.

In relation to ERP, digital competency would relate to recognising the need to move to a more paperless approach to reporting. Digital usage would relate to simple and, more than likely, disparate software solutions which allow paperless reporting to take place. And digital transformation reflects the move towards more cloud-based integrated process management software which combines everything into one system. Solutions like Microsoft Dynamics 365 being a perfect example.

What’s driving digital transformation?

 

Many businesses have differing factors that motivate them towards change. For some, it’s a growing pressure to deliver new revenue streams, for others improving cost efficiency. Increasing the visibility of business intelligence, encouraging collaboration and improving customer experience are also important drivers of change.

This is supported by research from the Altimeter Group that highlighted six stages of digital transformation:                                                                             

• Business as usual
• Present and active
• Formalised
• Strategic
• Converged
• Innovative and adaptive

It found that many organisations could span multiple stages at any given time. For the respondents that they interviewed, the top three initiatives for change were; accelerating innovation, modernising IT infrastructure and improving operational agility.

Despite this, an MIT Sloan Management Review and Deloitte University Press report stated that less than half of business executives, managers and analysts from around the globe believed that their organisation was adequately prepared for the disruption of digital trends.

Digital transformation statistics

Given the dizzying pace at which digital change is occurring, Tricia’s next article highlighted 21 statistics that demonstrated just how swiftly and significantly digital transformation is shaping business across the globe.

Here are a few highlights:

• 55% of companies without an existing digital transformation program say the timeframe to adopt one is a year or less. (Source - Are Businesses Really Digitally Transforming or Living in Digital Denial, Progress, 2016)
• The biggest disruptive technologies cited by global respondents are the cloud (58%), mobility and collaboration (54%) and data (52%). (Source - BT CIO Report, 2016)
• 39% say their digital transformation efforts have helped them make strong progress in enabling real-time transactions; 32% say it has helped them make strong progress in improving the efficiency of operations; 28% say it has helped them acquire new customers. (Source - Digital Evolution: Learning from the Leaders in Digital Transformation, Economist Intelligence Unit (EIU), 2015)
• 70% of executives have started the digital transformation of their supply chains. (Source - The Current and Future State of Digital Supply Chain Transformation, Capgemini, GT Nexus, 2016)

The importance and impact of digital transformation and the fast-moving pace of technology can’t be understated. In digital Darwinism, it’s definitely survival of the fittest.

Businesses with their heads in the sand are likely to see their competitors embracing digital trends and reaping the benefits of the latest technology. With the latest update of Microsoft Dynamics NAV 2017 and the added functionality it brings, not to mention the launch of Microsoft Dynamics 365, ERP software offers an obvious solution to digital transformation when it comes to reporting and business processes.

If you’d like to find out more, get in touch with one of our team today.

In part 2, we’ll look at how businesses can implement digital transformation strategies so that entire organisations can embrace change positively and effectively.

Images from Microsoft Dynamics blog

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