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Digital transformation is a process, not an event
To stay competitive in today’s digital world, businesses need to innovate and reinvent to keep up with customer and market demands. However, it is important to note that digital transformation is not a ‘set it and forget it’ effort but a continuous journey of reinvention and business transformation.
Amazon’s Jeff Bezos once said, “In today’s era of volatility, there is no other way but to reinvent. The only sustainable advantage you can have over others is agility, that’s it. Because nothing else is sustainable, everything else you create, somebody else will replicate.”
People often interchangeably use the words DIGITISATION, DIGITALISATION and DIGITAL TRANSFORMATION. Despite sounding almost identical, they have different meanings and implications but are also interconnected. Misunderstanding of the terms can result in missed opportunities to evolve and gain competitive advantage. Let us now take a closer look at each one of them.
DIGITISATION
Digitisation is the first step to transforming your business. It lays the foundation for you to create business value from data by converting hard copy data into a digital form. For example, when you scan paper invoices and store them as pdfs on the company’s network. This allows for easy sharing and access to data for faster communications and processing.
Most businesses have already adopted digitisation and have been enjoying the benefits of cost-efficiencies and increased productivity with the move away from manual activities like the mailing of invoices.
DIGITALISATION
Digitalisation expands on digitisation and focuses on processes. It involves improving business processes by leveraging digital technologies and your digitised data. Through automation, digitalisation simplifies routine work so you can further increase productivity and efficiency while reducing costs.
For instance, invoice digitisation with an Enterprise Resource Planning (ERP) software like Microsoft Business Central can have an immediate, direct, and measurable impact on many processes, such as the invoice processing itself, audit and reporting, compliance, security, interaction with external and internal suppliers, customer service, operational planning, and the reduction of costs.
DIGITAL TRANSFORMATION
Digital transformation refers to a foundational change in how a business delivers value to its customers with technology adoption. However, it involves people and a digital culture shift as much as it is about updating data and processes with technology.
For example, failure to align digital efforts with staff values and behaviors can create obstacles for your ERP deployment. For effective people and change management, you need to understand the current business culture and the psychology of your users. Put them at the heart of the process and take time to explain the business benefits of digitalisation and what benefits it will have on their day-to-day work.
For successful business transformation and resilience in this age of disruption, you should look to build a culture that promotes innovation, agility, as well as one that instils the importance of cybersecurity and data protection.
Need help getting started?
Find out more about CTO-as-a-Service, a complimentary digital consultancy initiative by IMDA that helps SME as they go digital.