Digital transformation

Some elements have been transformed for being useful

Digital transformation is part of a larger technological process[1] (see below), and is the change associated with the application of digital technology in all aspects of human society.[2] Digital transformation may be thought of as the third stage of embracing digital technologies: digital competence → digital usage → digital transformation, with usage and transformative ability informing digital literacy. The transformation stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods.[3] In a narrower sense, "digital transformation" may refer to the concept of "going paperless" and affects both individual businesses[4] and whole segments of the society, such as government,[5] mass communications,[6] art,[7] medicine,[8] and science.[9]

Terminology and historical development

According to Shahyan Khan (2016), there has in recent years been a terminological confusion of the interconnected definitions digitization, digitalization and digital transformation. In the academic work Leadership in the Digital Age - a study on the effects of digitalization on top management leadership [1] Khan describes and derives with the help of Bounfour (2016),[10] Vogelsang (2010),[11] Westerman (2014),[12] Collin, et al. (2015) [13] and others, the historical development of digitalization, and clarifies the terminology of the concept.

Historic development

Khan[14] derives and accredits the origins of digitalization to Gottfried Wilhelm von Leibniz (1679),[15] whom in his publication Explication de l'Arithmétique Binaire in 1703, explains and envisions the concept that would be known as "digitalization". Initially developed as a base-2 numerical system, representing two values: either a 1 or 0, the system was further developed and complemented by scholars such as Boole (1854),[16] Shannon (1938)[17] and George Stibitz during the 1940s.[18] Today, Stibitz is considered one of many pioneers of the digital computer, through the development of the first electromechanical computer from his discovery of the automatic computing relays as well as the term "digital". The first electronic computer was introduced by John Atanasoff in 1939.

The process of digitalization thereafter accelerated, with the development of personal computers such as the Simon in 1950, Apple II in 1977 and IBM PC in 1981 (Vogelsang, 2010). With the introduction of the World Wide Web (WWW) however, the scope, dimension, scale, speed as well as effects of digitalization fundamentally changed, resulting in the increased pressure on the societal transformation process (Khan, 2016).

In 2000, Digitalization began to be used more widely as an IT-political concept and argument for an overall governmental introduction of IT, increased usage of internet and IT on all levels. A similar development began in the general business climate in order to raise awareness regarding the issue and opportunity. In EU for instance, an initiative called the Digital Single Market was developed, with recommendations for national digital agendas in EU, which gradually and positively should contribute to the future societal transformation, with more modern development of communities, structures and to create a basis for e-governance and information society.

The debate surrounding digitalization has therefore gained increased practical importance for politics, business and social issues, and is linked to political work issues for community development, new changes in the practical business approaches, effective opportunities for organizations in operational and business process development, with effect on internal and external efficiency of IT to name a few.

Development: Digitization → Digitalization → Digital Transformation

Digitization is a sub-process of a much larger technological progress (see below): digitization (the conversion), digitalization (the process) and the digital transformation (the effect) that are collectively accelerating the global and societal transformation process.

Digitization

Considered in political, business, trade, industry and media discourses, as " the conversion of analog information into digital form" (i.e numeric, binary format). Digitizing, is technically explained as the representation of signals, images, sounds and objects by generating a series of numbers, expressed as a discrete value (Khan, 2016). According Collin et. al, (2015), etc. the majority of sectors and industries in media, banking & finance, telecoms, med-tech and health care have been strongly affected by this conversion of information.

Digitalization

Unlike digitization, Khan describes this term as the actual "process of the technologically-induced change within the above industries”. This process has enabled much of the phenomena today known as the Internet of Things, Industrial Internet, Industry 4.0, Big data, M2M, Blockchain, Cryptocurrencies etc. The academic discussion surrounding digitalization has been described as problematic with the use of Westerman (2014), Vogelsang (2010), Khan (2016), Chew (2013),[19] as no clear definition of the phenomena has been previously developed. A common misconception is that digitalization essentially means the usage of more IT, in order to enable and take advantage of digital technology and data. This early definition however, has largely been replaced by the above definition, now linked to holistic views on business & social change, horizontal organizational and business development, as well as IT.

Digital Transformation

Finally, digital transformation is described as "the total and overall societal effect of digitalization." Khan says that the digitization has enabled the process of digitalization, which resulted in stronger opportunities to transform and change existing business models, socio-economic structures, legal and policy measures, organizational patterns, cultural barriers, etc.[20] Digitization (the conversion), digitalization (the process) and the digital transformation (the effect) therefore accelerates and illuminates the already existing and ongoing horizontal and global processes of change in society (Khan, 2016, Collin et al. 2015).

Digital Transformation: Opportunities and Challenges

When planning for digital transformation, organizations must factor the cultural changes they'll confront as workers and organizational leaders adjust to adopting and relying on unfamiliar technologies.[21] Digital transformation has created unique marketplace challenges and opportunities, as organizations must contend with nimble competitors who take advantage of the low barrier to entry that technology provides.[22]

Other studies

In November 2011, a three-year study conducted by the MIT Center for Digital Business and Capgemini Consulting concluded that only one-third of companies globally have an effective digital transformation program in place.[23]

The study defined an "effective digital transformation program" as one that addressed

The newest report by MIT Center for Digital Business and Deloitte in 2015 found that "maturing digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how their businesses work. Less-mature digital businesses are focused on solving discrete business problems with individual digital technologies."[24]

In the not so distant future, technologies such as the Internet of Things (IoT) and cryptocurrencies will become an integral part of digital transformation. The IoT can be considered as invisible “everywhere computing” that is embedded in the objects around us.[25]

Digital Transformations can be analyzed and ranked based on the 10S model. One prime example of a digital transformation is Western Digital's Vigiliant Information Systems. They had implemented a factory and corporate VIS system to monitor their progress in real-time. This innovation has helped them stay in the Hard Drive market.[26]

See also

References

  1. 1 2 Khan, S. (2016). Leadership in the Digital Age - a study on the effects of digitalization on top management leadership. Shahyan Khan in 2016.
  2. ↑ Erik Stolterman, Anna Croon Fors, "Information TEchnology and the Good Life", in: "Information systems research: relevant theory and informed practice", 2004, ISBN 1-4020-8094-8, p. 689
  3. ↑ Digital literacies: concepts, policies and practices By Colin Lankshear, Michele Knobel, 2008, p. 173
  4. ↑ Digital transformation: the essentials of e-business leadership, by Keyur Patel, Mary Pat McCarthy, 2000, ISBN 0-07-136408-0
  5. ↑ E-government in Canada: transformation for the digital age By Jeffrey Roy, 2006, ISBN 0-7766-0617-4
  6. ↑ Mass Communication And Its Digital Transformation, by Ramanujam, 2009, ISBN 81-313-0039-0
  7. ↑ Art & Computers: an exploratory investigation on the digital transformation of art. PH.D. thesis, published in Cyber Flux News, July 1997, and in the Encyclopedia of Postmodernism, Victor E. Taylor, Charles E. Winquist, London and New York, Routledge, 2001.
  8. ↑ Digital medicine: implications for healthcare leaders, by Jeff Charles Goldsmith, 2003, ISBN 1-56793-211-8
  9. ↑ Digital Transformation By Mark Baker, 2014, ISBN 978-1500448486
  10. ↑ Bounfour, A. (2016). Digital Futures, Digital Transformation, Progress in IS. Springer International Publishing, Cham.
  11. ↑ Vogelsang, M. (2010). Digitalization in Open Economies, Contributions to Economics. Physica-Verlag HD, Heidelberg.
  12. ↑ Westerman, G. Bonnet, D., McAfee, A. (2014). Leading Digital: Turning technology into business transformation. Harvard Business Press.
  13. ↑ Collin, J., Hiekkanen, K., Korhonen, JJ, the heel, M., Itälä, T., Helenius, M ., (2015). IT Leadership in Transition-The Impact of digitalization on Finnish Organization. Research report, Aalto University. Department of Computer Science.
  14. ↑ Khan, S. (2016). Leadership in the digital age – a study on the effects of digitalisation on top management leadership.
  15. ↑ Leibniz G., (1703). Explication de l'Arithmétique Binaire, Die Sciences. Académie royale des sciences Année 1703.
  16. ↑ Boole, G., (2009) [1854]. An Investigation of the Laws of Thought on Which are Founded the Mathematical Theories of Logic and Probabilities (Macmillan, Dover Publications, reprinted with corrections [1958] ed.). New York: Cambridge University Press.
  17. ↑ Shannon, C. E. (1938). A Symbolic Analysis of Relay and Switching Circuits. Trans. AIEE 57 (12): 713–723. Cambridge: Massachusetts Institute of Technology
  18. ↑ Tropp, H. S., (1993), "Stibitz, George Robert," in Anthony Ralston and Edwin D. Reilly, eds., Encyclopedia of Computer Science, Third Edition (New York: van Nostrand Rheinhold, 1993), pp. 1284–1286.
  19. ↑ Chew, E. K., (2013). Value Co-creation in the Organizations of the Future. Published in: Collin, J., Hiekkanen, K. Korhonen, JJ, Halén, M., Itala, T., Helenius, M., others, 2015 IT Leadership in Transition-The Impact of digitalization on Finish Organizations. ' '
  20. ↑ ibid
  21. ↑ https://hbr.org/2015/08/the-company-cultures-that-help-or-hinder-digital-transformation
  22. ↑ Harvard Business Review, https://hbr.org/2016/03/the-industries-that-are-being-disrupted-the-most-by-digital
  23. 1 2 Digital Transformation: A Roadmap for Billion-Dollar Organization (PDF) (Report). Capgemini Consulting. 2011.
  24. ↑ "Strategy, not Technology, Drives Digital Transformation". MIT Sloan Management Review. Retrieved 2016-01-18.
  25. ↑ Rainer (2015). Introduction to Information Systems, 6th Edition. Wiley, 2015-10-23. VitalBook file. Rainer.
  26. ↑ http://www.business.unr.edu/faculty/kuechler/788/visatwesterndigital.pdf
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