Cisco Canada Blog

Digital transformation: A business primer

October 4, 2017

“What is digital transformation?”

If you’ve asked yourself this question, you aren’t alone.

One word – digital – is reasonably straightforward. At its most simple, digital means technology. Any solution or piece of equipment that transmits (or produces) data in your business. Smartphones, laptops, sensors, software, POS equipment, and so forth.

The other word – transformation – is where the definition can go sideways. What is transformation? How do you transform?

I’ll get to that. First, back to that pesky definition of digital transformation.

Cisco defines digital transformation as “…the application of technology to build new business models, processes, software, and systems that results in more profitable revenue, greater competitive advantage, and higher efficiency. Businesses achieve this by transforming business models, creating new customer experiences, and securing everything.”

Which is … many words. Here is the version I prefer:

What is digital transformation?

Digital transformation the application of technology within an organization to deliver more profitable revenue, greater competitive advantage, and higher efficiency.

But, as mentioned above, business leaders – especially small and mid-sized business owners – have more questions once the above is defined. Here, then, are answers to common digital transformation questions.

How do I begin my business’ digital transformation?

The best place to begin your digital transformation is with your IT network. Digital transformation is all about using technologies that rely on connectivity – sensors, software, devices, and equipment – to make your business operate faster, simpler, and better than before. Those technologies cannot do what they are meant to do if your IT network can’t handle the data traveling across it.

If you aren’t certain whether your current network can scale to meet your new needs, your first step should be an assessment from a technology expert you trust. Their assessment will reveal any gaps in your current IT infrastructure that will become painpoints as you transform.

Why is digital transformation important?

Digital transformation is important because all business is becoming digital. The business landscape is rapidly becoming more digital – think Uber, Airbnb, and the bank account you carry in your pocket – and customer demands for seamless, immediate service are increasing. Gartner estimates that by 2020, 75 per cent of businesses will be digital businesses … or will prepare to become digital businesses. (They also predict only 30% of these transformations will be successful.) Without evoking too much of an ‘innovate or die’ scenario – could you survive if your competitors made their operations more efficient, cost-effective, and simpler? That’s the question facing all business leaders.

A final note to ponder on this question: Former Cisco CEO John Chambers predicted that 40% of companies will ‘die’ by 2026 as a result of their resistance to digital transformation.

Am I ‘doing’ digital transformation properly?

The answer to this question lies with you and your technology advisor (or partner). The best way to determine if your digital transformation initiatives are a success is to set clear, measurable goals before you begin. For example: set a goal of automating web chat services within 6 months, with the desired impact of reducing customer wait times by 20% and increasing web conversation rates by 5%.

Digital transformation will not look the same for every business. What is most important is that you identify the areas within your organization that will most benefit from new technologies, and begin there. These projects will reap you the most success, and provide valuable learnings for subsequent initiatives.

If you’re ready to transform your business, find out how digital-ready your network is with this easy-to-use assessment.

Do you have questions about digital transformation not answered here? Leave a comment.

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