There must always be a base from which to innovate. With the underlying analysis, shifting funds from infrastructure to innovation is possible. If not, your infrastructure is at risk. In many situations, innovation may necessitate new corporate investment.
IT transformation is the comprehensive review and reworking of an organization’s IT infrastructure to increase effectiveness and delivery in a digital economy. Business leaders, such as the CIO, are in charge of IT transformation, which is the cornerstone of an organization’s overall digital transformation plan. It may entail updating and changing network infrastructure, hardware, software, IT service management, and the methods used to store and retrieve data. Informally, the motto “rip and replace” may be used to describe IT transition.
What is IT transformation?
The majority of consumers in the modern market want to feel exactly the same way when using technology for work as they do when using it for personal interests. However, a firm may find it challenging to accomplish this. Because of this, businesses are calling for more hybrid IT solutions that will ensure that customers receive the best possible service.
The ultimate goal of every corporate CEO is to increase staff productivity and effectiveness. This justifies the necessity of IT transformation. It offers significant solutions for crucial corporate processes, including finance and human resources.
Understanding the IT transformation strategy
Businesses must take action to keep up with a market that is becoming more digital and competitive by not just improving their current systems but also developing and acquiring new applications and services that provide deeper insights into their operations, industry, and clientele. IT transformation frequently seeks to transition the IT department from a reactive, rigid organization to a proactive, adaptable component of the company that can react fast to shifting digital business requirements and make better-informed decisions.
The ultimate objective of these efforts, according to Deloitte, is to “reimagine IT development, delivery, and operating models, and to enhance IT’s ability to collaborate effectively within the enterprise and beyond its traditional boundaries.”
Business transformation
Making substantial changes to the way a corporation or organization operates is referred to as “business transformation.” Personnel, procedures, and technology are all included in this. Organizations that undergo these changes are better able to compete, become more efficient, or completely change their strategic direction.
Business transformations are large-scale, seismic adjustments that firms implement to spur development and change beyond the bounds of incremental improvements. The focus is broad and strategic, including changing to new operational or commercial models.
Business transformations are undertaken by organizations to increase value. To maximize the potential of the business, it can be necessary to optimize personnel potential, harness intellectual property and proprietary technology for other uses, or improve efficiency.
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Application transformation
Application transformation is the process used to analyze old software in a firm and evaluate whether applications can be modernized or moved to the cloud. The apparent first step is to take stock of what you already have, but for larger firms, some legacy systems contain layers of out-of-date languages with lost KT.
Plotting the application depending on its complexity and importance to the client and the organization’s future can therefore be the first step. From there, your “initial wave” efforts toward modernization will be those that are high-value and low-effort. The discovery process for application transformation makes it possible to choose the most appropriate course for modernization.
Benefits of IT transformation
In order to supply automated services, cloud computing, and new operating models, successful IT transformation creates a strong core infrastructure. Additionally, it streamlines and quickens the deployment of IT services while lowering deployment risk. IT transformation paves the way for more affordable, flexible, and innovative IT as a service delivery.
Organizations may free their IT budget from operational costs and allocate more money for digital transformation by optimizing existing IT cost models. Better business-IT alignment is another benefit of IT transformation.
IT transformation challenges
Since many firms were not founded in the digital era, they lack the freedom to quickly and totally take out and replace all current IT systems. These businesses must contend with outdated business models, software, and systems that limit their ability to transition while planning how to adopt contemporary techniques and methods. This involves diverting funds and resources from established programs to fresh IT transformation projects.
Like any significant organizational change, IT transformation has an impact on corporate culture, business standards, and workflow. In order to successfully convert an organization into a digital business, CIOs must first successfully navigate culture, according to research firm Gartner. In addition to organization-wide communication and training about new IT processes and technology, having a shared vision of the organization’s future state is crucial.
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IT transformation examples
If you’ve ever seen The Office, you’ve already witnessed (a drawn-out and undoubtedly imperfect) digital revolution over the course of 10 seasons. Although the purpose of this humorous example from pop culture was not to impart knowledge, it is a great illustration of how a traditional company and its workforce handled the transition to digital. Mike was not a strong supporter of the shift, but we shouldn’t dwell on that for too long; instead, we should move on to other examples of IT transformation in action.
UPS
One of the sectors affected most significantly by the development of digital technology is unquestionably logistics. UPS is a supply chain management and worldwide shipping business. Given that it was established in 1907, we believe that the digital revolution was simply one change in a lengthy series of changes. Although UPS shows it is not always true, established businesses often have greater trouble implementing IT transformation.
They created a fleet management solution in 2012 that employed machine learning to plan the most efficient delivery routes. The device markedly enhanced driver productivity while lowering fuel costs and carbon emissions. Software development is thought to be saving UPS $300M to $400M annually.
The implementation of numerous data-driven solutions to improve UPS’ internal operations is another illustration of the company’s IT transformation efforts (such as sorting packages, loading trucks, etc.).
UPS never stops and consistently takes on new tasks associated with its IT transformation. The company has saved hundreds of millions of dollars and is still one of the biggest shippers in the world since it actively adopted the shift.
Ikea
The international behemoth Ikea creates and markets ready-to-assemble furniture and home decor. Ikea made the decision to go digital in 2018 after operating an analog business for over 80 years and becoming one of the most recognizable brands in the world.
The business made a choice to bring on board a digital guru to guide it through the procedure. At the beginning of 2018, former Google and Samsung advisor Barbara Martin Coppola joined the Ikea team as the Chief Digital Officer.
Ikea made the decision to modify its stores and use them as fulfillment centers in order to adapt to the new business model. They employed algorithms to manage the supply chain in order to run two businesses concurrently from the same location (from thousands of locations, including Ikea shops and delivery centers). Additionally, they concentrated on creating analytics and incorporating them into decision-making.
Ikea has the same clientele, both in-store and online. The business made the decision to link in-person and online contacts with customers in order to improve customer experience and maintain consistent branding across all channels. For instance, one may begin planning their new kitchen on the Ikea website before visiting the shop. They can locate themselves by connecting to a remote customer meeting location in the store.
Ikea, a retailer, concentrated on growing its online business. Running a traditional store and an internet store are completely different tasks. Running both at once is a very different matter. It is impossible to define the boundary between one phase of the IT transformation and another.
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IKEA must incorporate digital into every facet of its business, as stated by Barbara Martin Coppola. While the company’s ideals remain constant, the methods of operation change to reflect the evolving business and lifestyle environments.
Adobe
American software business Adobe was established in 1982. Photoshop, Adobe Acrobat Reader, and Illustrator are some major products you have definitely used.
Adobe Systems, the company’s previous name, offered boxed software back then. The business took a big risk by switching from a license-based approach to a subscription-based model when the 2008 financial crisis hit. It reorganized its service portfolio into three cloud-based solutions: Experience Cloud, Document Cloud, and Creative Cloud. This is how Adobe evolved into a cloud business using the now-ubiquitous SaaS (software-as-a-service) model.
In the meanwhile, they bought an e-commerce platform and a web analytics firm (Omniture) as part of their IT transformation (Magento) efforts. The business also understood that only with the top talent would they be able to accomplish their objectives. As a result, Adobe concentrated on ensuring employee satisfaction and made investments in developing an employer brand and employee-focused work culture. In order to keep track of the company’s health, they also used a data-driven operation model.
What is the difference between IT and digital transformation?
Rethinking and changing business models while keeping the client at the forefront of our attention is a part of digital transformation. The practice of utilizing digital technology in all business domains to either develop new processes and customer experiences or adjust existing ones will fundamentally enhance how firms provide value to their consumers.
It is essential to comprehend what digital transformation is not in order to have a greater understanding of what it is. Digital transformation does not just entail boosting your social media presence and engagement but also means overhauling your current business procedures. Every aspect of the business is affected by digital transformation, which goes beyond processes and products to affect the organization’s culture as well. This includes how decisions are made, who is hired, how post-sales service is provided, and even how employees interact with one another internally.
It’s wise to clarify right away that IT transformation is distinct from digitization, which is the process of converting anything from analog to digital, and distinct from digitalization, which is the efficient use of data to streamline tasks. The CTO and the CIO are typically in charge of leading digital transformation, and they may collaborate with suppliers to partially or wholly outsource their transformation process.
IT transformation vs digital transformation
These two names are frequently confused with one another and used interchangeably. Let’s examine the distinctions between the two so that you may develop a digital transformation strategy that is appropriate for your company.
The overall approach for digital transformation must include IT change. This simply suggests that IT transformation is necessary for digital transformation to occur. A digital transformation’s foundation is formed through IT transformation.
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The digital transformation of a business affects its people, processes, products, and culture. The digitization of information systems like ERP and others, in contrast, aims to boost productivity and automate more processes. The approach behind digital transformation is customer-driven, with a focus on the preferences and happiness of the customer. IT transformation may not have a strong customer-centric focus and instead focuses mostly on enhancing the IT infrastructure by utilizing the advantages of the most recent technologies.
While IT transformation primarily falls under the purview of IT managers and teams, a digital transformation project necessitates the effort and participation of the entire business. Unlike IT transformation, which is driven by one function, digital transformation is a company-wide progression.
The size of their spheres of influence is another distinction between the two. The scope of IT transformation is restricted to changes in infrastructure, such as cloud computing, network needs, hardware, software, and data management. On the other hand, digital transformation uses all of these tools and covers every aspect that has an impact on an organization, making it far more comprehensive.
Digital transformation lacks an “end state,” whereas IT transformation has a well-defined ending state and aim. This is due to the fact that the process of digital transformation is constantly changing and requires good long-term management of changes in technology, business, and consumer behavior.
There will always be a need for creative strategies that foresee and satisfy client expectations as a result of emerging technologies and changing market dynamics. You may promote a culture of constant change that fuels the expansion of your company by looking at chances to provide relevant solutions for stakeholders and boost operational efficiencies with the cloud.
Despite the numerous advantages of digital transformation, firms frequently fail to realize them for a variety of reasons, one of which is failing to select the appropriate strategic partner to assist with the process. For a long-term, cost-effective, and significant transformation, you must work with a seasoned organization that matches the digital transformation techniques with your unique business demands.
The Treehouse Tech group, which has years of experience in digital transformation and automation, is committed to creating data-led digital transformations that keep businesses ahead of the curve by combining big data with cutting-edge analytical software and cloud architecture.
Conclusion
IT transformation is the process of using digital technologies to reinvent your company for the benefit of both you and your consumers. Running it effectively requires a fundamental change in perspective, yet there don’t seem to be many other options. The clientele has already embraced the digital era; therefore, going digital offers more benefits than just a strategic advantage.
Because of the quickly changing environment (VUCA) and the gradual adoption of technology, businesses are under tremendous strain. In light of this, a well-planned and executed digital transformation strategy may alter one’s place in the race while also leaving one with an open mind and the foundation for future success.
One of the biggest advantages of IT transformation is that it will enable your company to gather and analyze data that it can turn into insights that generate money. In the past, you may have collected and used no data, or your data may have been dispersed over numerous disconnected platforms. Strong data collecting, centralized data storage, and the development of technologies to evaluate and transform data into information that supports informed business decision-making will be made possible by digital transformation.
