What Is Digital Transformation in Enterprise and How Can Your Business Start It?

Enterprise digital transformation

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Digital transformation is increasingly hard to ignore. Innumerable small and mid-size businesses have adopted digital tools to automate their workflows. To remain competitive, large enterprises must follow suit and enable digital transformation in the most efficient way.

According to Research and Markets, the global digital transformation market is expected to reach $1,009.8 billion by 2025. As for global investment in digital transformation, it is expected to almost double between 2022 and 2025, growing from $1,8 trillion to $2,8 trillion.

For any type of business, digital transformation is the most crucial yet challenging task. In the field of larger-scale enterprise there are extra challenges, associated with multiple departments, complex software systems and numerous independent processes.

Read our guide to find out how digital transformation creates competitive advantages for enterprises, what challenges enterprises face when enabling digital transformation, and how to embark on digitalization and ensure its success.

What is enterprise digital transformation?

Enterprise digital transformation is the process of integrating digital tools and technologies to improve business processes and automate workflows. It’s an ongoing activity that includes revising and analyzing existing business processing, and introducing measures and solutions to streamline and renew them to boost their efficiency.

A few examples of digital transformation at the enterprise level include:

  • Implementing machine learning and analytics tools to gain better insights into customer behavior
  • Replacing on-premise data storage with cloud-based data management systems
  • Transforming inventory management systems with the help of IoT smart sensors
  • Digitizing day-to-day operations (such as signing a contract or sending an invoice) and going paperless

What are the main areas of enterprise digital transformation?

There are four key areas of enterprise digital transformation:

  1. Organization’s core operations. This involves digitizing business processes and automating workflows.
  2. Customer/employee experience. Here businesses need to reconsider the mechanism for collaborating with customers/employees.
  3. IT infrastructure. The process of integrating and adopting new digital tools and software systems.
  4. Data management and analytics. This involves building a data-driven organization that relies heavily on data analytics.

Want to integrate data analytics to your business processes? Reach out to our big data consultants

How is digital transformation different in enterprise?

At the enterprise level, business operations involve multiple pieces of software and numerous processes that influence one another. This means that as well as implementing new digital tools it’s necessary to ensure their smooth adoption across all departments.

What’s more, a typical enterprise generally has complex infrastructure, meaning that any digital transformation will require revision of internal processes and integration with all existing tools and systems. That is why enterprise digital transformation initiatives are usually more intricate, problematical and expensive compared to digitization in smaller and mid-size organizations.

Key benefits of enterprise digital transformation

Enterprise digital transformation benefits

By adopting digital transformation for your enterprise you can expect a range of improvements, from enhanced collaboration and productivity to data-driven decision-making.

Enhanced collaboration

Smooth collaboration between a company’s various departments is a must, since any gaps or inefficiencies in the process lead to delays and poor overall performance. Implementing digital solutions, such as project management tools or task management software, can help you to facilitate collaboration inside your organization while also supporting your efforts to ensure that all employees are on the same page.

Data-driven decision making

The larger your enterprise, the more customer data you accumulate and process on a daily basis. With the help of digital technologies, such as big data and data analytics, you can process enormous volumes of data and get actionable insights to improve your business functions and decision-making.

In addition, by harnessing the right data at the right time, you can unlock customer demands and improve your customer-centric services.

Improved productivity

Digital transformation in an enterprise helps to automate manual and repetitive processes. As a result, your employees are able to focus on the more important business activities that require attention and involvement. They can also accomplish more and achieve better results. Importantly, this will lead to reduced operational costs, streamlined processes, and fewer human errors.

Enterprise digital transformation trends

The key trends and drivers of digital transformation in enterprise include the use of digital twins, master data management (MDM), blockchain technology, and augmented intelligence.

Digital twins

Digital twins are virtual replicas of real-world objects and systems. They support digital transformation in the enterprise by simulating real-life scenarios and providing insights for improvement. With digital twins, enterprises can optimize workflows, reduce costs and enhance customer experience.

A few examples of how enterprises use digital twins include:

  • Predictive maintenance. With the help of special sensors, digital twins can simulate equipment performance and spot potential issues, thus enabling organizations to proactively perform maintenance procedures.
  • Workflow improvement. Digital twins can help you simulate your entire business processes, identify inefficiencies, and optimize costs.
  • Supply chain optimization. By simulating your supply chain you can optimize logistics, minimize risks, and reduce inventory expenses.

Master data management

Master data is the core business information essential for running business operations through providing context for various business entities and transactions. The use of MDM solutions can help you consolidate vital and relevant information across your organization, ensure data consistency and integrity, and eliminate data redundancy and inaccuracy.

By embracing master data management solutions you will find it easy to derive holistic business insights while also improving the overall quality of your data.

Enterprise blockchain

An enterprise blockchain is a permissioned blockchain system that relies on a secure and tamper-proof digital ledger used to record transactions. Enterprise blockchain platforms were designed specifically for large organizations to help them streamline business workflows on a massive scale.

Enterprise blockchain platforms can help you increase security, thanks to data encryption and network accessibility restricted to authorized users only. What’s more, with blockchain a verified record cannot be tampered with by network users: this reduces the chance of fraud or other interference by malicious actors.

Augmented intelligence

Augmented intelligence is the concept that combines artificial intelligence with industry professionals, namely data scientists, to provide actionable insights. This concept presupposes that machines and humans work together to collect and analyze data. For example, intelligent machines can gather and clean data for data scientists who will go on to discover patterns and market trends, thus enabling businesses to make informed decisions.

The use of augmented intelligence will help minimize repetitive tasks, allowing your employees to focus on implementing novel business strategies, designing new revenue models, and all the other activities that support business development.

Get more insights into digital transformation trends via our article

What are the challenges of digital transformation in enterprises?

Slow adoption of new technologies, compliance with business regulations and standards, and a shortage of the required IT skills are the most common challenges that large enterprises face during their digital transformation process. Let’s talk about each in detail.

Slow adoption of new technologies

Many enterprises face the problem of data invisibility across multiple departments and teams, which leads to inefficient workflows and poor change management. Similarly, driving the adoption of new digital tools and technologies becomes a knotty process for business leaders.

To avoid any pitfalls associated with technology adoption you must provide comprehensive onboarding training and ongoing support for employees at all levels. You should develop a proper communication strategy to make sure that all employees understand the value of each digital technology and its impact on the overall business process.

Difficulty complying with business regulations

Enterprises commonly deal with complex regulations and business standards, which is why the adoption of any new technology creates legal and compliance risks. However, these risks can be avoided through proper research before the digitization project kick-off.

You’ll need to conduct risk assessment research that will cover all organizational, legal, and compliance issues. In addition, make sure to sign appropriate vendor contracts to mitigate legal and commercial risks.

Lack of required IT skills & talent shortage

A high-level IT skillset is a must if you want to accomplish digital transformation. According to research conducted in the UK by Gallup and Amazon Web Services, 72% of UK businesses have vacancies for employees with digital skills, even as more than two-thirds (68% of businesses) find it a challenge to hire digital specialists.

To deal with this situation, enterprises should consider engaging third-party consultants who can help bridge the gap and take care of cybersecurity, required integrations, data analytics and migration. It’s also advisable to consider creating an in-house team that will be able to manage IT operations and strategic planning.

Check out this guide on how to hire qualified development team for your project

How can you start enterprise digital transformation?

Any digital transformation initiative starts with the creation of a digital strategy. Here you need to ask yourself the following questions:

  • What are your digital transformation goals?
  • What are the desired digitization outcomes? Automated workflows? Better customer experience?
  • Where do you need digital transformation? Core business workflows? Data management?
  • Who will be in charge of the digital transformation program?
  • What technologies and tools will you rely on to enable digitalization?
  • What business processes will require restructuring?

The entire digital transformation process can be broadly divided into 4 main steps, which are roadmap creation, introduction of new digital tools, restructuring of the processes, and learning from acquired experiences.

How to start enterprise digital transformation

Step 1. Create a roadmap

Here you’ll need to map out your digital transformation vision and strategic goals. You should document all the features and functions that the new systems and services must have and you should also create a clear implementation roadmap with properly-defined phases and milestones.

Step 2. Introduce new digital tools

You need to choose wisely the technologies that will support your digital transformation process. The technologies that you go for should align with your business goals, be it standardizing workflows or improving collaboration with clients.

Step 3. Restructure the processes

To achieve digital transformation it is not enough to merely eliminate legacy systems and implement new technologies and systems. You’ll need to adjust and overhaul workflows at all organizational levels to accommodate change.

Step 4. Learn from the acquired experience

A good digital transformation requires an agile mindset. With every new implementation take time to reflect on results and lessons learned and make the necessary adjustments based on the insights gained.

Check out how we helped a grocery store enable digital transformation

Closing thoughts

Digital transformation in an enterprise is a complex process which goes hand-in-hand with a variety of challenges such as complex existing infrastructure, lack of required digital skills, and compliance issues. However, when done right, digitalization can help you automate business processes, improve productivity, and cut costs.

Here at PixelPlex we can assist your digital transformation initiatives — from selecting the right technologies to building custom solutions. We’ve been delivering software solutions for 16 years, and our team can handle any conundrum. Reach out today to our technology specialists for expert advice.

author

Darya Yatchenko

Lead Copywriter

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