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4 Types of Digital Transformation

May 20, 2022

Trends & Views

Digital transformation is not a single thing. In fact, there are 4 types, of which businesses should be aware.

Process transformation

Whether it’s data, analytics, APIs or machine learning, among other technologies, businesses are focusing on new ways to reduce costs, improve quality and reduce cycle times for business processes. For example, the ability to order from any device has completely changed the landscape.
Some businesses have already started using “robotic process automation” (RPA) to simplify back-office processes, including legal and accounting departments. Process transformation will create significant value for the business.

Business model transformation

Unlike process transformation, which is a transient process, business model transformation targets the key elements of infrastructure and how value is ultimately gained in a particular industry. In essence, businesses are using digital transformation to change traditional business models. Interesting examples of this reinvention of the business model are the redesign of the way Netflix distributes video.

Domain transformation

A classic example of how domain transformation works is the online giant Amazon. It first entered a new domain with the launch of Amazon Web Services (AWS) and is now the dominant cloud computing/infrastructure service, in a space that until recently was the “playground” of giants such as IBM and Microsoft. Amazon is an example of how new technologies are redefining products and services, blurring the boundaries between different industries, creating a new context for competition. Domain transformation currently offers perhaps the most significant opportunity for growth and profitability.

Organizational transformation

Redefining the mindset, processes, talents and capabilities of a business is always necessary to achieve long-term digital transformation regardless of the industry. The most successful businesses have understood that digital transformation requires agile workflows, decentralized decision-making, a positive bias towards testing and training, and even greater reliance on different business ecosystems.

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