Digitalization and digital transformation
To say that the challenge companies are facing is “digitalization” is far from the whole story. If we limit the purpose of a company to mere organizational efficiency aimed at doing things better so to make more profit, we overlook the important role that the company has in society.
A company’s state of health is measured against economic and financial KPIs, but also on its ability to impact on society, on environmental sustainability and on the ability to favor, stimulate and predict change in a timely manner.
The real challenge for a company today is knowing how to blend into an ever-changing context, in which market relations, patterns of consumption and interaction with the surrounding environment are being constantly redesigned.
Digitalization is a tool that the company can use to improve and keep up with the times. “Digitalization is that activity aimed at optimizing processes through the use of automation and re-engineering; activities made possible thanks to information technology “. Digitalization is thus a course of action the entrepreneur chooses to take.
When digitalization enters the behavioral models of individuals, we can speak of “digital transformation”.
Digital technologies have become pervasive; they influence the way we communicate and stay informed, the way we make purchases and build business relationships or friendships, making it increasingly difficult to separate the digital mode from the traditional one.
We thus move into a transformative dimension which has become both a social and cultural phenomenon. Our perception of the world around us changes. Our sense of things changes: the value of relationships, goods and services, organizations, business models. In such a context, roles and professions are redefined.
What is “smartness”?
Virtual and real become part of an ecosystem founded upon “smartness” – intelligence, speed and flexibility. Upon this basis, the user experience, for whoever who is immersed in this ecosystem, is redefined (for example smart city, smart working, smart living).Digital transformation is the effect produced by the spread of digital technologies in people’s lives.Digital transformation is not a choice, but a given condition which cannot be overlooked, one in which “technology is the engine of development and people are its protagonists.”Thus the real challenge that companies face is adapting to this condition, generating value for themselves and for the context they operate in.
“Innovation occurs when an invention finds a marketable application. Digital innovation is an effect of the applying digital technology to a process, product or service, and digital transformation is the context in which all of this takes place today .”
Reinterpreting company organization in the light of this transformative dimension means redefining one’s competitive advantage, redesigning relationships within the value chain (source: Porter’s value chain).Like it or not, this revolution of meaning is here to stay. We need to roll up our sleeves and take action if we are to avoid extinction. The first thing to do is to make sure digital technological innovation is on our own strategy agenda, spreading a culture of “thinking and acting digitally” at all levels in the company.We need a change of perspective: not taking a defensive posture but rather embracing digital transformation.
Digital transformation- how to seize the opportunity
Digital transformation and digitization are opportunities; we just need to understand how to seize them for the benefit of the company.According to the Harvard Business Review, there are three fundamental things that the entrepreneur needs to do:
- look outwards. To understand the future, it is not enough to look inwards, you have to look at the world outside and grasp the signals and stimuli it generates;
- develop a multitude of different relationships all round, be at the center of information flows;
- update management and leadership best practices. We need to carry out ever more experiments, encourage pilot projects and implement new methodologies.
The alliance between companies and talent task forces
Nowadays, any far-sighted, open-minded, visionary entrepreneur needs to seek alliances and find spaces in which to cooperate with professionals who know more and can provide them with growth prospects. In other words, young managers and professionals who:
- have those strategic skills which will enable them to identify the right way forward for the organization;
- have a good knowledge of technologies, and who know how to interpret and read the underlying dynamics and understand their impact on the market and on society;
- share the basic values of the company but know how to share their knowledge and involve people in a digital culture;
- are able to generate a change in leadership, spreading a different mindset, new behavioral models oriented towards sharing and cross-fertilization. Innovation, whatever it may be, can be generated by players within the company themselves, provided they are stimulated by inputs from outside;
- are able to interpret the company in an Open Innovation approach: scouting for talent and/or external work groups that can bring innovations into the company, groups with which to make partnerships or set up internal multidisciplinary teams trained to think like startups.
All this requires awareness from the entrepreneur. They must be willing to take a step back, aware of the fact that their past represents an important asset upon which to base the company’s values, and endow the company with professionals with digital transformation expertise, for whom it is easier to look ahead and build a new future.
Sostenibilità digitale, Stefano Epifani (2000) – lecturer in Internet Studies at Università La Sapienza, Rome
La duplice alleanza, Marta Basso (2019) – entrepreneur and blogger
Competitive Advantage, Creating and Sustaining Superior Performance, Michael Eugene Porter (1985) Harvard Business Review