You’d be hard-pressed to find many businesses in 2020 which haven’t already incorporated some form of digital technology into their operations. Much more than just another ‘fad’, this transformation is the product of decades of technological innovation which has been slowly but surely revolutionising the way we live and work. In fact, Digital Transformation will likely continue to play a pivotal role in shaping the global business environment for many future decades.
The origins of digital business transformation
The term ‘digital transformation’ itself was coined relatively recently do describe the changes companies across the globe are undertaking. But the phenomenon which the term describes originates much earlier than the 21st century, at a time when technology was taking its first steps towards digitisation.
While intrinsically related, digitisation and digitalisation are not the exact same thing. The earlier concept, digitisation, describes the shift from analogue to digital technology which was kickstarted in the late 40s by American scientist Claude Shannon and his famous paper, A Mathematical Theory of Communication.
Shortly afterwards, the invention of the microchip and the semiconductor transistor (the latter of which is still popular today) changed the technological landscape forever by making digital computing possible for the first time.
The following decade the ARPANET (predecessor to modern internet) made its debut, along with the famous (and widely used) Moore’s law, named after semiconductor founder and Intel CEO at the time Gordon Moore, who first observed the tendency of computing power to double roughly once a year.
Riding the digitisation wave, the 70s brought us arcade video games, home computers and increased demand for data entry, as organisations doubled their efforts to transfer their records onto a digital platform. Workforce automation then cropped up in the 80s, along with another key invention – the World Wide Web.
Digital business transformation in the 21st century
Following the invention of the Web, the turn of the century saw a global surge in technological innovation, with internet users reaching 1 billion and mobile phones becoming commercially available. Before the 2000s were out, the first stage of the digital revolution had swept across the world.
But technological developments didn’t end there; instead of plateauing, they evolved into digital transformation as we know it today. Starting in the 2010s, companies started rethinking the way they connect to customers, using digital channels and devices to modernise interactions.
These changes were shortly followed by a wider shift in the way organisations do business. Spanning all departments, both in terms of employees and operations, digital transformation redefined how companies used consumer data insights to generate new business. By analysing digital interactions with their customer base, businesses were able to adjust their customer experience in line with the evolving needs of their audience.
The wealth of information organisations were now gathering prompted yet another shift – this time towards a unified digital network which connected various business systems and processes. Armed with this newfound potential for connectivity, companies started shifting away from intermediaries and focused on establishing relationships directly with their customers.
Digital transformation as we know it today – a strategic approach rather than technological upgrade – was first defined in 2015 by Deloitte’s research on the most successful adoptions of DT at the time. From that point onwards, organisations have been backing up their digital ambitions by upskilling their teams and reshaping company culture to view digital transformation as an ongoing effort instead of a one-off project.
The importance of digital business transformation
Far from simply converting information from traditional storage types into code, digitisation has revolutionised the world’s economy and ways in which we interact with businesses, as well as with each other. From its conception in the 50s, through the leap in the 90s caused by the invention of the Web, and all the way into the 21st century, digital transformation has been gradually shaping all aspects of our lives.
Nowadays, companies across all industries are embracing digital transformation and adapting it to their individual needs. With continuous technological advancements and constantly evolving consumer demands, innovation is the new normal and to not take part is to fall behind.
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