Digital Transformation vs. Business Transformation
Understanding the difference between digital transformation vs. business transformation can be challenging for many organizations. The two terms are, in many cases, closely related—they refer to two processes that help establish an environment of success for your business. Keep reading to learn more about the differences between digital transformation vs. business transformation.
What Is Business Transformation?
Business transformation refers to significant changes in the way a business operates. It can involve changes to a business’s structure, consolidating existing processes to a shared services operating model, or overall strategy. Business transformation is often driven by a variety of factors, such as the need to adapt to a changing market, improve efficiency, respond to new opportunities, or centralize certain functions that are common across departments.
Business process transformations can be complex and multifaceted, often requiring a business to reassess and redesign many aspects of its operations. Because of this, it can also be a disruptive process and may require significant investments of time, money, and other resources.
However, if successful, business transformation can lead to significant improvements in a business’s performance and competitiveness. It can help a business to become more agile, efficient, and responsive to change. It can also create a more resilient business model and help you provide friendlier agility and competitive advantage.
What Is Digital Transformation?
Digital transformation, on the other hand, refers to function-specific changes within your business’s framework of people, processes, and technology. This transformation process is the driving catalyst for many elements of business transformation, as the successful integration of optimized processes and new technologies can change the way it operates at its core.
For example, a business that undergoes digital transformation might use technology to automate specific processes, such as supplier management, contract management, procurement or accounting. This can improve how your business operates and delivers value to the organization by improving overall efficiency and cost-effectiveness.
Digital transformation is more than just the process of adding new technologies to your business processes. It’s a comprehensive, ongoing process of reviewing and optimizing your people, processes, and technology that helps eliminate redundancies and bottlenecks while enabling your business to perform better. Explore our blog and discover five key signs that your business needs to undergo digital transformation today.
Aligning Digital Processes With Overarching Business Goals
When performed correctly, the differences between digital transformation vs. business transformation fall by the wayside, and the transformation processes blend together seamlessly. Although digital transformation can be its own standalone transformation initiative, it is often used as a means to achieve overarching business goals within a business transformation, such as reducing operating costs or risk mitigation. For this reason, digital and business transformation goals must work in unison.
When you align your digital transformation strategy with your overall business goals, you ensure that all of your organization’s people, processes, and technology are working towards the same objectives. In addition, aligning your digital transformation with overall business goals helps ensure that the technology being implemented is used to benefit your business and its stakeholders. This can help optimize the technology’s value and maximize its impact on your business.
How Digital Transformation Impacts Business Transformation
In many cases, a successful business process transformation is driven by the integration of new technologies and processes. Here are a few examples of how digital transformation drives business transformation:
- Process automation: Optimizing your sourcing process to streamline supplier and stakeholder communications, then overlaying technology to eliminate redundant, manual processes. In many cases of business transformation, these are major goals.
- Data visibility and informed decision-making: Integrating new technology allows disparate systems and processes to communicate, providing access to a large volume of data. With this data, you can make strategic, informed decisions and process improvements that align directly with your overarching business goals.
- Streamline communication and collaboration: With the successful integration of new technology, you make it easier for your employees to work together and collaborate. This can improve overall productivity, streamline time-consuming processes, and improve the customer experience.
Crafting a Digital Business Transformation Strategy
To ensure that your transformation processes are successful, you need a comprehensive digital business transformation strategy. Here’s an example of what one would look like:
- Assess your current business operations and identify areas where your digital technology could be augmented to improve efficiency, reduce costs, or increase competitiveness. Consider your stakeholders’ needs, your team’s capabilities, and the resources available to you.
- Determine your goals and objectives for your digital business transformation. What do you hope to achieve through your efforts? Be specific and measurable, and consider how your goals align with your business’s overall vision and strategy.
- Identify the technologies and tools you need to support your digital business transformation. This might include software, hardware, or other resources. Consider how these technologies will integrate with your existing systems and processes.
- Develop a plan for implementing your digital business transformation. This should include a timeline, a budget, and a clear set of deliverables. Identify any risks or challenges and develop contingency plans to address them.
- Communicate your plan to your team and stakeholders, and seek input and feedback. Ensure everyone understands their roles and responsibilities in the digital business transformation process.
- Implement your plan, starting with small, low-risk projects and gradually scaling up to larger, more complex initiatives. Monitor the progress of your efforts and adjust your plan as needed.
- Evaluate and optimize your digital business transformation strategy to ensure that it is aligned with the needs and goals of your business. Stay up-to-date with developments in technology and industry trends, and be willing to adapt and adjust your strategy as needed.
Transform Your Business With Velocity Procurement
At Velocity Procurement, we understand how important it is to optimize your procurement operations. By reassessing and readdressing your processes, technologies, or business model, you can easily identify and eliminate functional inefficiencies while reducing costs and improving overall performance.