No word is currently used as often in the leading magazines as the “digital transformation”. So the question arises: What is the digital transformation and how can it be defined? This article is intended to summarize some points of this trend and to show not only a formal definition but also the reasons, potentials and actors of the “buzzword”.
Digital Transformation Definition
Digitization is generally understood as a digital transformation and representation or implementation of information and communication or the digital modification of instruments (Gabler Lexicon). “Digital Transformation is understood as the exponential and lasting change of society and companies based on technology” (Lindner and Leyh 2018). Petry (2016) sees the rapid technological development, which has become faster and faster in recent years, as the basis of digitalization and therefore speaks of the age of acceleration. Hoffmeister’s book also finds that the basis of digitization is also a kind of domino effect: existing technologies thus pave the way for further technologies.
Digital transformation is therefore a process of change due to high-speed digital technologies. The driving force behind this digitalization is the changes in customer requirements that can only be served by digital technologies in many sources. A good example of this is the streaming service Spotify, which makes music accessible anytime, anywhere, anytime, and cost-effectively (to some extent even free).
Overall, the academy distinguishes between enablers and actors. “Enablers” are more or less “enablers” and include, but are not.
- to the first digital technologies (cloud computing, …),
- digital infrastructures (protocols,…) and
- last but not least digital applications (online banking,…).
On the basis of these “enablers”, new exploitation potentials are emerging in new areas. Companies are starting to explore them and try them out in their first pilot projects. Examples are: digital business models and digital value creation networks. Digital business models describe the change from analogue to digital models. A good example is the online ticket of Deutsche Bahn. Digital value-added networks are, for example, virtual teams.
The digital transformation affects many people: entrepreneurs, researchers and employees, as well as many other citizens of the Federal Republic and beyond. They can now communicate with each other in real time or share events from their lives in the live stream. Only yesterday I connected with my toothbrush. However, these new possibilities also have downsides: lack of data protection and information overload are just two of the negative consequences.
Another actor is companies. Here, work is transformed into so-called digital work – business models are also changing fundamentally. Science and teaching in the form of new possibilities for archiving, publishing and preparing research and e-learning are also affected. Digitalization also offers numerous challenges for governments: the main task here will be to guide this transformation through laws and directives as well as to transform the regulatory processes.
Drivers of digital transformation
But why are we talking about a digital transformation right now – why is the speed fast enough right now? To answer this question(s), Petry (2016) provided the following diagram and drivers for digital change. It starts with the exponential growth of companies with the core themes of networking, AI and big data. The consequences are above all the change in the work itself, that of customer behaviour and that of the general competitive situation.
But we have been digitizing ourselves for 50 years!
Currently, the biggest criticism of the thesis on digital transformation is that we have been digitizing ourselves for many years. That is right and completely hits the core. If you look at current literature or directly into the companies, however, you notice a serious difference: While many years ago we were still largely digitalizing on the surface, companies are now moving into a deeper digitalization. A good example is the hairdresser’s visit: Here I book my appointment via an app. This approach is definitely digital. However, the actual cutting process is still carried out analogously. Classic people business is therefore not scalable because one employee is required per customer. Similar to consulting, where many tools support the consultant, but the actual consulting still takes place analogously and the consultant himself is not yet digitized. For more information, see the article on Consulting 4.0. This shows two examples of classic people business. Of course, there are no direct answers to these questions yet, but there is currently a clear trend towards deeper digitization with fundamental behavioural change. Digital transformation is therefore a profound social change in people’s behaviour through digital technologies. An existing example is remote work instead of a classic attendance requirement.
Evolutionary Stages of Digital Transformation
In the blog of the Social Collaboration Academy I have also found a nice “opinion” on the criticism that we have been in a digital transformation for ages: according to the article, there are 4 stages of digitization – but we are only talking about a digital transformation since we try to connect the real world and the digital world.
- The first stage of evolution lasted from about 1990 to 2000 and dealt with the networking of computers.
- In the second evolutionary stage of approx. 2000 – about 2015 it was primarily about a general acceptance and general everyday introduction and use of mobile devices.
- The third stage of evolutionnow before us, the duration of which experts estimated from around 2015 to 2030, focuses on topics such as the general maturity of systems and the Internet of Things.
- With the fourth stage of evolution,which is scheduled to begin around 2030, there could be a complete fusion of the real and digitally networked world.
Transformation, change, evolution or revolution?
There are many terms for digital transformation and just as many opinions everywhere. Is it a digital transformation or not? A transformation has a beginning and an end. Change represents a state that transitions to a different state. Evolution stands for the peaceful development of something and revolution for a fundamental, often violent, innovation of a respective status quo. Read also my article on digital R(evolution). Many simply refer to digital transformation as “digitalization.” However, this would simply mean that something analog ousts is becoming digital. What do you think: Which “label” should you miss the digital transformation?
Digitalization in German companies
Digitalization is not a new topic in the German corporate landscape. Processes have long been digitally supported or even fully automated. The main difference in the current discussion is the increased speed and complexity of the change processes, which can now bring profound process changes and even job losses (Lindner 2019).
In my doctoral phD Lindner (2019), I have already identified some examples: for example, Siemens to automate more than 7000 administrative jobs by 2020 (Heise 2018). Deutsche Telekom is also testing the use of chatbots in customer service, which could change many jobs (Handelsblatt 2018) and DHL has been experimenting with the delivery of packages with drones since 2014 (DHL parcel copter T3N 2018). Another example is the efforts for self-driving cars at Audi, VW and Daimler, which could fundamentally change the overall mobility in Germany (Manager Magazin 2018).
These few examples show that, according to the practical literature, digitalization could bring many profound changes.
What is digital transformation?
Many companies have been driving the digitalization of society for a long time. But we are now talking about digital transformation because of the speed and the profound digital changes. Whereas digital technologies were often used only “on the surface” before, these are now profound changes right down to the original business model. In summary, we are also talking about a digital transformation or a digital evolution or revolution. Here you can also read my article on digital (R)evolution – another recommendation is the book by Petry.Genderhinweis: Ich habe zur leichteren Lesbarkeit die männliche Form verwendet. Sofern keine explizite Unterscheidung getroffen wird, sind daher stets sowohl Frauen, Diverse als auch Männer sowie Menschen jeder Herkunft und Nation gemeint. Lesen Sie mehr dazu.
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Verwendete Quellen anzeigen
Hoffmeister, Christian, Yorck von Borcke: Think New! 22 Erfolgsstrategien im digitalen Business. Hanser, 2015.
Lindner, D. (2019). KMU im digitalen Wandel: Ergebnisse empirischer Studien. Wiesbaden: Springer Gabler.
Lindner, D., & Leyh, C. (2018). Organizations in Transformation: Agility as Consequence or Prerequisite of Digitization? In 21st International Conference on Business Information Systems (p. 15).