What Has Digital Transformation Become?

Over the past 10-15 years, digital transformation has been a focal point for organisations that want to remain competitive. Yet, in today’s environment, becoming digitally literate is no longer a choice but a necessity. Businesses that lack a digital core face significant survival risks, with a recent study by MIT Sloan showing that companies with higher digital maturity are 26% more profitable than their less mature counterparts.

The printing press revolutionised the sharing of information. This was dwarfed by the invention of the internet.

Initially, digital transformation efforts revolved around enhancing customer experiences, leveraging data, building unique capabilities in apps and automating processes. However, technology has evolved at a pace we have never seen before, so there is no precedent of how to stay relevant within the rate of innovation that we are seeing. For example, the way we consume news shows the exponential growth of technology. We went from cave drawings thousands of years ago to town criers delivering updates in person hundreds of years ago. Then the printing press made news widely available, but the leap to the internet and social media in the last 20 years transformed it even faster. Now, information spreads globally in an instant.

Digital technology continues to evolve, so too must the transformation journey. Innovations such as Artificial Intelligence (AI), Lo-Code/No-Code platforms, and hyper-automation are reshaping the landscape, allowing companies to move beyond incremental improvements to complete business reinvention.

Business Model Innovation (BMI) is at the heart of this new wave of digital transformation. No longer can companies simply digitise their existing processes, they need to rethink their core operating models. A Harvard Business Review article points out that organisations like Amazon and Alibaba have fundamentally transformed their industries by building digital ecosystems that not only optimise current operations but also create new revenue streams. This whole-of-strategy approach to transformation is essential to remain competitive for the long term.

The road to true digital maturity isn’t just about technology; it’s a cultural shift that requires time and effort. Transitioning from a traditional business to a digital-first mindset involves overcoming resistance and breeding a culture that embraces change. According to the Boston Consulting Group, only 30% of companies report successfully embedding digital culture within their operations. Without the embedded culture, the business will “snap back” to its old habits, like a rubber band snapping back to its pre-tensioned position. Ongoing Change Management, executive sponsorship and support is critical to the success of a Digital Transformation. Organisations that prioritise this cultural change, such as Microsoft, which transformed its internal culture to focus on Cloud and AI, have seen monumental success.

One of the most profound examples of Business Model Innovation is the rise of Generative AI (GenAI). GenAI has not only revolutionised content creation but also has begun to reshape industries such as healthcare, finance, and manufacturing. A PwC study estimates that AI will contribute up to $15.7 trillion to the global economy by 2030, making it a critical component for businesses aiming to innovate and maintain a competitive edge. Companies like OpenAI and Google DeepMind are leading the charge, demonstrating how integrating AI at the core of operations can unlock unprecedented opportunities.

It’s also important to understand that digital transformation is not a one-time project. It’s a continuous process of reinvention. In an era where technology is advancing at an unprecedented rate, companies must constantly disrupt themselves to remain relevant. According to a recent Accenture study, 75% of executives believe that their business models will be unrecognisable in the next five years due to digital disruption.

While digital transformation has been ongoing for over a decade, the journey is far from complete. As businesses move toward digital ecosystems and integrate emerging technologies like AI, they must continually adapt to survive and thrive.