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\n <\/picture>\n <\/div>\n\n\nDespite digital\u2019s essential place within the future of all organizations, individuals have struggled to feel the same rush to innovate. In part, it\u2019s because professionals aren\u2019t aligned on what, exactly, digital transformation means. Nor is there an understanding of how it impacts their work and careers. Digital transformation ignites agility and resilience not just in organizations, but in people too. Harnessed in the right way, it can help optimize skill sets in the same way as it reimagines businesses.<\/p>\n\n\n\n
What is digital transformation?<\/h2>\n\n\n\n
Digital transformation in business has historically been defined as using technologies to create new \u2013 or optimize existing \u2013 processes, culture, and customer experiences.1<\/sup> Technology is implemented to meet changing business and market needs, and to take a company into the digital future. Its adoption impacts the entire organization and requires revolutionary thinking and action. For many businesses, it\u2019s a daunting initiative, but taking the digital leap has profound benefits for employees and customers.<\/p>\n\n\n\n Perhaps because of its far-reaching influence on companies, industries, and roles, digital transformation has gathered many different interpretations over time. GetSmarter\u2019s research \u2013 which sought insights from leaders, entrepreneurs, consultants, and C-suite executives \u2013 found that there\u2019s not one unified, agreed upon definition of digital transformation<\/strong>. Or rather, that digital transformation means different things to different people.<\/p>\n\n\n\n The findings show that the most popular understandings are: the incorporation of digital technology into every domain of business, and the use of digital technology to help people find solutions to their problems. Our survey respondents also identified 19 other definitions.<\/p>\n\n\n\n If the meaning is unclear and its impact is misunderstood, businesses and professionals will fail to align on effective digital transformation roadmaps<\/a> for the future.<\/p>\n\n\n To add to the lack of a shared understanding, digital transformation also regularly gets confused with digitization and digitalization.<\/p>\n\n\n\n Digitization is when analog information is moved into a digital format. Digitalization uses digitization and technologies to establish digital processes. Digital transformation takes this one step further. It goes beyond singular digital initiatives. It\u2019s a holistic approach that leverages technology to make business better for both employees and customers.2<\/sup><\/p><\/blockquote><\/figure>\n\n\n\n Because digital transformation has two distinct parts to its success \u2013 people and technology \u2013 its understanding has similarly been divided. This pattern emerged in GetSmarter\u2019s data when respondents were asked what digital transformation means to them.<\/p>\n\n\n\n From the professionals surveyed, 35% believe digital transformation is a people-centric change, and 32% think it\u2019s a tech-driven change. For those who believe it\u2019s people-led and technology-supported, digital transformation is:<\/p>\n For the respondents who believe it’s a technology-focused shift, digital transformation is:<\/p>\n While none of these interpretations are wrong \u2013 as digital transformation is about both people and technology<\/strong> \u2013 having so many diverse opinions produces multiple business priorities and plans.<\/p>\n\n\n\n It\u2019s precisely because of the divergence in understanding that businesses fail to roll out their digital transformation frameworks successfully<\/strong>. Different interpretations lead to different goals among executives and managers, which breeds misalignment across functions and teams.<\/p>\n\n\n\n An individual\u2019s understanding of digital transformation also shapes their conclusions on how it affects them, and what actions they need to take to respond to it. If everyone has a different understanding, then people will prepare, prioritize, and implement their strategies in separate ways.<\/p>\n\n\n\n The challenges of digital transformation are not only technology-based \u2013 they\u2019re often with people. Or, as George Westerman from MIT says, \u201cDigital transformation is less of a digital problem than it is a leadership problem.\u201c3<\/sup><\/p>\n\n\n\n The issues often lie within leadership and how leaders envision and drive change. If they are unaware of what digital transformation means and its effect on business, it will be difficult to champion it. Key company decision makers also need to effectively convey the need for change and ensure all employees understand and are prepared.<\/p>\n\n\n\n A shortfall in leadership capabilities, and delivering such comprehensive change at scale, are the biggest hurdles to effective transformation. It\u2019s also difficult to get employees on board with digital transformation if priorities aren\u2019t set and leadership\u2019s vision and strategy is unclear.<\/p>\n\n\n\n Implementing digital into your day-to-day work requires a shift in skill set and in attitude. It can be difficult to remove such barriers to change, as it asks employees to reimagine the work and methods they\u2019ve long known. Thus, it\u2019s critical that leaders not only know how to deliver business success with digital transformation \u2013 they must also be able to support employees in understanding and implementing shifts in their daily tasks. This challenge highlights why change management<\/a> and leadership is so key to the success of your digital transformation journey.<\/strong><\/p>\n\n\n\n Digital transformation doesn\u2019t have to have one set understanding \u2013 as the world around us changes, so will digital transformation. But from our GetSmarter research, it seems that the emerging interpretation is this:<\/p>\n\n\n\n Digital transformation focuses on the leveraging of technologies like cloud computing, AI, enterprise software, while harnessing human capital with change management, to achieve real business growth.<\/p><\/blockquote><\/figure>\n\n\n\n A digital transformation strategy, however, is going to be different for every business. You’ll need to identify what particular strategy will work for your company and stakeholders, and create a unique vision of how to achieve it.<\/p>\n\n\n\n Digital technologies such as AI, cloud services, advanced analytics, and the Internet of Things can redefine the way you, and your customers, engage with business. Technology paired with an effective business transformation strategy and skilled employees can help:<\/p>\n Digital transformation can also bring a significant financial benefit. A 2021 McKinsey survey revealed that more than 75% of transformation initiatives yield cost reductions and improve the employee experience<\/strong>. Additionally, two-thirds of the survey respondents said that the efforts increased revenue from both existing and new revenue streams.5<\/sup> But perhaps most importantly, the survey found that when companies changed their people and talent strategies<\/a> and focused on upskilling employees, the greatest business transformation occurred. <\/strong><\/p>\n\n\n\n Becoming digitally fluent has never been more critical. By adopting a digital transformation approach to not only business, but to your role and career too, you\u2019ll achieve longevity across all three aspects. It\u2019s now time for individuals to take note of the change happening around them, and transform in the same way as businesses.<\/p>\n\n\n\n Since its emergence, digital transformation has been viewed through the lens of businesses, industries, and economies. Because of this, there has been very little focus on how it impacts individuals<\/em>. Businesses are now navigating the fact that digital transformation impacts each individual differently. Organizations are also realizing that they\u2019ll need to respond to each employee\u2019s level of resistance to change.<\/p>\n\n\n\n GetSmarter\u2019s research found that when we asked what digital transformation means within specific business functions, each department\u2019s answer was different. Executive leadership is more focused on delivering digital transformation that adds value to its customers and using digital technology to solve problems and create solutions. The information technology function understands digital transformation to be technology that gets used in every domain of business. And project management is more tech-centric and believes digital transformation to be a change in how organizations use technology.<\/p>\n\n\n Each working individual also has a different understanding. CEOs, for instance, are focused on: <\/p>\n These interpretations again differ when we ask other levels within an organization.<\/p>\n\n\n Different interpretations are only natural, as the way digital transformation impacts retail is entirely different to how it\u2019s applied in manufacturing, finance, or marketing. The same goes for specific business functions and roles.<\/p>\n\n\n\n Whatever your particular understanding of digital transformation is, one thing should be recognized: people are critical to its implementation. In order for it to spread into every business domain and to improve the experience for customers and staff, organizations will first need to decide on what digital transformation means to them<\/strong>. Leaders will then need to ensure that this interpretation meets the business\u2019s digital goals, is pervasive across business functions, and is upheld in each role. What sets real transformation apart is the ability to create employee buy-in and willingness to change. <\/strong><\/p>\n\n\n\n There is another consequence of digital transformation for individuals: tasks and roles are becoming more digital. Yet, GetSmarter found that 49% of individuals aren\u2019t concerned that their role may be automated or disrupted<\/strong>. This lack of concern may indicate a lack of awareness, when in fact, up to 11 million jobs may be claimed by automation in the next 10 years.6<\/sup><\/p>\n\n\n\n GetSmarter\u2019s data revealed that Generation Z is the most concerned about the ramifications of automation, and Baby Boomers are the least worried.<\/p><\/blockquote><\/figure>\n\n\n\n Additionally, junior and middle management fear job displacement, while senior- and executive-level professionals are less concerned.<\/p>\n\n\n\n Generation Z has been raised with technology, so this insight is surprising. This may result from the power dynamic between ages, but also from the types of roles these generations occupy and the types of skills required.<\/p>\n\n\n\n Older generations tend to be in more senior leadership roles and thus feel more job security. They aren\u2019t as concerned about digital change because they commonly rely on their human-centric skills, such as leadership<\/a> and analytical thinking. They\u2019re also more aware that interpersonal skills are harder to replace<\/a>. On the other hand Gen Zs, typically the least senior in an organization, largely rely on technical skills and digital capabilities \u2013 which are constantly changing and need continuous updating. They recognize that their role \u2013 or at least a part of their role \u2013 is the most at risk of being automated. Younger generations are also digital natives, and may understand the potential of technologies better than their older counterparts. Boomers are also closer to retirement, and so the impact of automation may not affect them. Essentially, it seems the more senior you are the less concerned you are about losing your role.<\/p>\n\n\n\n Despite these differences, professionals of all ages will need to prepare for digital transformation. Your learning path will depend on whether you\u2019re leading the strategy, or rather providing the necessary technical skills to achieve change. <\/strong><\/p>\n\n\n\n COVID-19 drastically accelerated digital transformation.7<\/sup> The majority of GetSmarter\u2019s survey respondents \u2013 66% \u2013 say a significant amount of disruption has occurred in their industry since the pandemic began<\/strong>. Yet despite 85% of CEOs increasing their number of digital initiatives, most can\u2019t articulate their strategy or detail their progress beyond the fact that they made a tech investment.8<\/sup><\/p>\n\n\n\n The lack of preparation \u2013 and confidence \u2013 points to the growing skills gap within leadership and change management in the digital age. What\u2019s more, there seems to be a delay between oncoming disruption and actual change. Professionals are yet to feel the direct effect of technology transformation, but that\u2019s not to say radical change isn\u2019t occurring.<\/p>\n\n\n\n In GetSmarter\u2019s 2020 The Future of Work Is Here<\/a> report, technology was ranked as the biggest driver of change within business<\/strong>. When we examined where disruption is being felt within an organization in the last six to 12 months, our survey respondents ranked business processes as the most disrupted and an individual\u2019s role as the least affected.<\/p>\n\n\n\n These insights align with our previous research<\/a>, which found that job responsibilities won\u2019t fall away entirely because of new technologies like AI<\/a> and automation. Instead, only aspects of a role will change or become obsolete.<\/p>\n\n\n\n So while businesses are adapting, the majority of actual jobs are not \u2013 yet. Coupled with the fact that automation won\u2019t necessarily take away your job but rather alter it, it\u2019s no wonder that professionals haven\u2019t felt the same disruption as organizations have. But the change for individuals \u2013 at a granular task level \u2013 is still to come.<\/p>\n\n\n When we asked our respondents what parts of their business or industry have been most affected by digital transformation, they said:<\/p>\n These pressure points are linked to the fact that businesses are struggling to create a unified, shared vision of what digital transformation should achieve and how it should be implemented. The graph also reiterates how essential leadership and strategy are to successful, sustainable digital transformation efforts<\/strong> \u2013 and reveals how interconnected each challenge is.<\/p>\n\n\n\n The struggle of integrating digital transformation into systems and processes speaks directly to how the focus of digital transformation has shifted \u2013 from understanding the technology to being able to manage and implement it within an organizational context. Legacy systems may be a key concern here as organizations struggle to integrate technology into established roles and functions while simultaneously adapting the culture of the organization. Another challenge is that older generations believe digital won\u2019t impact their executive roles.<\/p>\n\n\n\n Digital transformation, however, requires absolute advocacy from the top down. Applying new systems and processes requires strong leadership and clear implementation strategies, as well as change management that creates employee (and management) buy-in.<\/p>\n\n\n\n With so much uncertainty, and without a clear understanding of a business\u2019s digital future, the role of a digital leader is murky. The best digital transformation leaders have a clear plan for the future<\/a>, with a resilient change management strategy in place to build and nurture a digital, agile workplace culture. <\/strong><\/p>\n\n\n\nThere is no shared understanding<\/h3>\n\n\n\n
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\n <\/picture>\n <\/div>\n\n\nDigitization and digitalization versus digital transformation<\/h3>\n\n\n\n
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\n <\/picture>\n <\/div>\n\n\nWhy digital transformation strategies fail<\/h3>\n\n\n\n
\n\n\n\nBrowse a selection of digital transformation courses for leaders from the world\u2019s top universities and institutions.<\/h4>\n\n\n\n
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\n\n\n\nSet yourself up for digital success
Explore GetSmarter\u2019s portfolio of online digital transformation courses designed to help non-technical future thinkers develop effective transformation strategies, lead change, and achieve innovation in business.<\/h4>\n\n\n\n
\n\n\n\nThe impact of digital transformation<\/h2>\n\n\n\n
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\n\n\n\nTransform your business into an innovative, efficient, and sustainable company of the future. No technical expertise needed.<\/h4>\n\n\n\n
\n\n\n\nDigital transformation affects organizations and individuals differently<\/h3>\n\n\n\n
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\n\n\n\nDrive performance and increase your understanding of data and technology with this online certificate course from the London School of Economics and Political Science.<\/h4>\n\n\n\n
\n\n\n\nHow generations react to automation and role displacement<\/h2>\n\n\n\n
Where is change being felt?<\/h2>\n\n\n\n
\n\n\n\nIt\u2019s time to adopt AI in business. Experience the solutions and advantages it brings, with an online course suited to your expertise.<\/h4>\n\n\n\n
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\n\n\n\nPrepare your business structures for a successful digital transition in this MIT Sloan online short course.<\/h4>\n\n\n\n