Digital Transformations are complex, risky and costly initiatives. So, why there is a need to invest in Digital Transformation? Why often do companies have no choice but to invest in Digital Transformation projects?
Here are a few reasons:
Shift in the Business Model
Due to a range of different reasons, a company may decide to change its Business model. To support the new Business model, companies may need to invest in Digital Transformation.
For example, a company may decide to offer new services. Similarly, a wholesale company may choose to enter into the retail business. As a result, there is often a need for new Digital capabilities and associated transformation to support the new initiatives and Business Models.
Catch-up with technology
Companies sometimes have no choice but to invest in Digital Transformation because of their aging operating systems, software and infrastructure. It is a reactive response to upgrading the technology landscape.
Threat from the competition
This is another reactive response to dealing with competition. There is a risk that the enterprise can lose business against its competition. So, companies invest in Digital Transformation to improve customer service and efficiency.
Opportunity in the market
Sometimes, technology has a lot to offer for a given industry vertical. For example, there can be a huge opportunity to use commercial off the shelf software in retail fashion (e.g. augmented reality). As a result, companies invest in the transformation to leverage the advantage of existing technology.
There can be other reasons too!
What is your reason for the Digital Transformation initiative? More importantly, are you being reactive or proactive?