What is digital transformation?
We could define digital transformation as the process of optimising systems that support operations and sales (mainly ERP and CRM, but also specific business operations and other integration tools), information processing and exploitation (Business Intelligence, supported by Big Data and advanced analytics), storage systems (cloud), process automation and project management tools (RPA, among others) and, of course, across all of them, artificial intelligence, with the aim of optimising operations and internal processes by eliminating unnecessary or redundant tasks; simplifying purchasing and sales processes; unifying data across company systems; providing end-to-end access to accurate information on business performance, revenue and expenditure; facilitate and improve decision-making; create new business models; increase customer and employee satisfaction; and generate more value for shareholders.
Therefore, transformation goes far beyond digitising, incorporating technology, automating processes or transforming an area or process; it involves comprehensively redefining the business model, processes and organisational culture.
How is digital transformation currently impacting us?
In this interconnected and interdependent global economy, digital transformation has long been widening the gap between those who embrace it and those who lag behind. We will look at this below.
What are the benefits of digital transformation?
We could organise them into a chain of cumulative benefits, which build on each other:
Optimisation, elimination or automation of worthless or repetitive tasks, freeing up time and resources to devote to strategic activities.
- Improved collaboration between teams. Cultural and organisational change that fosters innovation and continuous improvement.
- Decision-making based on data rather than intuition.
- Speed in adapting to customer demands.
- Generation of new business models.
What are the main characteristics of digital transformation?
From the above, I would highlight:
- The most important: it is a ‘must’; either you do it or you die.
- It integrates or eliminates legacy or obsolete systems.
- It generates transparent and traceable processes: what adds value and what does not.
- It focuses on the user (internal and external) and on improving their experience.
- It provides real and unique business data for making the right decisions.
Can you give us an example of digital transformation?
A clear example is the SAP to S/4 Hana migration project we are carrying out in the Finance and Control Department. This change not only updates the technology, but also ensures better integration with other business platforms, optimises our economic, financial and accounting processes, and improves the traceability of income and expenses, facilitating business control.
How do digitisation and digital transformation differ?
Digitisation refers, strictly speaking, to converting analogue data and processes into digital ones (e.g. scanning a document and running it through an OCR converter). It is therefore one of the components of digital transformation. Digital transformation has a much broader scope as it involves a change that encompasses the entire organisation.
Which is more important, digitisation or digital transformation?
Digital transformation, because it involves a strategic review and profound organisational change. Digitisation is only part of that process.
Which technologies are most relevant for digital transformation?
- ERP systems; in the case of Telefónica, SAP S/4 Hana.
- Big data, advanced analytics and artificial intelligence, to take advantage of the greater availability of information and the connection between internal processes, to generate value-added reports or insights hidden in the tangle of data.
- Process automation (RPA), to streamline worthless or repetitive tasks.
- Cloud, to match resources and add security, both in storage and in information processing.
What role does Artificial Intelligence play in digital transformation?
Artificial Intelligence (AI) is one of the catalysts of digital transformation. Everything mentioned above can be improved with AI. In Finance and Control, without wishing to be exhaustive, it can facilitate automatic reconciliation, detect fraud, optimise cash management and generate more accurate financial forecasts.
What would the world be like without digital transformation?
Processes would continue to be cumbersome, highly manual, with high operating costs and a large amount of human resources dedicated to unproductive tasks.
Decision-making would be more intuitive than data-driven.
Customers would receive less personalised services with a very slow time-to-market.
The ability to innovate and adapt to the market would be slow and impractical.
