Text by Dr. Daniel Fasnacht, Program Director
Business and society are undergoing a considerable transformation primarily induced by technology that significantly impacts how we live and act. Since technology has become a strategic imperative, we need an in-depth understanding of what trends drive digital transformation and how to master it.
The technology and industry convergence links e-commerce, social media, healthcare, payments, investments, travel, and leisure and raises experience-oriented business models. We need to understand how to compete when industries digitalise and collide. One option is to embrace digital tools and collaborate with diverse value-creating actors in an ecosystem across organisational and sector boundaries. Systematically understanding trends and developing digital transformation mastery are decisive factors for surviving and growing in a dynamic and digital world.
Various factors are relevant to change and transformation. Let’s start with changing customer expectations. Customers now expect fast, seamless, and personalised experiences across all channels, and digital technologies are vital to delivering those experiences. We have also noticed more and more disruptive competitors. New digital-native startups disrupt traditional industries, forcing established companies to adapt and transform to remain competitive. Digital technologies enable organisations to automate manual processes and reduce costs. Therefore, increased efficiencyis a decisive factor for profitable growth. The COVID-19 pandemic has accelerated the need for digital transformation as organisations have had to adopt new technologies to enable remote work and virtual collaboration. New work is an interpretation of flexible models and work structures that have changed under the influence of digitalisation. I also found regulatory requirements as a driver for change since many industries are subject to new regulations and compliance requirements that digital technologies can only meet. Lastly, the data explosion and advancesin digitaltechnologies to make sense of that data are key drivers of digital transformation.
Digital transformation refers to integrating digital technology into all aspects of an organisation’s operations, processes, and activities to fundamentally change how it delivers value to customers, employees, and other stakeholders. This involves leveraging what I call disruptive technologies, whereby the technology per se is not disruptive but rather its impact. Artificial intelligence, big data analytics, the Internet of Things (IoT), blockchain, cloud and quantum computing to automate manual processes, streamline operations, improve efficiency, enhance customer experience, and create new business models.
Digital transformation is about adopting new technologies and changing organisational culture, mindset, and processes to drive innovation, agility, and responsiveness. The goal of digital transformation is to create a more connected, data-driven, and customer-centric organisation that can thrive in the fast-paced, constantly evolving digital economy.
Digital transformation has recently become a priority for many organisations due to technology’s exponential development and data’s importance. To explain, I draw on the framework of the information value chain that describes the various stages of information processing and the value added at each stage. It is a way of understanding how data is transformed into valuable insights that inform decision-making. The information value chain typically consists of the following steps that all underly exponential growth:
Artificial intelligence can help organisations process large amounts of data and make sense of data more quickly and accurately, leading to faster and more informed decision-making. Through the so-called informationdissemination, insights can be gained from the analysis that is then communicated to relevant stakeholders through reports, dashboards, or visualisations. These insights are used for developing new products, optimising processes and improving customer services.
Overall, digital transformation is necessary for organisations to remain competitive, meet customer expectations, and stay ahead of rapidly evolving technology and market trends. Managing trends involves understanding the underlying factors that drive change and taking proactive steps to adapt. Here I would like to refer to the discipline of strategic foresight, which involves exploring and anticipating potential future scenarios to inform strategic decision-making. Strategic foresight uses various tools and techniques to identify and analyse emerging trends and drivers of change and develop plausible future scenarios that can inform long-term planning. I suggest taking a future-back perspective instead of a present-forward perspective. Because with future-scenario thinking, we can better extrapolate the needs, impacts and strategies for the future.
Digital transformation is not solely about technology – it is more about a mindset guided by business strategy. Leaders who understand trends holistically can successfully steer their organisations towards digital transformation and inspirational motivate teams that develop data-driven digital solutions that meet experience-oriented customer journeys.
The Executive Education of the University of Zurich covers all aspects of digital transformation in degree programs, compact courses or custom programs. For instance, the CAS in Fintech, includes:
Finance & Custom Programs
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