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What is digital transformation?

Digital transformation technologies have fundamentally altered the way that human beings work in the modern day. But what are they and why are they beneficial?

Digital transformation header

If you were asked to define the age we live in now with a single word, then the word ‘digital’ might seem a pretty compelling choice. In the digital age, just about everything that’s worth doing is done with the help of a computer. 

Binary digits, representing data in the form of super-fast on-off signals, have just about supplanted every other form of communication. This has significant implications for businesses, which need to adapt to new and rapidly-evolving methods of working.

What is digital transformation?

Digital transformation is the practice of moving an organisation towards digital practices and away from traditional, physical ones. 

If the organisation has a long-established workflow, then the process of digital transformation might be disruptive in the short term. Some staff, who have mastered the old methods, could be resistant to starting from scratch and learning new ones. You might have to run two systems concurrently as you segue from one to the other. At times, it’s necessary to dial back operations temporarily in order to manage the transition.

Effective digital transformation means accounting for these drawbacks and dealing with them, trying to put a plan in place to mitigate them and establishing what parts of digital transformation are worthwhile for your operations.

What are the benefits of digitally transforming a business?

It’s worth considering a few key benefits enjoyed by a digital business. In many cases, these benefits apply to businesses of every shape and size. Sometimes, they’re a little more specific.

Increased productivity

We’ll start with the most obvious upside. A computer, whether it’s a traditional desktop machine, laptop, server, or mobile phone, will allow you to complete tasks that once took a long time, in a very short time. With the help of these tools, you’ll be able to get the job done faster and to a higher standard.

New ways of working

As well as improving our ability to get the job done, digitisation has also helped to reshape what a job actually involves. One of the best examples of this is the onset of ride-hailing apps. Rather than having to phone a central hub and ask for a taxi, these apps take advantage of a combination of digital technologies to determine where the nearest car is and hail it for you. This automates taxi services and streamlines route planning for the driver.

Other innovations, like digital currency, digital media streaming and ‘just-in-time’ supply chain logistics, would not have been possible just a decade or so ago.

Working from home

One of the most conspicuous changes to our modern working landscape has been the practice of working from home. Prior to the COVID-19 pandemic, this was only possible very rarely and in specific industries. Now it’s ubiquitous and looks likely to outlast the pandemic. This is a transformation made possible by internet accessibility and the increased availability of products aimed at digital transformation.

Resilience

If a business keeps all of its files in physical form in cabinets, then there’s a risk they can be damaged, destroyed or misplaced. If those same files are stored digitally in the cloud, then the likelihood of these risks is greatly reduced. Modern data storage has made file safe-keeping more robust and secure – even if it does throw up security challenges of its own.

Why is digital transformation happening?

So why didn’t we think of all of these benefits sooner? The answer lies in hardware, and in Moore’s Law – which states that computing power, as measured by transistor density, roughly doubles every two years.

Today, you can find a two-terabyte thumb drive available for around thirty pounds. Back in 1980, hard-drive manufacturer, Seagate, released a five-megabyte drive for the equivalent of more than £3000 of today’s currency. Over the course of four decades, we’ve had an almost billion-fold price-performance improvement on digital products.

Small wonder, then, that things are changing so quickly. If the Ferrari sports cars were able to travel a billion times faster than the ones of the seventies, it would have serious implications for the travel industry. There’s every reason to suspect that this pace of progression will keep going long into the future, making possible innovations we haven’t yet considered.

What does digital transformation mean for a business or organisation?

Let’s consider what digital transformation involves. Much will depend on the nature of the business or organisation being transformed. Having said that, there are still some broad principles that can be applied.

Digital transformation strategies

In the Media Design Schools course, Introduction to Digital Transformation, several distinct digital transformation steps are identified. You can read about them in further detail in the 4 steps to digital transformation open step. 

The course recommends an approach to intelligence that combines human and artificial intelligence. This allows for the leveraging of data-driven insights, but still gives a human control of exactly how those insights are leveraged.

We might also take a holistic approach to data science. This means bringing disparate skillsets like design, problem-solving and business decision-making under the same umbrella. If you’re running a business, various departments might begin to get much more specialised as they digitise. This can lead to communication problems. Fostering a common language and culture, so that everyone understands each other’s roles and abilities, is essential if the entire organisation is going to pull in the same direction.

The solutions that we arrive at with our digital tools should be transparent. We should ideally be able to explain how we arrived at a particular judgement, perhaps with the help of visual aids. A purely data-driven organisation can sometimes confuse correlations with causations – especially where there’s limited human analysis.

Finally, we should look to adopt an experimental mindset where we constantly vary a given formula in search of specific, measurable outcomes. Projects that seek to bring about a ‘big bang’ style explosion in productivity succeed only rarely. Being willing to experiment with a dataset can often lead you to conclusions that you might not otherwise have considered.

7 digital transformation technologies

There are several technologies that stand out as having had a significant impact on the world of business. Let’s run through a few of the standouts.

1. Smartphones

Without the smartphone, many of the digital practices we now accept as fundamental simply wouldn’t be possible. They allow us to track orders, collaborate with colleagues, socialise with friends and family and catch up on entertainment, seamlessly. In UCL’s Anthropology of Smartphones course, the history and future trajectory of this device are explored in depth.

2. Artificial intelligence

AI is a subject that we’ve dealt with extensively at FutureLearn – it’s set to become a vital pillar of the way that business operates in the future. From driverless cars to predictive text to chatbots, the applications for AI are sure to be plentiful and we’ve only just scratched the surface of what’s possible.

If you’re interested in AI and its possibilities, then you’ll find plenty of courses designed to acquaint you with the topic. Start with Artificial Intelligence: Distinguishing Between Fact and Fiction by Coventry University, to separate the AI hype from reality. Then go for Microsoft Cloudswyft’s Introduction to Artificial Intelligence and Machine Learning.

3. IoT

The Internet of Things (IoT) is a name given to a globe-spanning network of interconnected devices. When your light bulbs are connected to your smart speaker via an embedded wifi chip, it’s possible to turn them on and off with a voice command. There are many applications of IoT, and businesses can apply this approach to sophisticated tracking and diagnostic purposes. We’ll take a look at this further down.

If you’d like to learn more about the Internet of Things, there are several Futurelearn courses worth looking into. These include our voice assistant course, from Labdox, and our internet of things course for ‘active ageing’, from Taipei Medical University.

4. Cloud computing

The affordability of digital storage space and bandwidth has made it possible for data to be stored remotely on a cloud server, rather than on the business’ premises. This lowers overheads for a business and confers resilience.

In reality, there are several different clouds, all of which require a slightly different approach. Take a look at our course on Azure Cloud Fundamentals from Cloudswyft or our introduction to AWS Cloud Technical Fundamentals.

5. Online collaboration

New methods of project management, like Agile, allow teams of remote workers to come together seamlessly. You can introduce yourself to this way of doing things with the help of our Introduction to Agile Project Management course.

6. Visual effects

Deepfakes are perhaps the best example of how the visual effects (VFX) industry is undergoing massive change. It’s arguably the place where digital transformation is at its most impressive. Just think of a young Mark Hamill being resurrected in the Mandalorian. Now, CGI faces from just a few years ago are being bettered by deepfakes that cost a relative pittance.

7. Gaming

Of course, interactive media has also benefited from digital transformation. The gaming industry was valued at $173 billion dollars in 2020 and it’s expected to eclipse $300 billion by 2026. This upsurge is being helped, in part, by online gamer culture and platforms like Twitch.

This is examined thoroughly in the University of York’s Lights, Camera, Computer – Action! How Digital Technology is Transforming Film, TV, and Gaming course.

What does digital transformation mean for other organisations?

It isn’t just for-profit businesses that benefit from digital transformation. In the healthcare sector, AI is leading improvements in nursing, radiology and, of course, administration. This is explored in great depth in Manchester University’s course on AI for Healthcare.

In radiology, the introduction of artificial intelligence is especially promising. Analysing images and identifying potential indicators of serious disease is something that even current-level AIs can do – even if they’re not quite ready to be implemented widely. This might mean earlier intervention on serious diseases like cancers and many more lives saved.

Digital transformation examples

There are endless example cases of digital transformation. For example, well-known streaming services like Youtube and Spotify are possible as a result of overcoming bandwidth limitations. Uber is only possible thanks to reliable internet on everyone’s phone.

But it isn’t just Silicon Valley behemoths that benefit from digital transformation. When you start to look for it, you will find it in a whole range of surprising places. For more information, check out this article exploring four interesting examples of digital transformation.

Heavy machinery

Modern heavy machinery is fitted with diagnostic devices that report faults back to the manufacturer. These devices are widespread in all kinds of automotive manufacturing. Combined with machine learning, they can be used to spot correlations between an apparently unrelated symptom and a mechanical failure. This allows these failures to be anticipated and prevented through the right maintenance.

Black-box technology

This technology communicates with insurers and fleet managers to tell them exactly how a car was being driven before it crashed. This can also help drivers to alter their behaviour on the road through the gamification of feedback, incentivising safe driving through discounts and other rewards.

Digital currencies

We can see digital transformation at work in the world of finance, as we’ve explored in our guide to digital currencies. The government’s Making Tax Digital scheme aims to transform income tax in 2024 and corporation tax in 2026. It’s being implemented explicitly in light of the benefits we’ve already mentioned: it’ll make everything more effective, efficient and straightforward for the end-user (in this case, the taxpayer).

If you’d like to look at some digital transformation case studies in greater detail, then check out this open step from the University of Strathclyde.

Digital transformation training 

So, you’re looking to make your organisation fit for purpose in the 21st century. If you don’t have a specific goal in mind, and a plan to achieve it, then you risk taking a piecemeal approach. You’ll bring in a new piece of software here, or a new device there, but you won’t have a coherent digital transformation strategy for moving to this new way of working.

This approach could lead you to implement a solution that isn’t appropriate for your business, which can be costly to undo.

It’s worth taking the time to learn about the processes you’re going to be implementing. Fortunately, you’ve got access to the internet, and its enormous quantities of information on the subject.

Of course, it can be difficult to sort the good information from the bad information. And even good information isn’t always presented in the right way. It’s easy to recommend expert courses, like the ones we provide at FutureLearn; all provided by expert tutors from reputable institutions.

Whether you want a broad introduction to digital transformation, or you have a specific gap in your knowledge that you’re looking to fill, our courses can help you out. You can learn digitally about digital learning, with the help of Deakin University’s course, Transforming Digital Learning, or with our Digital Transformation in the Classroom course from the Norwegian University of Science and Technology.

Finally, there’s our Innovation in Edtech course, set up with the help of DigiEduHack – which is a company offering a series of online hackathons dedicated to getting the best from digital education.

Final thoughts

Digital technologies aren’t going anywhere. They’re completely embedded in our society — the benefits they yield are too great to overlook. As computer chips get smaller and more powerful, the pace of change might well accelerate.

It’s therefore essential that businesses and other organisations think about how they’re going to adapt to these changes. This isn’t just a one-off step, but an ongoing process. As new technologies and digital business innovations are produced, it’s down to the business world to determine how to get the best out of them. In most cases, the answers lie in seeking help from reputable educators – many of whom are now to be found online!

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