Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. Since digital transformation has a different meaning in various businesses and even companies in the same business having a unified definition is something difficult to make. However, we can define digital transformation of a company as the integration of digital technologies into all different areas of business which can result in fundamental changes to how the companies operate and how they deliver value to their customers. Also, it requires the acceptance by the company’s employees that frequent change in the operations and responsibilities of employees are mandatory. As soon as a company has been digitally transformed or has set the bases to adopt new technologies frequently, depending on the market requirements, it inevitably has to be prepared for failure as the transitional period brings many challenges for all organizations that attempt it but also benefits to the ones that succeed.

For companies in the IT solutions sector, such a move is imperative as they need to frequently be in front of the market as they are the ones to introduce new technological advances to the rest of the industries. Such a move requires from the organization to continually challenge its own status in the market and to accept radical changes. Something, which will help them but also bring challenges and risks, towards their market are their competitors who might 15 affect their market position. According to many experts on the field and the available statistical information, digital transformation is imperative for companies of all sizes, from the small-time business with ten people to the multinational corporations with thousands of employees.

Digital Transformation Strategy

Common organizational approaches towards digital transformation strategies are no longer efficient as digital technologies are constantly evolving and have started to include, among other things, The Internet of Things, robotics and artificial intelligence, which has lead companies around the world to find faster ways to react to and deal with a certain digital disruption that occurs in the market. In other words, companies find ways to fulfill their customers’ need by introducing new services to their portfolio or even shifting the whole company towards another direction in the market. This subsequently means that the vision of the company, the desired future state or simply where the company wants to go, is also changing. It is important therefore, to understand that the vision of a company is related to the Strategy and Organizational change. As soon as the company requires to have an organizational change, in this case Digital Transformation, then the vision of the company changes too, as the existing state of the company serves a direction towards another goal.

Organizational benefits of digital transformation

There are several ways that an IT solutions company can benefit from DT, but according to Hirt and Willmott, a proper digital transformation in a company can bring huge opportunities, sometimes together with challenges, but nonetheless opportunities that can prove very beneficial. Furthermore, being digitally transformed can determine if a company will gain or lose value in their market. Even though not all companies need to be digitally transformed now, most of the companies worldwide that don’t want to lose significant opportunities in the present and the future, need to become digitally transformed. Some of the opportunities include improved customer experience and engagement, improved decision-making, improved innovation in the R&D department, better automated business processes and most importantly better communication and collaboration between the employees of the company, suppliers and other business factors.

According to Westerman the main reason for a company to pursue any investment is how profitable it can be. It is evident that pursuing a change of a big magnitude in a company, like digital transformation, can be very costly. For example, companies like Lloyds that are huge multinational corporations are about to invest more than three billion UK pounds in their third phase of digital transformation that is expected to achieve a digitization level of approximately 89% in total. According to the Center for digital business in the MIT businesses that are digitally transformed are up to 26% more profitable than their industry competitors and their business valuation is up to 12% higher. For some companies the best value they can gain from digital transformation is how agile and prone to change they can become.

The impact of failing to digitally transform

In 2011 the new wave of modern digital transformation began, where companies like General Electric, a huge international IT electronics and software solutions company, attempted to digitally transform their products and services. They invested heavily in installing electric sensors to all their hardware products, built a new centralized system to connect all services internationally and decided to change their business models according to their new digital transformation strategy. With the new changes, performance indicators in GE started to show improvement, and the transformation was about to be recognized as successful. The problems started a few years later, by the end of 2013 to 2014, However, by the end of 2013 and beginning of 2014, the company realized that their investment in digital technologies was not making any progress, and revenues were still similar to before the change.

Even though they invested in improving the performance of the company, it was quite visible that performance issues within company became more severe than before. Inner pushback from upper level management was enough to cause trouble as the investments according to the shareholders and high-level executives did not pay back fast enough to cover the financial gap that was created in the company. This resulted to the CEO of the Company, Jeff Immelt to be removed from his position and the company’s IT Division to lose their market advantage over their competitors who were making similar changes but not as significant; GE was market leader before even attempting to digitally transform.