Why is Automation an integral part of Digital Transformation strategy?

Is Automation different from Digital Transformation?

In today’s connected world, Digital is everywhere, at industry level as well as at the social level. Digital Transformation is the buzzword that is driving industries from all sectors to focus on this digital disruption for modernizing the systems for faster and real-time responses. This transformation is also influencing the decision-making capability of organizations that is supported by data, which shall be easily available at a centralized location, aggregated, and analyzed.

Technologies like cloud computing, advanced analytics, artificial intelligence, machine learning and IoT are being adapted which are increasing the complexity of enterprise systems, generating enormous data. These ecosystems may not be efficient as most applications within the ecosystem are disintegrated and unable to exchange data autonomously. Consequently, automation of business processes has also been considered as one of the priority actions that will gather and share these scattered data to improve efficiency, agility, and act faster.

Digital Transformation as well as Automation, both are used in a similar context and considered at the core of organizational transformation strategies having different meanings. These two terms need to be understood clearly and planned accordingly to accomplish the end goals.

Purpose of Digital Transformation

Digital transformation can be explained in two spaces depending on where the new strategy is going to fit in, either in Digitization (the process of converting information into digital) or Digitalization (the use of digital technologies to change business processes and provide value-producing opportunities). Both the terms are closely associated with each other, as Prof Stanisław ŁOBEJKO described in Digital Transformation and Innovativeness of Enterprises:

Digital transformation of each organization is such a transformation of its resources, structures and principles of functioning that enables it to take full advantage of the opportunities offered by modern digital technologies in order to become more and more effective

It may involve the implementation of technology for improving business processes to enhance customer experience that may include enhancing operational efficiency, changing the organizational practices, and its business model. Digital transformation is a continuous journey of defining and implementing innovation processes that are driven by people supported by Digital ecosystems. The challenge will be in establishing this ecosystem that is collaborative, connected, and inclusive that can be systematically scaled.

Automation in Digital Ecosystem

Automation is all about using technologies to make applications connected, processes more autonomous, reduced human involvement and increased transparency. One of such initiatives is Enterprise workflow automation that is streamlined and well-coordinated to improve end-to-end workflow efficiency. Cross-departmental processes using specific applications that may be working in silos are restricting in achieving the required level of end-to-end efficiency, productivity, and quality of data.

It will be important to connect these legacy applications of the ecosystem that will work in a unified manner and enable uninterrupted data flow supporting the transformation strategy. This enterprise integration can be realized with one of the following approaches:

1. Replacing or upgrading the old applications with more powerful and latest software equipped with new technologies and more integration capabilities. Execution of this approach may take a longer duration, involve higher cost, and require training the teams with new processes and methods.
2. Another approach is introducing additional software with existing one to connect and automate the data flow making it a more integrated digital ecosystem. Enterprise integration solutions like Cloud-based, Middleware, APIs, etc. play an important role in attaining the objectives of the transformation strategy. Implementation of this approach may be relatively quick and less costly as there will be limited changes in the core processes and methods.

Automation can be summarized as:

A means to an end, and the desired end is Digital Transformation

Approach towards Transformation

As emphasized in the Gartner article, Digital Transformation is more than improving existing processes whose goal is to create and deliver new values for customers. It is a medium to take automation to a different level by leveraging the existing or implementing the new, automation-based technologies and transforming it into an optimized and efficient integrated workflow that acts as an interface between the company and its customers. Implementation of transformation strategy can be started with a smaller scope and then gradually scaled up with intermediate goals and continued until a larger landscape is covered for the entire organization. Embracing Digital Transformation is inevitable and to reap benefits from the outcome of this transformation there will be a need to define the strategy more comprehensively and in detail.

Automation driven by technology placed at the heart of digital transformation strategy will bring benefits to unlock the growth of businesses.

About this article

This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.