Monthly Archives: December 2023

For instance, automotive companies have integrated internet of things (IoT) sensors and data analytics into vehicles to offer smart and connected features, thus transforming traditional cars into intelligent, connected products. Even the healthcare industry, traditionally known for its conventional practices, has adopted digital transformation to launch new products and services such as telemedicine platforms, enabling remote patient consultations and digital health monitoring.

Other companies may stick to current products and services, but completely reshape the customer experience.

In the banking and finance sector, institutions are redefining customer experience through mobile banking apps and online platforms. Customers can now manage accounts, transfer funds, and access financial services wherever they are.

The same with Government and public services that are reshaping the way they interact with its citizens, by dematerialization and simplification of processes.

In this context, regardless of their industry, it is essential for all companies to establish a compelling digital presence through an inclusive corporate website that addresses accessibility, leaving no one excluded.

Transform how value is created

Digital transformation is often associated with efficiency improvements and cost reduction. Automation, artificial intelligence, and other digital tools are being used to streamline operations and reduce unnecessary costs. As companies become leaner and more agile, they can redirect resources toward more value-added activities.

For instance, robotic process automation (RPA) is being employed to automate repetitive and time-consuming tasks. This reduces the need for human intervention, thereby reducing operational costs. The savings can then be reinvested in research and development, product improvement, or further cost reductions, resulting in a positive feedback loop that enhances the company’s value proposition.

Digital transformation not only empowers the reshaping of processes but also enables this transformation to occur at an accelerated pace. Using digital tools, companies can swiftly create minimal viable products, gather consumer feedback more rapidly, and iterate product features. This approach involves working within an agile development process that minimizes risk and enhances the likelihood of success.

Deliver change

Finally, despite all the disruptive potential of digital tools compared to others in history, tools remain tools, to be ultimately used by humans. This implies that all digital transformation will primarily involve people. As much as there is currently an advocacy for change and a desire for agile organizations, the truth is that this change is not inherent to human beings (not even in physics, for that matter).

The natural tendency is to maintain the status quo. Breaking away from this inertia creates significant discomfort within the organization. Therefore, all digital transformation initiatives or others should be accompanied by change management projects and the requalification of individuals. The transformation in the way companies create value through digital means will only be complete by engaging and retraining people to actively contribute to the process through organization-wide change management projects and the use of digital tools as instruments of this change, such as intranets and corporate portals.

In conclusion, digital transformation is not just a buzzword; it’s the key to the future of value creation in business.

It is a journey that companies must embark upon to remain competitive in today’s rapidly changing business landscape. Those who embrace this transformation and harness its potential will find new avenues of value creation that were once unimaginable in the analog era. Digital transformation isn’t merely a technological shift; it’s a revolution that touches every aspect of a company, from its products and services to its relationship with customers and partners. It will continue to blur the lines between industries, reshape business models, and create new opportunities for those who are willing to adapt and innovate.

By Hugo Dias & Pedro Lima

Nevertheless, the prevalence of this message is not matched by a commensurate call to action. This discrepancy can be attributed primarily to two responses: first, some believe their traditional industries are immune to the digital shift, and second, others who are willing to embrace the change often find themselves paralyzed by uncertainty, not knowing the next steps to take.

The ubiquity of the transformation

Throughout history, transformative technologies have played a pivotal role in shaping human progress. From our prehistoric ancestors who ingeniously created tools to craft new ones, we have been deeply engaged in a process of continuous improvement. This journey has led to significant advancements, including the culmination of the steam engine and the industrial revolution, which brought about revolutionary changes across various industries. These innovations primarily enhanced our physical capabilities, making us stronger, faster, and more accurate. They enabled increased worker productivity, the construction of larger buildings or significantly faster travel.

In contrast, digital transformation represents a departure from this incremental innovation. It has brought about a radical shift by transcending the constraints imposed by the physical world. Unlike their industry-specific predecessors, digital tools possess a transversal nature, impacting all aspects of society: they empower us to transcend the limitations typically imposed by analog methods.

Understanding the starting point

Companies thrive because of their inherent capability to create value for their customers, a feat accomplished through a complex interplay of processes and the use of resources. They then capture a portion of this created value to offset their operational costs and to generate profit.

Digital transformation may revolutionize how companies create value in two fundamental ways: by reshaping how value is generated or by redefining their core value proposition.

In the case of new companies, they have the advantage of defining their value proposition and crafting the means to create it while fully integrating the digital era as a fundamental tool from the outset. This proactive approach enables them to embrace the potential of digital technologies seamlessly and operate in a digitally native manner.

However, for established companies, transformation needs a different approach. They must first undergo an internal transformation before aiming to reshape their market impact or fight newcomers. This journey involves two additional steps: understanding the starting point and instilling an organizational culture that welcomes change.

Redefining the value proposition is a foundational element, requiring a revision of strategic plans and the formulation of an overarching vision that will serve as a guiding beacon for future decisions.

Equally essential is comprehending how value is currently being created. Only with clear and unified visibility into their processes (for instance, through Business Process Modeling) and how the organization is set to serve the client, can they pave the way for optimization in the digital era.

With the right diagnostic, it is possible to apply the overarching benefits of digital transformation to each case.

Know more, on part II.

By Hugo Dias & Pedro Lima