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Understanding digital transformation

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Digital transformation is how some organizations describe their efforts to bring new technologies, processes, and culture together with shared purpose. This purpose may be to improve customer experience, innovate faster, or simply survive better as digital disruption reshapes their industry.

Whatever the purpose, the most important detail of digital transformation is that it is more than the adoption or modernization of technology. It is often discussed in organizations that want to fundamentally improve technology’s role in many areas of their business—not just in IT. It is ideally seen as a continuous change to the status quo, rather than a project with an endpoint.

There’s no standard industry definition of digital transformation because the challenges that lead organizations to it can be very different, though certain trends have emerged. For organizations already heavily invested in technology, for instance, digital transformation is often about bringing IT into planning discussions sooner so they can support innovation. For organizations not as invested in technology, digital transformation is more often about changing to a digital business model that positions IT as a partner versus simply a cost center.

Why "transformation?"

Other business jargon like "change management" have similar definitions, but it’s no accident that "transformation" has come to define this imperative in the digital age.

Digital disruption is now a constant state for most industries, not just one event. "Transformation" implies more than an investment in the latest technology—it underscores the need to reimagine processes and culture for continuous technology change.

Does it require certain digital technologies?

The term digital transformation is sometimes used to mean new architectures, like microservices, or new processes, like DevOps, or new technologies, like containers and application programming interfaces (APIs). It can often sound like just another way of describing cloud adoption.

There is no single architectural pattern or technology platform that works flawlessly in every single environment. Any organization with legacy applications (and legacy teams), for instance, probably has well-defined and difficult to change development, testing, build, and release processes. They probably also have technical debt that can impede new technology adoption.

Noticing the elephant in the room

While every organization would love to work in a modern technical environment powered by microservices and DevOps, most have layers of infrastructure and hierarchy to rebuild. Their challenge is teaching their lumbering elephant to dance like a nimble ballerina.

The first step is assessing teams, current technical debt, and business strategies. “Teaching an elephant to dance” is a practical and simple guide to get you started. It is informed by experiences across industries, and offers a useful analogy that you can share with your colleagues.

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What do CIOs need to know about digital transformation?

Digital transformation isn’t a product or a solution you can buy for your teams. It’s a continuous process involving new technologies and ways of working in order to gain competitive advantage. This puts CIOs in a key role for transformation initiatives, regardless of their organization’s size or industry.

It’s also true that many in IT see "digital transformation" as just another buzzword, but the business mandates behind it–to rethink old operating models, experiment more, act agile in response to customers and rivals–are very real CIO challenges. New financial concerns driven by the COVID pandemic and economic downturn make it even more important for CIOs and IT leaders to know what’s behind the buzzword, and how to put it into practice.

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By the numbers

Read how a select group of transformation leaders responded to Harvard Business Review’s 2020 digital transformation survey. Of the 690 respondents, leaders were identified based on their success with holistic changes to people, process, and technology resulting in significant revenue growth. Their answers reveal successful digital transformation viewpoints across a range of organization sizes and key industry sectors.

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From experience

Read the definitive digital transformation article from the CIO-focused Enterprisers Project. It answers common questions, provides clarity specifically for IT leaders, and lessons learned from CIOs and digital transformation experts. Because digital transformation is an evolving trend in enterprise IT, The Enterprisers Project provides updated insights as global events reshape businesses everywhere.

What is Red Hat’s digital transformation strategy?

Red Hat believes most organizations struggle with digital transformation because they fail to think beyond the role of technology in their immediate survival. They view digital transformation as a way to keep pace technologically with peers who are disrupting their market with out-of-reach capabilities like artificial intelligence and machine learning (AI/ML), business process automation, or big data analytics.

That’s not enough to ensure your digital customer experience will be viable in the future. The goal isn’t just to survive the next digital disruption—it’s to grow and continuously adapt to change. This process is challenging, but achievable. It takes more than improvements to your IT infrastructure.

Consider Harvard Business Review’s 2020 "Pulse Survey," in which 63% of respondents said that culture was the biggest barrier to successful transformation, 1 up from 55% two years ago.

63%

rank cultural challenges as the biggest impediments to transformation efforts.2

20%

rate their companies' digital transformation efforts as effective.2

No outside consultant or software vendor can ever understand your organizational culture like an insider, yet a closed culture is well documented as the greatest barrier to success.

5 key areas for transformation success

Red Hat has helped organizations of all types with their digital transformation journeys. Through this work we have observed 5 key areas of an organization that must commit to change for long-term success. It is far too common that only 1 or 2 elements are transformed, which is why so many transformations fail. These 5 areas are:

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Leadership should create a shared vision and strategy for every team. They make their organization more adaptable, transparent, collaborative, and decentralized.

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Product management translates the vision and strategy into actionable tactics that can be rapidly tested and iterated upon.

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Development rapidly implements product models using modern practices like DevOps and agile. Their focus should be delivering the best capabilities within time constraints.

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Architecture provides a stable technical foundation that balances the efficiency of standardization against the need for customization.

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Operations establishes a foundation of resilience from unreliable components through the adoption of Site Reliability Engineering (SRE) concepts.

Digital transformation examples

Ford logo

Ford Motor Company shifted to DevOps processes with a continuous integration/continuous delivery (CI/CD) workflow.

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Argentine Ministry of Health improved patient experience with national data network.

Santander logo

Santander Tecnología automated on-boarding and reduced time-to-market for new ideas.

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Shinhan Bank built a microservices architecture that helped reduce operating costs by 60%.