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Digital Strategy vs Digital Transformation. Which One is Better?

By Ardian
14 / 12 / 2020
People, computer and laptops
Digital Strategy vs Digital Transformation?

Now we have entered the digital era, where everything is easier with the help of the internet and technology. In this era, all companies need to improve how they think, how they deal with consumers, partners, and vendors, and how the organization functions within them.

What is Digitalization and Digital Transformation?

Digitalization is transforming the inside or the environment of a company. Its daily presence and its major effect on sales, margin, growth, and creativity, illustrate the increased interest of businesses in digitalization. Moreover, it does not only impact businesses that are technology-based industries, it affects or may affect any company, any industry, any form of work, any business activity. New technology can significantly impact all businesses.

Digital transformation, on the other hand, is broader than digitalization as a way to move to digital business. Digital transformation is the transformation of company operations, systems, products, and models to take full advantage of digital technology opportunities. The primary objective is to enhance efficacy, mitigate risk, or explore new possibilities for monetization.

A survey of directors, CEOs, and senior executives found that their #1 worry in 2019 is the prospect of digital transformation. Research shows that 70% of companies that initiate digital transformation didn’t achieve their stated objectives. But, according to other surveys, 21% of those companies say they've accomplished the digital transformation. This indicates that the other company remains underestimated digital transformation.

Digital transformation actually drives changes in client experience, operational processes, and business models. The process of digital transformation includes teamwork around the whole company and entails changes in the culture of the business. This digital approach relies on technology, not culture. Many digital technologies provide opportunities for gains in productivity and consumer intimacy. But if people lack the right mindset to adapt and the new business structures are flawed, those shortcomings will be clearly magnified by digital transformations.

What is Digital Strategy and Its Importance?

Digital transformation requires a digital strategy that looks at the goals, current situation, and how to move forward on a transformative journey in a way that makes sense and links the dots, like any strategy.

Today, with the implementation of a digital strategy, every company could leverage the value of this technology. Such a technique consists of a mix of emerging technologies, data, and physical resources that enables human output to be enhanced. Failure to execute it would weaken a firm's productivity. A strategy for digital transformation begins with answering key questions, such as what, why, how, and who. A digital transformation strategy builds bridges between the current state and the desired long-term plan. A digital strategy is in short, not an option. It is becoming a necessity for any company that wishes to stay competitive in its markets.

A digital strategy must transcend conventional functional areas and business processes allowed by IT. While it entails the digitalization of products and services as well as the knowledge surrounding them, it also extends beyond firm boundaries and supply chains to dynamic ecosystems that cross traditional industry borders. Without taking into account the business ecosystem, alliances, collaborations, and competitors, the strategy can not be created, because the ecosystems are intertwined.

Research by PwC, a consulting services, suggests that before developing a digital strategy, you should think about the following questions

  • How will digitalization influence our existing business model and positioning within the value chain of our industry?
  • How can we recognize and join market areas, both within and outside our industry, where value is being created?
  • What areas of our business model are vulnerable to disruption from new competitors, and how can we better handle them?
  • To be a leader in the sector, what skills do we need to build?

Digital Transformation vs Digital Strategy

In conclusion, Digital Transformation is the use of technology to dramatically change business efficiency or impact, while Digital Strategy is about using digital technologies at either organizational or line-of-business levels to achieve strategic goals.

The Digital Strategy addresses the company’s particular problems, thus generating applications or solutions, while the Digital Transformation consists of reinventing the company from scratch, taking advantage of the latest technologies, standards, methods, instruments, and talents.

Other than that, Digital Strategy is short and medium-term, and Digital Transformation is long-term (that involves trial and error, prototypes, and change everything, this usually takes a long time).

Digital Transformation and Digital Strategy are strategic in nature and must be considered at the same time. It is best to combine both practices to be applied to your business. Use OneTalk, OneTalk will allow you to use technology (digital strategy) & also focus on the client experience, operational processes, and business models (digital transformation).

OneTalk is an Omnichannel Customer Engagement product from that aims to improve the efficiency and quality of business relationships with your customers. They provide the best experience to your customers, supported by an interface that can be personalized according to the brand image you want to present.

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