Illustration by Valerie Chiang; Source images:
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Summary.
Companies often assume that if they embrace digital technology in any way, they’re digitally transforming their business. As a result, they often make only ad hoc changes and investments in the digital arena, with ineffectual results. This article provides an introduction to four distinct tiers of digital transformation, each of which meets different strategic objectives and allows companies to maximize the value they capture from digital technologies.It’s easy to acknowledge the game-changing role digital technologies are playing in the modern economy. The challenge, to which most companies have yet to rise, is figuring out how to fully capture the different kinds of value that these technologies offer. Developing a strategy for digital transformation that fully leverages this value is also not easy. Without a comprehensive assessment of what digital technologies can offer, firms tend to assume that any application of modern digital technologies will lead to a digital transformation. Consequently, many of them make ad-hoc business decisions about the use of digital technologies and end up struggling even to maintain competitive parity, despite substantial investments.