THE DIGITAL TRANSFORMATION OF COMPANIES

What is the digital transformation of businesses?

Definition

With the term “digital transformation means the process of adopting digital technologies at every level of the company, both for primary activities such as sales and marketing, both for support activities such as purchasing, human resource management and business infrastructure.

The digital transformation thus enters the company's DNA, resulting in a "transformation" of its models and procedures.


what is digital transformation


History

The concept of digital transformation dates back to the recent past, even if over time the topic has taken on different characteristics and forms.

At the beginning, in fact, digital transformation was identified with "digitization" of information, or the passage from paper and "analog" documents to electronic formats that can be digitally archived. It was the era of the introduction of business computers and software: a fundamental step but which certainly does not fully exhaust the theme of digital transformation.

Subsequently, the availability of computerized data opened up a new scenario for companies, where tools had to be combined with innovative processes: from this point the modern digital transformation begins, with the acceleration of technological development and the need for companies to remain competitive on the market.


What does digital transformation mean for businesses?

Digital transformation determines a profound change for companies of any size, as it affects the business culture, technologies, value generation and related "operations" connected to these factors.

The digital transformation therefore acts in a "regenerative" way, leading the company to reinvent itself as a whole through the application of innovative solutions that radically change the way the business system works and interacts.

From this point of view, digital transformation introduces the possibility of making work "agile", contributing to the redefinition of the dynamics of time and linearity, with a view to improving the efficiency of production and cost variables.


Goals of the digital transformation of businesses

In the business environment, the  digital transformation has very powerful and revolutionary goals:

  • allow the company to  evolve together with technology, becoming the protagonist of innovation and not passively accepting it as an inevitable consequence of modernization. The company thus becomes the driving force of the continuous renewal of the company, having a role of reference in the world business panorama;
  • optimize the supply chain of the sector to which it belongs, aligning business practices with effective and balanced methods within the same industry, in order to ensure high and homogeneous quality standards in the different stages of product / service processing;
  • make product / service customization scalable and economically advantageous for the company, facilitating the  industrial customization and enormously reducing the timing and expenses related to study, conceptualization, design, prototyping / schematization of the desired product / service;
  • reduce the distance between company and consumer, uniting these worlds thanks to interconnected data and providing real feedback on market trends, in order to facilitate changes in progress or launches of new product / service proposals in line with the latest user requests.

the goals of digital transformation


To achieve these objectives, it is necessary for each company to identify the most suitable path for its digital transformation, while taking into account some important guidelines:

  • Having a digital transformation plan appropriate to your business reality, which explains the type of evolution sought and the technologies necessary for that specific result. In this sense, it is necessary for the company to evaluate the resources available and understand which ones can be channeled into digital transformation activities. This step could lead to the review of some priorities or a review of the corporate structure, changing the organization or analyzing the internal / external gaps that could slow down the digital transformation process;
  • train employees in the correct and independent use of new technologies emerging, enhancing the team's ability to welcome and apply more effective processes to their work routine. This point also requires a change of course in the management of human resources, favoring a model more oriented towards the creative use of knowledge for a better use of the tools provided;
  • abandon the  obsolete technological assets, often a source of huge expenses due to their periodic revision. In most cases, these assets are dated, with little profitability and unable to update to current market demands. Maintaining this heritage means wasting valuable resources, which could be reinvested in technologies that are easier to use, with a better competitive ratio and high-level data analysis performance.

Benefits of digital transformation

The advantages that digital transformation offers companies today are innumerable and are intensifying in the respective business sectors of competence.

In general, for companies the digital transformation is a driving force for growth  and the definitive disposal of traditional business models.  The opportunities arising from digital transformation  they therefore go in the direction of all-round operational progress, both in terms of input and output.

Among the advantages that digital transformation brings to companies we observe:


  • process improvement, as digital transformation solutions make it possible to automate the simplest activities and cancel intermediaries in the most complex phases. This allows you to manage your staff more effectively, having greater agility in daily planning.
  • the  cost reduction and time to market, thanks to a faster and more precise design / realization. The digital platforms currently available allow you to cut costs, refining the quality of the final result. What in the past required several hours of prototyping or design, today is achievable in a much shorter time and with real savings.
  • l’rapid conception of new product / service lines  resulting in a flow of new capital for the business. Through the convergence of data and superior technologies, it is in fact possible to increase entrepreneurship in favor of the supply and production chain, activating additional business lines to those already existing.
  • permanence in the market and extended life cycle of the product / service. With the digital transformation, many companies have been able to innovate products / services that were at a waning stage of their life cycle, resulting in a more durable and stable usability over time. This has helped to consolidate the brand identity and keep the consumer's attention high for that range of products / services.

the benefits of digital transformation


Digital Transformation: technologies

Technologies related to digital transformation have been defined on several occasions as "disruptive", or "disruptive” for its revolutionary scope and in contrast with what existed at that precise moment. At present, these technologies are:

  • Cloud Computing
  • IOT (Internet of things)
  • Big Data
  • Artificial Intelligence
  • Blockchain

Cloud technology or  Cloud Computing it is based on the remote and "on demand" supply of software and hardware resources via the Internet. To cite some examples of the services available on the Cloud, let's think of servers, storage spaces, databases, analytics and BI (business intelligence systems) and function execution programs.

The advantage of the Cloud for digital transformation is expressed in its:

  • scalability
  • speed
  • low cost
  • easy to find
  • reliability
  • safety
  • High performance
  • interaction with other technologies, such as IOT

With the term IOT (Internet of Things) we mean the exchange of information between "devices" (technological devices) enabled for the communication of certain functional data.
These devices can be:

  • and objects with a high computer rate such as smartphones or tablets
  • both objects of common or domestic use, as in the case of home automation where a fridge or a boiler can transmit data to a connected device, notifying for example a fault or the need to change parameters.

Also known as Machine to Machine (M2M), the IOT has had a great development in recent years as regards the b2c (business to consumer) dimension, thanks also to an easy use for the user through mobile application software ( mobile app).

In the industrial field, however, this technology is still used partially and purely on vertical operations.
In the years to come it is desirable that the IOT will develop more and more with its Industrial Internet identity,  favoring a growing communication of the numerous corporate entities involved in corporate processes or transactions, both at the human level and at the machinery level.


digital transformation technologies

I Big Data  among the technologies of digital transformation, they are certainly the most mentioned tool, also for their role with respect to the management of sensitive data and user purchasing behavior on virtual purchase points.

Big Data refers to  methodology that allows to extrapolate, manage and link a very large data series in terms of volume, speed and variety.
This information can be structured or unstructured; their relating helps to understand the links between different events and to predict future phenomena. 

Why are they important? If well analyzed and interpreted, Big Data represents a fundamental tool for making better business decisions and implementing a winning business strategy.

Artificial Intelligence, also referred to as AI (acronym for "Artificial Intelligence) in the context of digital transformation, it is often combined with the concept of" robots "and the possible robotization of the modern factory. Although the application of this technology for machine learning and the reproduction of actions and interactions belonging to the real world is true, Artificial Intelligence has many other potentials within it.

Artificial Intelligence encompasses the possibility of developing hardware and software systems that allow machines to perceive, understand and implement decisions usually taken outside the IT context. This is the example of facial or image recognition, a function previously entrusted to the human eye and now possible through mobile phones or search engines.

The machine can learn in two ways:

  • Machine Learning, therefore training and learning from mistakes how to independently perform a certain task;
  • Deep Learning, or a learning model based on artificial neuronal networks, which emulates human reasoning and its implications.

Everything starts from  algorithms , sequences of instructions that determine the operations (calculations) to be carried out to obtain a result or more results.


digital transformation technologies

Among the developments related to artificial intelligence, two are of particular interest for the digital transformation of businesses:

  • Augmented Reality 
    Augmented Reality consists in the superimposition of images or multimedia information on real environments, both belonging to work contexts and to everyday life.
    It's a  digital transformation technology that exploits the reproduction of objects in 3rd dimension (3D) together with the computing powers of Artificial Intelligence algorithms to calibrate the physical world with respect to the virtual world, making the different elements interact, with updating and dynamic adaptation of the parameters according to the environmental changes that occur.

Find out more  on the opportunities of augmented reality


  • Virtual Reality 
    Virtual Reality provides, as in Augmented Reality,  the creation of a digital model of the reference product, to which certain characteristics will then be assigned. In this case, the object will be placed in a virtual environment with precise qualities and this will allow to carry out interactive analyzes or produce immersive experiences.
    In order to take advantage of Virtual Reality, it may be necessary to have smart devices such as viewers (oculus) and gloves with motion sensors available.

Find out more  on the opportunities of virtual reality


Finally,  Blockchain is a digital transformation system based on the "distributed ledger". It consists of a data structure in “blocks, linked in a chronological way and protected by encryption. Although it is a shared register, it maintains its integrity as the individual contents (blocks) cannot be modified or deleted. The addition of new data takes place thanks to the network nodes, which are able to read the register that contains the blocks and add new information through a shared protocol. Once the add operation is authorized, each node updates its private copy of the data and this avoids any future manipulation.

Popular in the world of cryptocurrencies, Blockchain finds many uses in the financial field and also in the supply chain of companies and businesses, which in this way can track products in a unique way.


Digital Transformation: trends

In the previous year and in the current one, the digital transformation has undergone a further acceleration determined by the global health situation.


Digital Transformation trends 2020

The digital transformation trends in 2020 have seen 5G as the main protagonist and the global need for fast and reliable connections, also by virtue of new smart working practices.

5G is also related to a better usability of the previously mentioned digital transformation technologies (Cloud Computing, IOT, Big Data, Artificial Intelligence, Augmented Reality, Virtual Reality and Blockchain), as a higher transfer speed helps the communication of massive data and allows a more effective real-time interaction between physical and virtual objects / scenarios.


Trends of digital transformation 2020

Speaking of information, another 2020 digital transformation trend was the predominance of advanced data analytics as a competitive advantage for businesses.
From this point of view,  the collection of massive data always implies the need to have systems to support interpretation and here artificial intelligence (AI) and its specializations come into play.


With respect to AI, the development of Conversational AI continued in 2020, i.e. artificial intelligence applied to voice assistance and language learning. In this case the applications are expanding more and more too in the industrial field, for example by including the possibility of simultaneous translation during interventions or maintenance in augmented or virtual reality.

In the current year, the user and consumer experience (user and customer experience) is even more important, also given the success of online shopping and home delivery. An interconnected world is therefore being created where the boundary between real and digital is increasingly thin: from here among the trends of digital transformation we find the theme of digital privacy (Digital Privacy, that of smart cities and connected vehicles), first step for fully automated and human-independent driving systems


Digital Transformation trends 2021

In the year 2021, will continue growth of 5G, Artificial Intelligence, Augmented Reality and Virtual Reality and all the other technologies mentioned, according to the digital-made culture that companies have also adopted.


Trends in digital transformation 2021

The evolution of technologies also leads to a lower cost for the implementation and business instrumentation necessary for these applications. What will be observed in 2021 is the  democratization of innovation , that is, more and more companies and industries, even small ones, will be able to have access to technologies with a high competitive impact in a manner similar to their financial possibilities.


Digital transformation and sustainability

sustainability of digital transformation

The advancement of IT equipment, which has gone hand in hand with the development of new software solutions, currently allows  take advantage of digital transformation technologies with a minimum budget and extremely moderate application times.


digital transformation

The equipment necessary for digital transformation (graphics cards, servers, processors, etc.) today are increasingly powerful and economical, favoring the  sustainability for companies of operations oriented to digital transformation of their processes.
Let's think, for example, of smartphone processors, which are constantly evolving and often much faster than those of a normal desktop computer.

Or the aforementioned phenomenon of Cloud Computing, for which you can take advantage of ultra-capacious servers with a subscription at a very low price, for which you can take advantage of ultra-capacious servers with a subscription at a very low price.

In the past, the high costs of adjusting the structure and periodic maintenance meant that only very large companies could invest in digital transformation. Normalization is now taking place and  standardization of access to digital transformation solutions for all industries in the economic landscape, whether they are multinationals (MNEs) or small and medium-sized enterprises (SMEs).


Digital Transformation: examples

Digital transformation is an opportunity for everyone and this is particularly true for companies, of every sector and type


Digital Transformation Automotive

The sector  automotive has always been characterized by a high rate of innovation, which also forces the need to change the product on an ongoing basis and provide the customer with new purchase stimuli as regards models and accessories.


automatic digital

The digital transformation in the automotive sector sees them as major protagonists all systems that revolve around AI (artificial intelligence), specifically augmented reality and virtual reality applied to the areas of  design, prototyping, assembly line training, automobile sales and marketing.


Learn more


Digital Transformation Automation Manufacturing

The world of automation manufacturing, also known for its important component linked to packaging and automatic machines, it is moving more and more towards the implementation of digital tranfoemation as regards all its processes, both production, management and customer assistance.


digital production

In addition to the already mentioned design and prototyping, for which this sector too finds many benefits in the use of solutions related to digital transformation, an application that gives increasingly satisfactory results and that of the augmented area for remote maintenance of machines and systems. This technology has indeed represent a step forward in terms of efficiency and effectiveness, solving what were the criticisms of the systems of

traditional remote assistance, often not very useful and approximate in solving customer problems

Learn more


Retail and Fashion Digital Transformation

The retail landscape includes many industries, both b2b and b2c.
The world situation today has certainly given  boost to the digital transformation of companies that gravitate around the sector , favoring the success of the famous online shops or e-commerce.


digital fashion

The digital transformation of retail therefore had its main focus on marketplaces and online sales, with a positive trend that continues vigorously.

For the present and the future, the introduction of other technologies such as virtual reality, augmented reality, as well as blockchain for the management of the supply chain and supply chain is certainly of interest.

Compared to  virtual reality and augmented reality , the sector of  fashion, also directly involved in the retail dynamics, it has already obtained numerous advantages through applications such as  virtual fairs, virtual showroom e virtual online store.

Learn more


Digital Museums

Digital Transformation Museums

The  museums and art sector  has recently begun to apply the  various opportunities offered by digital transformation.

Some organizations have discovered a real success of popularity thanks to the tools provided by digital: think of the Uffizi museum in Florence, which in a short time became top creator on the social media Tik Tok dedicated to the very young.

Beyond the visibility that digital tools have provided to the world of cultural heritage, in this case too the technologies of artificial intelligence are showing great versatility and usefulness for the sector.

Augmented reality, for example, it is increasingly common in museums, making the consultation of captions or extra content related to a specific work or exhibition interactive and fun.

Find out more  on the opportunities of virtual reality


Digital Transformation in Healthcare

Health, together with the whole area dedicated to  pharmaceutical and medical, initially applied the  digital transformation  for its office procedures, such as:

  • booking or managing tickets and appointments
  • the study of data for supply / service forecasting and improvement activities

In recent years, thanks also to the better connectivity of the internet, the specializations are expanding to numerous fields of application:

  • augmented reality for the training of doctors on surgical operations of all sizes , with a focus on highly complex interventions and where the cooperation of a team made up of different professionals is required, in some cases even remote participants;
  • virtual reality for computer aided science and computer aided drug design, or the study in pharmaceutical laboratories  of molecules, their shape and the interaction between molecule and active ingredient to find the  best performing "geometric" and scientific combination in terms of effectiveness in the organism undergoing treatment.
  • augmented reality for the production of medical and biomedical media, to contribute to better ergonomics and design of artifacts such as prostheses.

See how  digital transformation is contributing to the evolution of the medical sector


Digital Transformation in Italy

The digital transformation for Made in Italy represents a salient topic for the Italian digital agenda.

In European and international statistics, Italy is still in a non-dominant position  & nbsp; as regards the degree of digital transformation of its industries; this is why it is important at a time when “traditional” movements and methods of trade are slowing down, to proceed with the innovations necessary to help the country and its companies keep up with the digital transformation of businesses worldwide.

digital transformation in Italy


Digital Transformation and industry 4.0

Industry 4.0 refers to the most recent evolution of the corporate world. Starting from the first industrial revolution based on mechanics up to the present day and precisely the fourth industrial revolution where the "cyber / physical" work environment prevails, that is the alternation and complementation of more virtual reality. This last concept must also be combined with the model of the Smart Factory, the connected, digitized "intelligent factory" that applies all the technologies of digital transformation for its optimal operation.

Regarding Industry 4.0 in Italy, a industry plan 4.0 with the aim of providing tools and funding to help industries transition towards the digital transformation of their processes. In fact, it appears that over 80% of Italian businesses do not use 4.0 technologies, much less plan to implement them in the future.

The plan is structured with concessions and economic incentives, which go to support companies and start-ups in digital transformation operations aimed at:

  • intervene with horizontal actions on enabling factors
  • apply the logic of technological neutrality

Digital Transformation PMI

The Italian industrial fabric is mostly composed of small and medium-sized enterprises (SMEs), which together represent a great resource and the engine of the country on many fronts.

The SME digital transformation therefore represents a necessity to achieve the modernization of Italy and allow many companies to remain competitive in a constantly changing globalized market.

pmi digital transformation

In addition, many of these companies are part of an industry that revolves around large international groups with a high content of innovation, therefore  digital transformation is even more urgent because it guarantees belonging to a supply chain and continuity of production activity.
Other element,  digital transformation is an excellent ally for exports  and to increase direct sales to new ones

markets outside the one they belong to. Said this,  digital transformation in SMEs  it is a path that requires one  review of business models and processes, with a view to renewed competence and organizational capacity. 
For this reason, it is essential that companies that undertake this path rely on interlocutors trained on the subject, who can advise them on the state aid available and on the best technological and instrumental practices to be implemented.


Digital Transformation: incentives

The incentives that the Italian state has put in place for digital transformation can be grouped under the name "calls for digital transformation".

incentives for digital transformation in Italy


Through  Bet  (Ministry of Economic Development) e  Invitalia (National Agency for the Attraction of Investments and Business Development) various initiatives have been activated, among which we can distinguish:

  • Transition 4.0 - formerly known as "Industry 4.0", Transition 4.0 is the new release of the national digital transformation call, released in December 2020.
    It provides for a total investment of 24 billion euros, through measures with a duration until June 2023 and a 2-year tax credit. Among the possibilities included in the financing program, we can distinguish: purchase of  tangible assets 4.0, investment in intangible assets 4.0, investments in agile work, investments in research and development, investments in technological innovation, investments in digital innovation, investment in design and aesthetic innovation, investments in training. 
  • Call for digital transformation smes  – dated June 2020 and with its update of October 2020, this measure is dedicated to  digital transformation of the production processes of micro, small and medium-sized enterprises. 
    It promotes the application of advanced technologies and / or technological solutions at the service of the supply chain, also suggesting the presentation of projects in aggregate form, through a DIH (Digital Innovation Hub) or an EDI (Digital Ecosystem for Innovation).

Digital transformation is here and now. Contribute to the development of the country and make your company's work modern, effective and efficient in the global landscape.
Vection stands alongside companies by offering customized digital transformation solutions, through the creation of cutting-edge systems based on digital technologies of augmented reality and virtual reality.

Discover the new dimension 4.0, entrusted to Vection.

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