The differences between Digital Transformation and IT

In the last post, I briefly touched on the definition of digital transformation(DT).

Today, let's take a look at the similarities and the differences between digital transformation and IT.

 

I was wondering why everybody was talking about DT when they seem to know nothing about it, especially the differences between DT and IT. So I thought ‘DT’ could be one of the terms used in marketing.

Do you remember words like e-Business, SOA, Semantic Web, Web 2.0, etc? There were more terminologies for IT marketing but I can’t remember them all. To me, they were the same so I once wondered what makes each term different from another. 

 

What are the similarities and differences between DT and IT? In terms of digitalization, there seems to be no differences between DT and IT. But one of the common positive results from companies using DT is data utilization. As companies like GE effectively used DT, it was possible for them to have data analysis capability and have positive results including a raise in revenue, cost reduction and better performance. These companies have made meaningful changes using not only digitalization but also data utilization. 

 

DT is similar to Big Data. In the past, people made a decision based on their experiences and feelings, but now people have been trying to make data-based decisions. The critical factor of Big Data is to draw insight from analyzing loads of data and then make insight-based decisions on that. DT encompasses the whole process of Big Data and it includes data collection, preparation, analysis, and visualization.

 

As I mentioned earlier, GE has been in the data service business using data from aircraft engines. Siemens has been developing 'digital twin' systems and autonomous logistics systems. Everything is based on the power of data.

 

 

To make them possible, you need to set up your infrastructure so that your applications can create, process, and transfer data well. So we consider all courses related to data analysis to be part of DT.

 

Then another question arises? It doesn't seem to be much different from IT, so why did DT stand out? IT work has traditionally been viewed as the work of the IT department. Rather than influencing the company's main business direction, it had a strong character to support the company's strategy and business. However, DT has become a company-wide item because it becomes a 'transformation' that completely changes the existing business model and creates a new business.

 

Examples of DT include Goldman Sachs becoming more of an IT company rather than a traditional financial company, and attempts by manufacturers to monitor and collect/analyze data and turn it into a data analytics service rather than just manufacturing. Now, competitors of IT companies have expanded not only to IT companies in the same industry, but also to manufacturing companies that promote data business.

 

Unexpected industries and unexpected companies are transforming into IT businesses. Change and innovation are happening.

 

In the next installment, we'll look at DT organizations and IT organizations.

 

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