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Digital transformation (DX) is the adoption of digital technology by a company. Common goals for its implementation are to improve efficiency, value or innovation.

History

Digitization is the process of converting analog information into digital form using an analog-to-digital converter, such as in an image scanner or for digital audio recordings. As usage of the internet has increased since the 1990s, the usage of digitization has also increased. Digital transformation, however, is broader than just the digitization of existing processes. Digital transformation entails considering how products, processes and organisations can be changed through the use of new, digital technologies. Digital transformation can be seen as a socio-technical programme.

Adopting digital technology can bring benefits to a business, however some company cultures can struggle with the changes required by digital transformation.

A 2015 report stated that maturing digital companies were using cloud hosting, social media, mobile devices and data analytics, while other companies were using individual technologies for specific problems. By 2017, one study found that less than 40% of industries had become digitized (although usage was high in the media, retail and technology industries).

Digital infrastructure

Although the use of digital technology by companies in the European Union is increasing, it has not yet bridged the gap with the United States. As of 2020, 37% of European businesses had not embraced any new digital technology. This was only 27% in the United States.

Municipal investments in digital infrastructure are increasing, but inequalities may lead to a greater divide. Over the period 2017-2020, 70% of European municipalities have boosted their expenditure in digital infrastructure.

A lack of digital infrastructure is viewed as a key barrier to investment by 16% of EU businesses, compared to 5% in the US.

As a result of the COVID-19 pandemic, half of European companies anticipate an increase in the usage of digital technologies in the future. The proportion is considerably greater among companies that have previously used digital technology.

In the 2021 Banking in Africa survey conducted by the European Investment Bank, 89% of the banks polled claimed that the COVID-19 pandemic has hastened the digital transformation of their internal operations; the same percentage believes that the consumer movement toward digital channels will continue once the pandemic has ended.


Disadvantages of digital transformation

1) Data Protection. Large volumes of data can be captured and saved thanks to digital technology. This might be confidential information about persons or businesses. It may be quite difficult to keep this information secure. A single data breach may result in massive volumes of personal information falling into the hands of thieves, terrorists, commercial competitors, foreign opponents, or other bad actors. 2) Terrorism and Crime. Because of its worldwide character, immense scope, and relative anonymity that users might enjoy, the internet is excellent ground for bad forces to operate. Terrorists using social media to promote themselves and encourage others; drug dealers trading on the dark web; pedophiles grooming potential victims, exchanging photos, videos, and other information in chat rooms and other places; and authoritarian regimes attempting to sway or distort elections in democratic countries are just a few examples.

3) Privacy Issues. Personal privacy has become much more difficult to maintain in the digital era, on top of the threats of your personal data being stolen or sold. For example, anyone with a smartphone may snap images and video recordings and upload them to the internet. Employers may look up candidates online and find unpleasant photos of them, as well as watch them voice controversial beliefs on social media or blogs. In public spaces, digital cameras monitor and record our movements. When minor transgressions are exposed on the internet, they can follow a person for the rest of their lives. It's difficult, if not impossible, to keep track of your personal information.

4) Copyright and Plagiarism. Copying and reproducing digital media is very simple. As the music and film industries have realized to their cost, copyright regulations are becoming increasingly difficult to enforce. Schoolchildren can just copy and paste their homework projects without gaining any knowledge. Because of the "sharing" mentality on social media, the original creator of a piece of media is sometimes lost when it is changed and claimed by others.

5) Uncertainty in the workplace. To conduct a job, you used to have to be physically present at the office, but nowadays, many professional duties can be completed remotely via the internet. This has resulted in significant changes in how people live and work, with a rise in individuals working from home being one example. It also has economic implications, since it implies that businesses may hire people from underdeveloped nations with lower salaries instead of workers from wealthy countries for specific tasks.

6) Social Isolation. People are increasingly preferring to mingle and converse using digital gadgets rather than face-to-face contact. This may easily lead to feelings of loneliness and disconnection. Human beings have evolved over thousands of years to have genuine touch, so removing it has a variety of detrimental consequences that we're only beginning to comprehend. According to studies, many people suffer from depression and other mental illnesses as a result of a lack of real-life contact.


See also

References

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