As individuals increasingly choose mobile devices and the Internet as their preferred ways to buy products and engage services, many businesses are shifting to digital relationships as their primary way to interact with their customers. This way of interacting and transacting with customers through digital means is broadly referred to as “digital business.”

This trend is so pronounced that practically every modern enterprise I talk with today is engaged in some form of a digital businesstransformation process. However, it’s not quite as easy as having a website that enables online transactions. The most effective implementations of digital business address a range of capabilities that ensure a safe, dynamic, and comprehensive experience for the customer.

In other words, an experience that is as engaging and compelling, or even more so, than what the customer would otherwise get through a live interaction. Gartner defines digitalization as “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities.”

Digitalization also presents new opportunities to instrument and measure interactions with customers, which in turn creates new opportunities for leveraging data to enhance the customer experience and create new revenue streams from new digital products or services.

Instead of just simulating the physical experience, the digital experience is meant to expand upon it by bringing more content and capabilities to bear in real time for the customer. This is why new revenue streams are possible, since new services of integrated information or functionality can be created that generate revenue on their own or drive broader adoption of products and services.

The concept of digital business, while easy to define, is not trivial to realize. Many cloud applications or services have emerged that solve some, often small, part of creating a digital business. Together, these various services and tools run the risk of inflating a company’s expectations about how quickly or easily it can be digital. You don’t create a digital business simply by purchasing a cloud app or service.

The reality is more complex. The customers I meet with who get it right know it’s really about a combination of technologies and services, put together to meet their organization’s specific strategy for business. Even the most innovative and best-equipped organization will have to tackle three real-world challenges in the pursuit of digital transformation: Security and data privacy; Responsiveness; and Integration.

Each of these areas represents a class of problems—not just a single item—and it’s important to understand how they intersect in creating a world-class digital experience for your customer. In virtually any digital business scenario, enterprise cloud implementations continue to proliferate, and represent truly big data opportunities (no pun intended). And with so much valuable information traveling between various endpoints and in and out of the cloud (or multiple clouds for that matter), the need to safeguard that data rises exponentially. Thus, cybersecurity and data privacy form the first challenge all digital businesses must address.

Security threats are ever-present and constantly evolving, as are the compliance requirements established to mitigate them. While cloud computing has enabled innovation and delivered tremendous benefits in terms of flexibility and rapid time to market, cloud technologies don’t automatically solve every issue, especially as it relates to data. Each new data channel or input requires you to properly govern, manage, and integrate data (and the underlying, related business processes).

Without exception and regardless of whether a company is a small insurance firm or a multinational telecommunications giant, any organization setting out on a digital transformation journey must establish a security strategy that scales with the organization and the scope of the services offered.

The second hurdle is business responsiveness, in other words, the business’ ability to scale with demand and operate in real time. In fact, this is why many companies pursue digital business in the first place: to give a more dynamic experience to the customer that conforms to what the customer wants or needs at any given moment. Organizations can deploy of a variety of emerging technologies to provision highly responsive, real-time capabilities.

Once adopted, these new technologies often deliver transformational improvements in the speed of business. This is why the cloud now supplies so much more than just SaaS applications. It’s also about very different development technologies, tools, and techniques.

IT departments aren’t the only organization in your enterprise seeking DevOps-style relationships, efficiency, speed, and operational fluidity. Tapping into infrastructure and scaling horizontally to support new capabilities is key. By leveraging existing services for use in parallel business units, organizations can dramatically cut development times and accelerate time-to-market. In addition, success with the customer experience often depends on real-time analytics and in-the-moment responsiveness. That’s powerful motivation, and it requires a well-oiled operational machine to get there. Developing that fluidity is a tough process.

According to a recent Forrester survey of 200 business and IT decision makers in retail and banking, 46% of respondents take multiple days or longer to connect data to necessary users; 44% take multiple days or longer to provide alerts to necessary parties regarding critical events; and 50% take multiple days or longer to run analytics and generate reports.

Achieving immediate responsiveness is a high hurdle. Once achieved, it enables real-time customization of actions and responses, which in turn help you to automate how you adapt to changing circumstance, opportunities, and threats.

Given the companies in retail and banking sectors represented in the Forrester survey, consider the impact on responsiveness for functions as far-reaching as authentication and authorization, account management, credit-card transaction clearing, shopping cart services, denied parties list screening, and so on. Furthermore, as companies begin to deploy artificial intelligence and machine learning in their systems, they’ll need real-time information to feed those systems.

This takes us to the next hurdle. The third hurdle to clear for digital transformation is integration. Let’s consider a large international clothing retailer with several thousand employees supporting several million customers. Thisbusiness has already invested heavily in big data utilization and a sophisticated analytics architecture. However, massive data collection and analytic capabilities no longer define the state of the art in consumer services.

As outlined already, operating a digital business increasingly requires the firm to collect and act on information—collected from diverse web, mobile, and social data sources—in real time. Gaining the ability to process events and act upon data within a small window of opportunity can create tremendous value for any retailer (really, any business in any industry).

Consumers expect speed and immediacy. If our example retailer could identify the right opportunities, make more accurate predictions about its customers’ needs, and create automated actions to satisfy those needs—say, a text alert about a new selection of dresses currently in stock at a nearby location in a color and size that matches a customer’s preference revealed in previous purchase data—it could provide better service and a better customer experience.

To make this scenario work, you need to quickly merge historical and contextual data and immediately convey it to the right person. It’s nearly impossible to shoehorn capabilities like this on top of existing functions without bringing your operations to a screeching halt.

In that same Forrester survey mentioned earlier, 46% of respondents reported that integrating new solutions and apps with their existing technology set was a top business challenge. In many ways, integration is also essential forsuccess with the first two hurdles. With well-integrated and easy to use systems and data, you have the foundation for an effective security model and for achieving true responsiveness.

This combination of being able to quickly integrate new technology into an organization’s existing operations framework and gain access to actionable data is the third digital transformation hurdle to be cleared. There are solution components and technologies to help you clear each of the three digital business hurdles I’ve described. You just need to apply them as part of an intentional strategy with clear goals, a good architecture, and systematic execution.

Like any initiative or project that can deliver big results, it takes some planning and effort to pull it off. But with digitalization, it’s not just well worth it from an ROI perspective, it represents the inevitable future of business for all of us.

(About the author: Murray Rode is chief executive officer at TIBCO Software. Murray joined TIBCO's predecessor company in 1995, and was then instrumental in the creation of TIBCO Software in 1997 and its subsequent initial public offering in 1999. Since that time, Murray has held a diverse set of roles of increasing responsibility covering areas such as mergers and acquisitions, strategy, alliances, finance, marketing, and a range of business units and product groups. Prior to becoming CEO, he held the executive roles of chief operating officer, chief financial officer, and executive vice president of strategic operations.)

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