Why Digital Transformation Needs a Platform

Companies in all industries are ramping up tech investments to modernize operations, enable new ways of working, get ahead of competitors, and, of course, boost that bottom line.

But, focusing on capabilities alone isn’t enough. If you want to be successful, you’ll need to build a platform that combines disparate data sources, unifies systems and processes, and allows you to pivot on-the-fly when the game suddenly changes.

In this article, you’ll learn why DX platforms make or break a business – and get a closer look at some of the specific ways this core foundation fuels all digital strategies.

What is a Digital Transformation Platform?

A digital transformation platform is an all-in-one solution that helps organizations achieve DX goals by providing the tools and capabilities needed to support initiatives across three key domains: people, processes, and technology.

MIT Sloan’s New Elements of Digital Transformation provides an updated framework that breaks down how “digital masters” use digital technologies to create a competitive advantage. In it, researchers explain that the DX platform consists of the following components:

• Core. So, the core platform handles back-end operations and transactional systems that support critical business processes. In most cases, your ERP is your core platform — a unified system that serves as your company’s digital backbone and enables you to manage everything in one place.
• Front end. The front-end platform is responsible for powering all externally facing apps, services, websites, and portals your customers and partners might interact with. It works with the core platform and is responsible for things like processing payments, collecting feedback, and ensuring that all end-users have a consistent experience with your company.
• Data platform. The data platform connects to the front end and the core and enables orgs to work with advanced analytics, design and test AI models, build apps, and process huge volumes of unstructured data like text, voice, images, etc.

Here’s a screenshot from the report that illustrates how the digital platform props up the rest of the business:

Why Does Digital Transformation Need a Platform

The short answer is, it’s a unity thing.

See, DX is never about any one process or product. Even projects focused on a specific business area require a holistic approach.

Any changes you make to production processes, sales tactics, project management workflows, whatever will create ripples across the entire organization.

For example, changing the way you manage projects might change how finance handles cash flow forecasting, the information sales reps share with prospects, or how customer support interfaces with clients.

Next, we’ll look at some of the more specific benefits the DX platform brings to the table to help you understand its vital role in context.

Greater Visibility & Granular Insights

A digital transformation platform can provide insights into your business that can help you make better decisions and drive growth.

BCG analysts say that one of the key differences between digital laggards and what the firm calls “bionic companies” is the use of a platform operating model. The term describes a unified platform with minimal dependencies on third-party apps, services, or integrations.

So, bionic companies are masters at blending human capabilities with technology to unlock new business models, optimize operating processes, and deepen customer relationships. Having that unified platform allows these orgs to build cross-functional teams, enabled by the tools, tactics, and support they need to produce critical outcomes.

C-suite leaders have the visibility they need to work closely with IT and all department heads, while also granting them enough freedom to make decisions on their own.
What’s more, executive leaders can draw on real-time insights to make decisions about funding digital initiatives, providing resources and training, and overseeing project implementation.

Laggards, on the other hand, tend to use a siloed operating model in which individual business units make decisions in a vacuum.

Because they lack real-time insights and end-to-end visibility, lagging orgs tend to rely on top-down mandates and one-size-fits-all decisions. This means, business units must interpret directives on their own, leading fragmented customer journeys. And, it also means teams (and their leaders) lack the autonomy they need to make decisions that help them achieve their goals.

Improved Efficiency and Quality

As mentioned, the right DX platform also allows orgs to move away from top-down oversight.

Each business unit has more power to make decisions on their own, while also ensuring that everyone stays aligned around the same strategic vision.

That hyper-connectivity also unlocks some serious efficiency gains.

For example, you can design end-to-end processes and workflows on a holistic level. This, in turn, unlocks seamless access to critical data — while also enforcing identity and access management best practices.

Cross-functional teams can work together — leveraging institutional knowledge, self-serve analytics, and low-code solutions to develop solutions that solve very-specific problems. And, of course, a unified platform also allows you to improve efficiency and quality while at the same time, reducing costs.

Increased Agility

A digital transformation platform allows you to quickly respond to changing market conditions and customer needs.

The BCG report we mentioned highlights the example of a large retailer struggling with a legacy system that prevented its employees from sharing customer data across channels.

The company ended up investing in a DX initiative focused on reorganizing its tech platforms, apps, and teams around specific customer domains (think – customer service or sales).

Those domains served as a blueprint for redesigning the entire org structure and governance policies. And, in just one year, that company was able to double revenue growth from its digital platforms.

DX Platform Are Never Just One Platform

Here’s the thing about digital transformation platforms: they’re rarely, if ever, composed of just one piece of software. Instead, platforms typically include several apps, services, integrations, and customizations that build on the core platform’s of-the-shelf capabilities.

The reason for this is, companies need industry-specific platforms that leverage big data, AI, and automation to drive specialized outcomes. What’s more, those solutions must be unique to generate any real competitive advantage.

But, it’s also important to understand that opting for a best-in-breed approach isn’t a good idea, either. It’s better to stick within the same ecosystem — choosing a primary solution provider and staying within its network of authorized partners and ISVs.

Now, we’re partial to the Microsoft universe, but Salesforce, SAP, and countless other big-name providers operate the same way. There’s usually a core ERP/CRM, and users have the option to add-on solutions that cater to specific business functions — be it field services, sales, finance, or HR.

If you look at the Microsoft cloud ecosystem, all apps and services run on one common data model. Dynamics 365, Microsoft 365, Azure, the Power Platform — are all interconnected. So, you can extend D365’s capabilities with embedded BI and custom apps, automate and streamline MS 365 workflows, and accelerate development in Azure.

Now, let’s say you’re using a D365 Finance with a Salesforce CRM. You can still connect Salesforce with D365, Azure, and the Power Platform, but you’ll probably experience some fragmentation.

For example, you might run into data entry or formatting errors that could prevent you from unlocking the full potential of your data.

In a recent interview with ZDNet, Saïd Business School CIO Mark Bramwell explained that while cloud-computing has made it easier than ever to buy technology, the choices you make at the earliest stages will set you up for success – or failure.

He says every decision is strategic. And, from the very beginning, you’ll want to think about things like growth, scalability, security by design, and user experience. Ultimately, it’s about building a strong foundation that can take your company into the future.

Final Thoughts

The only way to win in today’s complex business environment is by taking a platform-based approach to digital transformation.

If you’re getting ready to embark on your transformation journey, you need a unified platform to support your business at every stage – and ensure that you hit every short and long-term objective in your big-picture plan.

But, we’ve also seen enough transformation journeys to know that you need a partner to help you navigate the complexity of building, implementing, and optimizing that platform in a way that aligns perfectly with your unique needs.

Velosio is a full-service Microsoft Gold partner that provides industry-specific solutions and support for D365, Power BI, Azure, and more. Book a consultation to learn more about our process, services, and how we help clients successfully transform.

More resources:

Digital Transformation in the Post-COVID Age: A Comprehensive Guide

The Business Benefits of Digital Transformation

The Growing Role of AI in Digital Transformation