Digital transformation has become critical for organizations to survive. That’s why businesses are continuously looking to build a competitive advantage by deploying tech at scale to improve efficiency. According to McKinsey’s studies, approximately 90% of organizations are undergoing such transformations. However, there is an essential but usually overlooked topic: the role of integration in digital transformation.
In today’s article, we’ll see how both processes are connected and the importance of each one in today’s business models.
What Is Digital Transformation In Business?
Let’s clarify what we mean in business when we talk about digital transformation. This is the process in which an enterprise develops organizational and technology-based capabilities to continuously improve its customer experience, lower its unit costs and, over time, sustain a competitive advantage. The main idea behind this is to remove the barriers between people and technology.
This creates a whole new work environment where humans and technology freely interact in support of business processes. And the key to achieving this is the seamless flow of data by unifying business and IT processes in one integrated system. So, we can see that integration in digital transformation has a central role, but let’s not rush through it.
What’s the difference between a digital and a “paper” business?
Apart from the obvious, there are many differences between a digitally transformed company and the so-called “on-paper business”. In the following table, we will compare the characteristics of one and the other:
| Aspect | Digital Transformed Business | “On-Paper” Business |
| Data Creation | Digital from the start | Physical, then digitized |
| Data Flow | Automated and seamless | Manual and slow |
| System Interaction | Unified between people and technology | Separated, manual input needed |
| Efficiency | High due to automated data exchange | Limited by slow data transfer |
| Forms and Interfaces | Integrated and flexible | Rigid, manual data capture |
| Process Integration | Fully integrated with technology | Partially supported by technology |
| Constraints | Minimal, smooth data flow | Data flow is a major bottleneck |
What Is the Most Common Barrier in Digital Transformation?
According to a recent MuleSoft study, 80% of CIOs signal integration issues as the main barrier to success. The reason for this is quite intuitive. As we said, data flow is crucial for the correct implementation of new technologies in workflows, and integration ensures seamless connectivity between applications and systems.
This is also backed by the fact that, while organizations use an average of 1,061 different applications, only 29% are integrated.
This leads to inefficiencies and higher costs, with enterprises already spending an average of $9.5 million on failed digital transformation initiatives. All of this makes clear that integration has a crucial role, and, without it, this process becomes just an important expense.
What Does Integration Mean in the Digital Transformation Process?
Integration in digital transformation refers to the process of connecting systems and applications to eliminate data silos and streamline user interfaces. This is crucial for modernizing processes and achieving a cohesive technology environment, both essential to building the necessary data flow for this kind of workflow change. In this sense, integration is the mandatory first step in a digital transformation process.
The Role of Integration in Digital Transformation
As its first step, integration in digital transformation has many essential roles. However, they can be summarized in the following four:
- Eliminating Data Silos.
- Creating a modern data platform.
- Ensuring more reliable outcomes of digital transformation initiatives.
- Managing the increased app complexity.
In the following sections, we will analyze each one of these roles. But you can get fresher insights into core business integration trends by following us on LinkedIn. Join us there to be always updated with the latest key industry events and news.
1. Eliminating Silos
Integration in digital transformation helps break down data silos, allowing for a more cohesive and unified data environment. This is essential for modernizing technology-embedded processes. It could sound simple but, according to MuleSoft’s report, this problem affects 34% of IT leaders, slowing down operations, keeping valuable data unavailable, and bringing several inconsistencies across an organization’s system.
2. Creating a Modern Data Platform
Integration in digital transformation’s early stages allows you to build a new data platform that supports both legacy and new processes, enabling them to coexist during the transformation process. This approach offers several key benefits:
- Seamless Coexistence: By integrating rather than consolidating source systems, legacy systems can continue to operate alongside new technologies, ensuring that existing investments are not wasted and a smooth transition to new systems and applications.
- Scalability and Flexibility: Integration allows the data platform to scale and adapt to changing business needs. New systems and applications can be added without significant disruptions, and old systems can be phased out gradually.
- Enhanced Data Accessibility: A modern data platform built on integration principles ensures that data from various sources is easily accessible and usable across the organization, improving consistency and reliability.
- Improved Data Quality: Integrated systems help maintain high data quality by ensuring that data is synchronized and up-to-date across all platforms, leading to more accurate analytics and reporting.
3. Avoiding Costly Mistakes
As we said before, the average cost of a failed or unfinished digital transformation program has risen to $9.5 million, highlighting the financial risks of getting it wrong. In this sense, an effective integration in digital transformation early stages can mitigate these risks by ensuring smoother transitions and more reliable outcomes.
4. Managing Increasing Complexity
As we have said before, organizations are using more applications than ever, with an average of 1,061 different apps in use. This creates a complex environment that, without the right coordination, could take down any digital transformation process. In this sense, integration can ensure that these applications can communicate and share data effectively.
Explore GenAI Digital Transformation with Inclusion Cloud
GenAI indeed plays a transformative role in digital transformation by offering significant opportunities for value creation. These new technologies help companies solve complex business problems by providing advanced data analysis, automation, and innovative solutions. However, you must align your AI initiatives with your business goals to create real value. Otherwise, it’s just a waste of money.
At this point, it is best to rely on the insights from companies more experienced in using AI for digital transformation. Staying informed is essential so you don’t miss any of these opportunities. But don’t worry. You can follow us on LinkedIn to be constantly updated with the latest industry trends, news, and key events.