You Must Know the Difference between Business Automation and Business Transformation
By Betsy Burton
You Must Know the Difference Between Business Automation and Business Transformation
After working on the tPaaS market globe this past month, I find the need to republish our definitions for business/digital transformation and business automation. I am finding so many technology service providers focused on “automation” rather than business transformation.
Business automation is absolutely needed by many businesses. And it is certainly understandable that technology providers and particularly iPaaS providers would focus on automation; automation is an easier and more tactical problem to solve.
However, automation is only part of what organizations are needing today (See Market Critical Capabilities for Transformation Platform as a Service (tPaaS), 2023).
Understanding the Differences
- Business automation is the use of technology and services to reduce human work. Implementing business automation can help organizations improve quality of services, simplify processes, or even reduce costs. Organizations that are automating and digitizing are largely keeping existing business models and moving over to digitalized processes and information assets.
Business automation is a reasonable technology investment but a lower business change investment.
- Business (or Digital) transformation is a fundamental change in an organizations business that encompasses specifically designing new business strategies, models, and operations to support new business models (such as digital business) and changing existing solutions, systems, processes, and information to support new business models. Business transformation is largely a strategy-driven business change supported by digital technologies.
Business transformation is a reasonable technology investment but a very significant business change investment.
Automation does not require business transformation.
95% of business transformation efforts require some automation.
- Business modernizing is most often referring to IT modernization, which can include moving some or all existing applications and systems over to cloud services and information to support new business models.
Business modernization is a high technology investment but a low business change investment.
- Business optimization and remediation is a less significant investment that is focused on fixing or evolving current business processes, information, and technology.
Business optimization and remediation is a low technology investment and a low business change investment.
Bottom Line
We have said many times that end-user organizations must use their future-state planning to determine if they need business transformation, automation, modernization, remediation or, just, optimization. They must also understand that each of these approaches requires a different level of investment in business, people, process, information, and technology.
Technology service providers, and particularly iPaaS providers, must determine their future and current state target markets.
Developing an automation-only strategy, while it may help immediate revenues, may result in prospective customers viewing your offers as tactical and not strategic enough. It may also limit your vision to more technology-focused innovations, rather than business strategic or architectural.
Understanding these differences, including their respective opportunities and costs will save your organizations from wasting time, energy, and money, and potentially open an entirely new market of potential buyers.
Interested in driving your business transformation this year?
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This blog on the difference of business automation is part of the Business Transformation blog series by Aragon Research’s VP of Research, Betsy Burton.
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