True value creation occurs when companies rethink their strategies
*By Darci de Borba
Digital transformation, with its promise of disruptive innovation and agility, has been a strategic imperative in many industries, especially in the services segment. However, for many organizations, the success of this transformation involves more than the adoption of new technologies. It is a process that demands a profound reassessment of the value cycle, where both value creation and value destruction are inevitable dynamics.
In the context of digital transformation, the value cycle is not limited to the implementation of advanced technologies such as automation, big data or artificial intelligence. True value creation occurs when companies rethink their strategies, focusing on customer experience and engagement, organizational flexibility and process optimization. As highlighted by McKinsey, digitally mature leaders achieve superior results with up to five times greater growth in EBITDA compared to companies that are still in the early stages of transformation (Martins et al., 2019).
This value cycle manifests itself in different dimensions, such as internal processes, communication and customer management. In practice, this approach ranges from automating repetitive tasks to personalizing interactions with customers, offering a more fluid and tailored consumer experience. However, when implementing these changes, companies face the risk of value destruction, which can occur when innovations create complexity or instability in the customer experience.
One of the fundamental challenges is cultural adaptation within companies. For digital transformation to be effective, it is essential that employees and leaders are aligned with the new strategic vision. Rogers (2017) emphasizes that success does not depend exclusively on technology, but on a profound cultural change, where flexibility and continuous learning become institutional norms.
Another pertinent aspect is the need to integrate new business models and real-time connectivity, which provide companies with data and agility in decision-making. This represents significant value for organizations, but requires a strategic approach to balance risks and opportunities. For example, the digitalization of critical processes increases efficiency, but also demands robust risk management measures.
The following figure illustrates the two levels that structure the value cycle: the level of production of effects and the level of analysis of effects. At the first level, the stages of proposition, communication, delivery and perception are interconnected, indicating a continuous flow, like a production line, that will result in the effects of creating or destroying value. The effects depend on how the customer perceives and interacts with the proposed and delivered value.
This final value is then captured, generating a return for the organization, whether positive (value creation) or negative (value destruction). In other words, the way in which the organization orchestrates its digital transformation impacts financial results and this process can be mapped throughout the value cycle.
Digital transformation is therefore a continuous cycle of adaptation. Companies that are able to balance innovation with well-established management practices are better positioned to create long-term value. In contrast, those that neglect the cultural impact and risks associated with intensive use of technology may find it difficult to capture this value, or even contribute to its destruction, revealing the dark side of digital transformation.
Therefore, the key to a successful digital transformation lies in the ability of organizations to integrate new technologies strategically, with a customer-centric vision and operational resilience. In an increasingly digital world, the value generated by these initiatives depends directly on the ability of companies to navigate the complexities and uncertainties inherent in the transformation process.
*Darci de Borba is a researcher at the ABES Think Tank, a planning and research technician at Ipea, a PhD student in Administration at the University of Vale do Rio dos Sinos (UNISINOS) and a Master in Administration from the Pontifical Catholic University of Rio Grande do Sul (PUCRS).
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
Article originally published on the IT Forum website https://itforum.com.br/colunas/transformacao-digital-valor-lado-sombrio/
References
Martins, H., Dias, Y., Castilho, P., & Leite, D. (2019). Digital transformations in Brazil: insights on the level of digital maturity of companies in the country. Mckinsey&Company, 3–32.
Rogers, DL (2017). Digital transformation: rethinking your business for the digital age. In Authentic Business (1st ed., Vol. 1). Authentic Business.
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