Digital transformation has become a strategic necessity as opposed to a buzzword within the context of a volatile, uncertain, complex and ambiguous (VUCA) business environment. Organizations utilizing disruptive technologies including cloud computing, Internet of Things (IoT), robotic process automation (RPA), and enterprise resource planning (ERP) systems are changing the ways in which value is created, delivered and captured. In studying digital transformation, this article offers a critical perspective on the argument that digital transformation is the driver of competitive advantage through changing ways of working, faster decision-making and the ability to adapt in real time . Based on actual practices in the industry and with insights from the industry it emphasizes how firms that connect digital strategy to enterprise performance objectives end up with better market position and durability.

Introduction
Digital transformation has gone from being a buzzword to become foundational to business strategy. Where it used to be applied to just the digitalization of the processes, it now implies a fundamental organizational transformation through automation, cloud, data, and agile. Even companies in notoriously competitive fields like logistics and finance now recognize that digital efforts aren’t just the purview of the IT department, but rather a key part of innovating, cutting costs, and focusing on the customer. This change is more pronounced amongst Nigerian firms that are investing in ERP systems, performance dashboards and intelligent systems for insight and execution in a fast-moving economy. With the integration of digital transformation into the firms’ planning processes it is now clearer how it impacts the equation of competitive advantage.

The Strategic Imperative of Cloud, IoT, and Automation
The core of digital transformation is an intentional leveraging of connected technologies. Cloud computing makes it possible to scale infrastructure, use real time data, and eliminate costs associated with physical servers. It is “elasticity”, and therefore ability to quickly launch applications, promotes agility and innovation across departments as well (Brynjolfsson & McAfee, 2014). On the other hand, IoT devices are changing the way asset tracking and customer behaviour analysis are done, as well as preventive maintenance, by supplying real-time data to the decision systems behind them.

Automation ranges along a continuum from robotic process automation (RPA) to machine learning and makes organizations more efficient by automating mundane tasks thus allowing human capital to engage in higher value activities, including higher level strategy and client cultivation. Such technologies now permeate supply chain optimization, CRM, and financial reporting, enabling firms to cut down on human error and react promptly to changes in the market.

Digital Transformation and Business Model Innovation
Digital transformation is disruptive to traditional business models through capabilities for new streams of revenue, less reliance on legacy models, and ecosystems networks based on platforms. For example, firms that use cloud-based ERP such as Microsoft Dynamics or SAP have better integrated data which allows them to integrate internally and respond externally better. They promote a more dynamic, customizable, scalable and monitorable business model of services.

On top of that, digital performance management platforms such as balanced scorecards (BSCs), KPI dashboards and OKR systems connect strategy and metrics that support implementation in a unified way across the organization. As noted with respect to many of the Nigerian companies undergoing transformation, these tools add transparency and accountability while speeding up decision cycles. In the end, digital platform business develops an agile business operating model that can respond to disruption and market opportunities.

Data-Driven Decision-Making and Strategic Foresight
Perhaps one of the most revolutionary components of the digitalization process is how it concerns decision making. Big data analytics help organizations to go beyond what happened and gives them the ability to predict and prescribe. Organizations are now able to predict customer patterns and actions, simulate financial “what if” scenarios, and allocate resources in the moment (Mayer-Schönberger & Cukier, 2013).
Nigerian firms that have a strategic outlook are collating data from their sales, logistics, customer service departments and outside market intelligence into centralized dashboards. This encourages thinking ahead of the curve and means that leadership teams can hypothesize, fine-tune, and reduce risk based on evidence. These skills become essential in settings where regulations do vary, currency may devalue, or consumer preferences do pivot.

Digital Transformation and Competitive Advantage
Michael Porter presented cost leadership, differentiation, and focus as theories of competitive advantage. Digital transformation enables firms to act on all three. Cloud platforms lower technology costs and provide access to next-gen technology for anyone, which enables efficiency. Analytics-enabled personalization technologies improve the customer experience as a means to differentiation. On the other hand, it has been argued that platform-based business models enable companies to occupy niche markets via rapid innovation.
Westerman et al. (2011) show how companies that have undergone successful digital transformation are 26% more profitable than their industry counterparts. The advantage is not merely digitizing operations but integrating digital transformation into the strategic direction of the business to become a business enabler instead of just a technical enabler.

Challenges and Constraints
Nonetheless, digital transformation poses many challenges. Infrastructural constraints posed by lack of infrastructure particularly in developing economies such as Nigeria can affect effective implementation. The power supply problems, poor internet connection and expensive licenses for enterprise software are still major obstacles. On top of that, transformation is about changing the culture of organizations in a way that most organizations seem ill-equipped to handle – employees resist, are not digitally literate, and there is no change management structure in place to enable these types of projects.

Security is also a major issue. As reliance on cloud and IoT systems grows, cyber risks increase. In this sense, data governance, cyber security and privacy laws compliance like NDPR and GDPR should all be part of strategic planning.

Enablers of Effective Digital Strategy
Strategic enablers must be instilled in order to use digital transformation to its full potential within the firm. Amongst these are combining leadership buy in, functional integration and lifelong skill development of teams. Creating a PMO with defined governance structure enforces consistency in implementation, which is the practice among the top companies in Nigeria.

Using agile practices, with the support of tools such as Jira and Confluence, adds transparency and better team coordination in remote teams. Conducting regular performance reviews and having KPIs at the enterprise level give organizations the ability to be nimble and agile and develop a culture of accountability and innovation. Another important factor is stakeholder alignment; the involvement of internal users and external customers in the process of co-creating digital value is fundamental for success.

Conclusion
Digital transformation is not simply a technology upgrade, but a fundamental rethinking of the ways that businesses create value within a more complex and complicated world. The ones that best capitalize on cloud adoption, IoT, automation, and data analytics will thrive and be relevant and profitable in the long term. For Nigeria and other competitive economies, digitalization has become synonymous with strategy and business success. The true value is in integrating them into nimble, data-centric, proactive businesses, business models that are proactive rather than simply responsive.

Author

Abimbola Mariam Jejeloye
Project Manager
Nigeria

References
Brynjolfsson, E., & McAfee, A. (2014). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W. W. Norton & Company.
https://wwnorton.com/books/9780393239355

Mayer-Schönberger, V., & Cukier, K. (2013). Big Data: A Revolution That Will Transform How We Live, Work, and Think. Houghton Mifflin Harcourt.
https://www.hmhbooks.com/shop/books/Big-Data/9780544002692

Westerman, G., Bonnet, D., & McAfee, A. (2011). Digital Transformation: A Roadmap for Billion-Dollar Organizations. MIT Center for Digital Business.
https://cisr.mit.edu/publication/2011_12_DigitalTransformation_Westerman