5 Things You Might Not Know About Digital Transformation
By Diana Tullio, Principal, CC&C Americas
Ask your friends, colleagues, and business leaders to define digital transformation. You will get different and sometimes conflicting definitions of what it is. The fact is that digital transformation means different things to different organizations. It depends on the needed and desired outcomes, the industry, the competition, the existing culture of the organization, and a lot of other factors.
The key to starting the journey is understanding where the organization is headed as a business in all facets. Not specifically in ROI terms, but as guide rails for the future strategies and tactics to be followed for strategy, people, process, and, ultimately, technology.
Every article published and even Wikipedia, takes a stab at defining digital transformation. The definitions are all over the place, but, i-SCOOP published a fantastic online guide to digital transformation in 2018 that gives one of the better explanations:
“Digital transformation is the profound transformation of business and organizational activities, processes, competencies and models to fully leverage the changes and opportunities of a mix of digital technologies and their accelerating impact across society in a strategic and prioritized way, with present and future shifts in mind.”
With this definition as a backdrop, here are five things you might not know about digital transformation:
It is more about business outcomes than technology
While it is true that technology is cited as a key component of digital transformation initiatives, it is in support of key outcomes that an organization needs or wants to achieve. In an article published by ZDNet, author Mark Samuels states, “Business transformation is accelerated by and built upon digital technologies.” Whether the outcome is a great customer experience, efficient operations, profitable growth, being the most trusted and secure partner, or other admirable and differentiating traits, the focus is on the objective not the technology.
Digital transformation is dependent on the right mix of culture and people
Organizations taking on this type of change should be committing to a different way of thinking and acting entirely. The same tried and true talent, processes, and policies used traditionally will not get the job done. In fact, the status quo may frustrate and aggravate an organization. At the very least, keeping things the same and expecting digital transformation to emerge will lead to disillusionment.
The trend towards skepticism has already been noticed. Gartner reports that digital transformation is heading into “the trough of disillusionment” in their Hype Cycle continuum. This could be due to heightened expectations of tangible, near-term results that don’t materialize on schedule or simply mis-information, but it may also be a myopic view of digital transformation as another technology approach rather than the holistic change that it truly is.
In an article by Peter Yates titled Who’s Leading Your Digital Transformation? Job Titles vs. Characteristics, he impresses on the importance of cross-functional empowerment, change of mindset towards agile thinking, and retaining and growing the right mix of talent. This may be harder than it seems, since the changes in responsibilities associated with this type of transformation and the supporting technologies has and continues to change rapidly. Forbes states that 76% of 505 executives surveyed indicated that a lack of available skills is negatively impacting their digital transformation efforts.
It will take creativity in the way that companies address their transformation efforts to get the right culture and talent. There is a growing trend towards expanding the organizational ecosystem to include external and targeted resources aligned to the vision at hand to overcome these challenges. In Five Pillars of Digital Transformation: Skills and Talent Management, SAP provides great insight into getting the culture and talent mix right.
Digital Transformation is not a project
Everyone has heard the phrase, “It’s a marathon and not a sprint.” This is true of digital transformation. It is common to see technology concepts mentioned in the same breath reinforcing the confusion. Technologies like big data analytics, machine learning, cloud, and the internet of things. However, digital transformation is not a project or even a program to implement these technologies. Projects will inevitably result as part of the effort, but, without a clear understanding of the business outcomes, the vision for the change, and a different way of thinking and acting with regards to the transformation needed, a technology project is a wasted investment. In Mark Samuels’ article, when answering the question regarding when digital transformation ends, he states, “It doesn’t.”
It does not mean starting from a “clean” technology plate
Wouldn’t it be nice to start a transformation journey with a green field from a technology perspective? Suffice it to say, most organizations do not have this luxury. There are legacy solutions in place with most firms. Solutions that perform critical functions within the operations. Doesn’t digital transformation give permission to start over from scratch? Oh, if it were only that easy, but no.
The question becomes how to incorporate what is needed from legacy solutions with the new technologies and how to achieve the business outcomes required from both. The right integration and encapsulation strategies can make leveraging existing legacy solutions a win rather than a burden extending the need for some of the existing technical talent, leveraging institutionalized operations, and allowing for targeted investment rather than “ripping and replacing” everything.
Digital transformation does not guarantee success
There are no silver bullets in transformation as we all know. So why then are expectations so high for digital transformation? Perhaps it is the myth of the killer app or the iconic examples like Amazon, Uber, and Apple that make it look straightforward and so lucrative.
However, what we don’t think about is the experimentation and failure in a safe environment that is key to digital transformation. Yet another cultural attribute that must be ingrained in the organization. It takes experimentation and learning from failure to find the successes and then to improve upon them. In an article by The Enterprisers Project titled What is digital transformation, the authors emphasize the need for experimentation and “getting comfortable with failure” and quote wise advice from the former CIO of FCC who believes in deliverables that take six month or less as saying, “You need to have stopgaps along the way so that you can reevaluate and pivot if you need to.”
In the digital age of ‘overnight’ success stories such as Facebook, the hard slog is easily overlooked. – James Dyson
Digital transformation is not just a buzz phrase albeit frequently misunderstood. In our ever-changing economical, sociological, and technological landscapes, there is a lot of appeal in the intent behind digital transformation if adopters consider the broader holistic change it represents. We cannot abandon the businesses we have and start over. What we can do though is adopt new approaches to business strategy outcomes, organizational culture and talent, and processes that incorporate factors for continuous business transformation supported by digital enablement.
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