What is digital transformation, really?
These days, it is almost impossible to avoid the chatter around digital transformation (DX). It seems that every firm is in the thick of a DX journey. Every consulting firm and system integrator worth its salt, has well advertised DX offerings and brilliant websites telling anyone that cares to listen, what DX is and why everyone needs it.
Googling the phrase throws up more than 23 million hits in about 0.7 seconds. There are more than 300,000 professionals on LinkedIn who claim to possess some degree of expertise in the area. And depending on who you ask, the Digital Transformation marketplace will at the minimum be, worth a cool 300 Billion USD by 2020.
However, like many other catchphrases, DX says different things to different people. Perspectives vary depending on which part of the proverbial elephant one’s touching. In the last six months, I have had a number of personal experiences that led me to conclude at least some of what’s being passed off as Digital Transformation is neither Digital and most certainly not transformational. I learnt a new term the other day at a Gartner conference – Digital-Washing. The analyst used it to describe tactical efforts involving mobile, social and cloud technologies that are incorrectly identified as DX.
So, what is it, really?
I feel, most experts will now agree that any DX initiative has three pillars (of activities).
– Creating new mechanisms of connecting with the customer by re-inventing customer experience
– Making processes more efficient or possibly completely re-inventing processes
– Establishing new business and operating models, with the customer at the center of everything
There may be different terms and phrases floating around but if they talk about DX accurately, they should be building on the same three concepts above.
The definitions that I have never liked are the ones that involve a laundry list of the enablers (of DX) – namely big data, cloud computing, social media and mobility. Let us not kid ourselves – there’s no DX without the application of some or all of these technologies in some measure but they, in themselves, do not define DX by any means.
There’s a great deal of difference between being ‘Digitised’ and being ‘Digital at the core’. Many companies took to digitisation of processes decades ago. While digitisation of key operational aspects is an important aspect of DX, it is only one of several important things in this context.
The key to DX, I believe, is the acknowledgement that the world has changed and irreversibly. As all things digital have invaded our lives, customers, their journeys with different brands and their ultimate buying behaviors have all changed irrevocably. Succeeding in this new world order needs a new breed of companies that look, feel and operate in very different ways. DX at the end of the day is as essential strategy to make companies stay relevant in the digital age.
I had the opportunity to be part of an Executive Education Program at one of the premier Management institutes of India a few months ago. The Lead instructor made a passionate case for DX across different industries using SMAC (Social, Mobile, Analytics and Cloud). However, he did not once mention the word Customer or Consumer. His view was entirely IT led. His class, consisting mostly of fairly senior folks, could not really figure out why moving a data center to the cloud would amount to DX. Taking nothing away from the instructor, cloud enablement may be a key step in a DX journey but without a customer context the overall effort loses meaning.
DX has to start with the re-imagination of the customer journeys. For a brand there’s no other way of achieving this than through the application of a number of ‘digital’ technologies, because that’s the world the customer operates in, today. It is as simple as that. The rest of the keywords like SMAC are all enablers of those re-imagined journeys. It is perfectly conceivable that one of more of those words will be replaced by some other ‘hot’ technologies in the days ahead. The need to re-imagine the customer journeys to stay relevant in their world will likely be around for long, long time to come.
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