What is Digital Transformation? & Why do I need to embrace it?

October 29, 2015 — 1 Comment

Preface:

Digital (adj) the predominate use of Internet, Mobile & Internet of Things technology platforms to radically improve Customer Engagement, Collaboration & Operational Efficiencies.

Transformation (noun): a thorough or dramatic change in form or appearance; a process by which one function is converted into another that is equivalent in some important respect but is differently expressed or represented.

Body:

Digital Transformation has become the de jour subject to espouse your beliefs on in 2015. As such, I felt obliged to add my voice to this chorus. Hopefully readers will agree once they have read this.

Digital is one of the key Disruption Initiatives being applied by business strategists & enterprise architects to wake-up moribund industries such as Financial Services (Banking & Insurance), Consumer Packaged Goods (CPG), Fast Moving Consumer Goods (FMCG), etc. It promises superior levels of engagement with Consumers (Customers) for a fraction of the cost of conventional (Analog) methods (Print Media, Television Advertising, etc.), amongst other strategic benefits. Considering that many of these particular industry sectors spend 5-7% of their gross revenue on marketing and branding activities it is not hard to see why the disruptive approach of Digital is so compelling & attractive to them.

On a technical level Digital speaks to the leverage of many disparate initiatives in Mobility, Internet, Applications, Security, etc. to create a suite of capabilities all focused on Customer & Collaboration. It allows IT functions to create an integrate delivery stream which they can manage end-to-end.

In spite of deep spending on Digital Transformation endeavors, payback still seems illusive for most. Like most Transformational endeavors, Digital is not immune from the intrinsically high rates of program failure & disappointing strategic outcomes. In most cases this is directly attributable to abysmal (dis-engaged) Leadership by the CEO and Board (who cheerlead, rather than take hands-on accountability) and overall poor execution by Consultants who sell Transformation Methodologies & Services to these same leaders. Given the stakes one should ask, “Why is this?” These are my thoughts on the “Why”.

CEO’s and Boards use Transformation as a strategic tool to move a well-established organization out of its current doldrums and into a leadership position once again. It is a black art for the most part as most of these same people rarely understand how to execute Transformational Change and typically bet the farm (so to speak) on Consultants and hucksters i.e. Thought Leaders, who sell transformation as the “cure to all that ails” with the proviso of “Trust us, we will handle all the details”. The failure rate and associated costs of these failures has become so high (and contentious) that all of the top tier consultancies now require their customers to sign gag orders which forbid them from going public about these debacles, much less requiring private arbitration to resolve all contractual/financial disputes. Given this, most Transformation Programs seem doomed from the start.  Digital Transformation is no different in this regard and yet I firmly believe that it is imperative for all Organizations (Private, Public and Not for Profit) to embrace this paradigm shift. The primary rationale for this is the fact that it forces these same Organizations to abandon their backward-looking, gut-based decision making & customer engagement endeavors in favor of evidence-based & “always on” approaches, key components of a Predictive Enterprise. In my advisory endeavors I have always counseled senior executives & boards to “never waste a crisis” in respect to fostering real (transformational) change in your business model and culture and see the pursuit of Digital as such an opportunity. Without a compelling impetus Organizations’ can barely muster marginal or incremental change successfully.

Digital Transformation can provide a unique opportunity to realize the benefits of becoming a Predictive Enterprise while changing the dynamic between the Organization and its Customers (constituents), Partners & Suppliers. It portends to be the single most dramatic overall change that any established Organization can pursue as it breaks its many ties with the status quo and truly transforms.  The key to success is Leadership from the Top-Down (CEO & Board), an Engaged Culture and embracing Digital Outcomes (data, analytics, etc.) as Core Competencies and not IT functions. Digital Transformation is synonymous with what I have evangelized in The Data Leadership Nexus in this regard.

*-An edited version of this posting first appeared as an article in the March 2015 issue of Information Age (UK)

Trackbacks and Pingbacks:

  1. 2016-2020 Digital Strategy for the UK: What’s Needed (what’s not). « infomgmtexec - February 6, 2016

    […] “What is Digital Transformation and Why do I need to embrace it?” (https://infomgmtexec.me/2015/10/29/what-is-digital-transformation-why-do-i-need-to-embrace-it/) […]

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