The Meaning of Digital Transformation

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    In an era of accelerating innovation and disruption, companies are facing digital Darwinism, the evolution of technology and society. Organizations around the world must now content with the digital transformation of everything. Yet, most companies to date are investing in digital transformation to modernize facets of the company. The reality is however, that digital transformation is at its most effectual when it is purposeful, methodical and managed across all aspects of business. In my research over the years, I’ve found that consistently CX and EX initiatives are compelling catalysts for uniting cross-functional teams and efforts across the enterprise. If you’re leading “the digital transformation of…” somewhere in your organization today, know that at some point, your work will either clash or combine with other disparate endeavors. This is a natural part of what I found as “The 6 Stages of Digital Transformation.”

    This is probably a good time to introduce a bigger, more universal definition for “digital transformation” so that we can all work together toward more meaningful outcomes.

    It’s only part technology.

    As part of my research, I identified a pattern in how more progressive companies were thinking about their work. It lead to what I hope is a definition that helps you bring stakeholders (and the board) to the table.

    The definition of digital transformation is the realignment of, or new investment in, technology, business models, and processes to drive new value for customers and employees and more effectively compete in an ever-changing digital economy.

    It’s evolved over the years with my work. This incarnation was introduced in 2013/14 to specifically break focus away from IT/tech. It’s bigger than that.

     

    Early in its rise though the hype cycle, digital transformation was largely technology-centric with a majority of its audience consisting of CIOs, IT (information technology) professionals, vendors, integrators and consultants. While this is still the case, I noticed in my early research, that digital transformation was more than “digital.” It was also about change and change management.

    One of the most interesting findings across every report was that digital transformation was part technology but also part human. In my inaugural report, I closed with the observation that while the modernization of technology systems often steals the spotlight, digital transformation is really a human story.

    Why?

    Not everyone in the C-Suite, the board or influential shareholders and stakeholders agree on their view of market behaviors, trends and what lies ahead. They’re disconnected from customers (and employees) by design. They manage business at scale and are measured by their ability to increase margins, efficiencies, markets, profits, shareholder return, etc. Digital transformation for many organizations is viewed as a cost center. It’s almost a bit counter-intuitive in a way. Without incurring costs to compete for the future you cannot compete for the future. This is why I believe that any investment in competing in a digital economy, to improve customer and employee engagement, and reach customers you’d otherwise miss, is just that…an investment. No risk, no reward.

     

    The truth is that I find time and time again, those successfully leading digital transformation are seeking answers and insights to give technology and business operations a meaningful purpose. Quickly escalating to the front line along with CIOs and IT, customer experience (CX) professionals, including CMOs, are designing digital transformation strategies around evolving connected customers. Everything from touch points to journeys to processes and philosophies to front and back-end systems, digital transformation is taking shape driven by human interests. Executives often ask a simple question to get started, “what would my digital customer (or employee) do and how is it complementary or different to the customers we are investing in today?”

    From there, the answers lead to insights that help decision-makers see people differently and in turn, give cause and justification for doing new things that unlock new value.

     

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