Digital transformation is the buzzword of the decade. Almost every single established organisation, regardless of sectors or industries, is going through a transformation or digitalisation journey. Though the starting point varies from one organisation to another, the end goals are more or less the same: to become agile, innovative, customer centric, data driven, operationally efficient - well, you can keep on throwing buzzwords here. The question is - how do you get there?
Before talking about "how", let's try to form a common understanding of the "what". According to The Enterprisers Project, digital transformation is "the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers". I love this definition, it is concise and precise.
Business
Essentially, transformation is about changing the way how business is done. The formula can be as complex as how McKinsey wants it to be, but typically boils down to three main factors: customer experience, operational processes and business models.
Transforming customer experience starts with understanding the customers in-depth: who they are, where they are and what they want. Then you can start to remap the customer journeys, redesign the customer touch points and probably come up with an "omni-channel" strategy.
The change of operational processes is centred around efficiency and productivity. By automating administrative processes, your software engineers and sales representatives are enabled to focus on what they were hired for. Moreover, simply shifting collaboration and decision-making from meeting rooms to online workplaces has profound cost-saving effects.
Business model transformation starts with revisiting the value propositions of your core business, which might well be outdated by the way if you're a legacy company, and continues all the way to reinventing how you create, deliver and capture values. A good example is Microsoft's endeavour to shift from selling software licenses to providing software as a service.
What's the role of technology?
So, apparently the business is at the heart of the digital transformation. However, none of the aforementioned business objectives can be achieved without technology. For example, the prerequisite of customer understanding is being able to identify each individual user of your products and services and gather as much relevant information about him or her as possible. In this case, a digital identity solution is needed to recognise and profile users; a consent management tool is required to handle personal data in a manner that is compliant with privacy regulations.
For a well-established (also known as a legacy) company, the combination of modern enterprise architecture and cloud-based infrastructure seems to be a classic combo to enable as well as to accelerate the transformation journey. What's equally, if not more important is that an adequate level of engineering competency should reside in the house to ensure agility and flexibility when it comes to adopting new technologies as well as developing new products and services.
One more thing...
With a good comprehension of business objectives and technology enablement, you're now itching to formulate your transformation strategy. But hold on a second. There's one more thing you need to think through before settling your blueprint for this typically long and tough journey.
Although technology plays an enabling role in driving digital transformation, it are the people who collectively execute and implement the changes. Essentially, transformation is a shared responsibility that falls to every individual in the organisation across different staff functions and business units. Everyone is part of the change and needs to act as a "change maker".
Obviously, organisational commitment is a crucial success factor in the transformational journey. However, such commitment is not given. It's not easily obtained by top-down communications about the digital vision and strategy neither. People's commitment stems from the organisational culture - a culture that embraces changes, advocates collaboration and persists towards a common goal. A culture shift is probably the most crucial, yet challenging part of the digital transformation.
Digital is a mindset
The digital transformation is indeed a triple play of business, technology and culture. While business defines the goals and technology acts as an enabler, it is the culture that sets the stage for the change to take place. Aaron Dignan, founder of The Ready and an expert on organisation development, is quoted as saying: "Digital isn't software. It's a mindset." I'd like to conclude by adapting it to the context of this blog: "The digital transformation isn't changing business models or adopting new technologies. It's shifting the organisation culture and people's mindset."
Our Alumnus Xiaopeng Li - more about me here
[originally posted on the Master School website]
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