Throughout the many meetings and conversations we have had with different organizations about their digital transformation efforts, the conversations were mostly dominated by what technology or systems the business should use. As a result of that focus on the technology as the ultimate cure, we have seen many organizations fail to even kickstart their digital transformation journey. If digital transformation was only about technology and systems then it would probably be called Systems Upgrades, which is what organizations have done for decades.
So what is Digital Transformation about?
If you search the web for Digital Transformation you will no doubt find, what may seem, many definitions from different sources, but if you take a closer look at them then you will find a common thread. Here’s one from The Enterprisers Project:
“Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.”
Here’s a more elaborate one from a Harvard Business Review article, “Why So Many High-Profile Digital Transformations Fail”, by Thomas H Davenport and George Westerman :
“..digital is not just a thing that you can you can buy and plug into the organization. It is multi-faceted and diffuse, and doesn’t just involve technology. Digital transformation is an ongoing process of changing the way you do business. It requires foundational investments in skills, projects, infrastructure, and, often, in cleaning up IT systems. It requires mixing people, machines, and business processes, with all of the messiness that entails.”
So we can establish a few foundational aspects of what digital transformation is:
1- It is a mix of people, technology, and business processes
2- It is not a project, it is an “ongoing process” of challenging the status quo and changing the way you do business
3- It is messy and requires certain tolerance for risks and failures
For a digital transformation journey to be proper and survive, it needs to be sponsored from the top by the different divisions heads. Unfortunately what happens most of the time is that it gets “assigned” to IT where it becomes an “IT project” instead of a business initiative.
Why is it that a lot of businesses focus mainly on technology?
Digital transformation usually falls within the realm of IT so naturally the IT team would focus on technology and systems with minimum to no consideration to business processes and internal culture. Also, technology lies at the heart of digital transformation and, from experience, it gets all the attention because it is the “cool” part of the journey and, at least on the surface, it looks easy to implement. In other words, a lot of businesses simply follow the buzz words that are trending at the moment as they don’t want to be seen behind on current trends.
That is why you see a lot of communication from businesses about what new cool technology they implemented and all the publicity they are getting. What you don’t hear is whether they actually improved their internal processes to match the new technology or more importantly whether they elevated their staff to match the technology. It is very easy to identify those gaps and all one has to do is walk into one of the stores and ask the staff about that new AI system they just implemented or the new virtual assistant that is getting all the buzz and how you, the customer, would benefit from all that, and what you would probably get is a puzzled look and an embarrassed staff.
Technology is the “cool” part of the digital transformation journey because, for the most part, it is what the outside world see (especially customers) and talk about. It is all around us from the cool world of AI, robotics, automation, machine learning, product recommendation, blockchain, virtual reality, virtual concierge etc. Customers do not talk about the culture or the processes of the businesses they interact with, those are only mentioned in business articles and academia. However, what customers “do” remember and talk about the most is the customer service and this is what a lot of businesses tend to forget and when the promised sales numbers do not materialize the first thing to be blamed is the system and IT along with it.
On the surface, technology looks easy to implement as the organization can simply turn to the company that provides the technology and rely on them for implementation with the help of consultants. However, changing the internal culture and processes can only be done from within and it is a painful endeavor. I mentioned that on the surface, technology is the easiest part of the digital transformation because that is only an illusion and sooner or later the organization will realize that digital is not a thing that you can plug into the organization and expect magic to happen. Most organizations avoid dealing with the messiness that comes with mixing technology, people, and processes and would rather focus on the technology as in the end they can simply blame the system for not taking them to the promised land.
Legacy systems bring with them legacy processes and legacy people
You cannot transform one and leave the others behind. Time and time again, we see organizations charging one team of “transforming” the business by enforcing systems and technologies on everyone within the organization and without any proper understanding of the existing business challenges and without involving the people who are supposedly expected to not only adopt the new technology but also ensure its success.
Transformation is not a sudden thing, it is not a one time project that you can assign to a team with an end date. Transformation is gradual and continual but that doesn’t mean businesses have to wait a long time to start reaping the benefits of digital transformation. By aligning everyone on what digital transformation means to the organization, by empowering the separate divisions to identify the best ways for them to embark on that journey while meeting the overall objective of the organization, and then by breaking down that journey into measurable and realistic tracks that people can learn from and adjust to, then each one of of those tracks can deliver immediate results.
This allows the organization to be cost efficient because it invests incrementally in steps rather than throwing one big investment into everything and hope for the best, it gives them room to adjust as there will be failures and learnings, and most importantly it allows their people to evolve.
The urgency of digital transformation in the era of COVID-19
It is more critical for businesses now to adopt this agile approach towards digital transformation as the COVID-19 epidemic is forcing them to accelerate their digital transformation journey which might look like a good idea at the start but if not executed properly they might find themselves in a lot worse situation from when they started. We are already seeing many businesses rushing to setup E-Commerce without the proper understanding of what it takes to do that (it is not only about selling products online) and without the proper execution. It is understandable that businesses would want to expand their sales channels but it is also important that in these tough times, the business is not wasting precious money, time, and resources on something that might not deliver the expected results.
As a business you need to:
- Define your challenges and objectives
- Prioritize your needs and the needs of your customers
- Identify what you need to overcome those challenges and achieve your objectives (maybe what you have can help you achieve that with minor modification)
- Most importantly involve your staff as you will need their commitment and ideas to get to where you want to be
Like everything else in life, a solid foundation is a recipe for success in the future. No matter what the next emerging technology is, with the right foundation that is designed and built to connect to those modern technologies, organizations would be on the right path for a successful digital transformation.