What is Digital Transformation?

 

What is it we are really trying to do?

 

 

Introduction

There is a plethora of confusion around Digital Transformation. Looking at the amount of content and information posted in e-mails, newsletters and social media, it is striking how many people and organisations are talking about digital transformation. Surprisingly it seems to be a term that is used in lots of different ways in many applications. So what does it really mean and will it solve everybody’s problems? Martin Jukes provides his perspective on what digital transformation is and how it should be incorporated into an organisations development rather than lead it.

But what does it mean?

For many it is referring to the introduction of new channels of communication for customers to engage with an organisation, for others it will be the use of technology to replace a manual or paper based process and of course there are many variations between the two. There are others who believe that it is wholesale replacement of systems with data rich and efficient ways of working.

My own understanding is utilising technology and process change to improve efficiency and reduce cost for an organisation with improved information sharing, increased automation and greater data collection being some of the benefits. It is not something that only impacts the front office service in relation to customers, it also impacts the back office, the organisation and the enterprise.

Is digital transformation new?

Transformation is not new and neither is the use of technology. If we look back in management terminology we have seen Business Process Re-engineering, Lean Thinking, Systems Thinking, Japanisation and many others. They have all delivered benefits when applied in the right environments. They are not obsolete either but it does appear that Digitalisation has taken over as the terminology of choice. What is different however is that it is a more generic term that can be wider than some of the others mentioned which revolve around methodologies and thought processes.

Why is the phrase digital transformation so popular at the moment?

Well my own opinion is that it is the latest buzzword(s) that are used to create an impression of expertise or being ahead of the game. It is used extensively in marketing terms and in management speak as it can be used as a broad term in many scenario’s, often without real substance. We have used the term transformation for some time and continue to do so as we do not believe that technology should be the real driver of change. We also see that not all transformation is digital: a refurbished premises or a simple process change is not necessarily related to technology but it can still deliver multiple benefits.

The increased use of the word digital is interesting. Many commentators say that we live in a digital world and yes when we look at the world of telecommunications with cloud computing, smartphone apps etc they are correct. We have been transforming service for clients for many years but it is evident that the digital opportunities available support transformation can support increased efficiency, better customer experiences and reduced costs.

Do we need a digital transformation project?

The answer to this question should be considered carefully. There are probably many projects that would involve digital transformation but they should be referenced as business projects. So, for example, providing the ability for customers to pay online will require digital transformation but it is actually about increasing sales or improving income collection. It is important to understand the drivers of the project and be able to identify the changes that will be required to support this new initiative. It is not just about introducing the technology, it is about ensuring that the technology meets the business needs and delivers the benefits.

Maybe it better to have an overarching Digital Transformation programme that ensures synergy across the various business projects and provides coordination and direction. An example here may be in looking at all of the projects that require systems development and determining that it would be more effective to replace rather than develop.

A Digital Strategy needs to be embedded into an organisation where the culture will allow sufficient progress to be made. However this is often the best starting point in trying to establish what a Digital Programme will deliver.

Summary

Digital Transformation is a term used in many different situations. It refers to transformation (or change) that relies upon technology to create improvement. Transformation is not new and neither is the use of technology to generate improvement but the use of the term digital transformation implies the use of digital technology.

It is recommended that transformation projects should be driven by business users who will see the benefits as being an improvement to efficiency, effectiveness or cost. A successful digital transformation should be measured by the successful achievement of those benefits rather than the successful implementation of a new system or technology.