Dean's Corner: What exactly is digital transformation?

“What do you mean by ‘digital transformation’ and ‘convergence’ and how does it affect D’Amore-McKim?” I get this question a lot from members of the D’Amore-McKim and Northeastern community. It’s something I’m very passionate about, so I feel compelled to define, explain, and connect the concept to the larger D’Amore-McKim strategy in the following post. 

Digital transformation is both a mindset and a strategy. It’s a company-wide and customer-focused approach that relies on the implementation of digital technologies to execute current opportunities and create new options that create, deliver and sustain unparalleled value. 

Breakthrough technologies have enabled immense advances and rapidly transformed society through low-cost computing, enhanced mobility, widespread connectivity, and affordable storage (just to name a few). They are continually changing how individuals live, work, and learn, which has diffused them more rapidly than any innovation in our history; many of these breakthroughs, which I talk about in more detail below, have reached a mind-boggling 50 percent of the developing world in only two decades! Can you even imagine living through the COVID-19 pandemic without the major digital innovations of the past few decades? 

Digital technologies – through efficiency gains, enhanced effectiveness, and broader access to distant customer segments – present companies with both new ways to solve old challenges and brand new opportunities. The post COVID-19 world is also likely to see new patterns of work. It is crystal clear that business transformation through digital technologies is the future for organizations that aspire to thrive in the future. 

The Evolution of Digital Transformation

Digital transformation incorporates a digital-first mindset. Therefore, an understanding of the evolution of analog-to-digital transition over the years is important in order to truly understand the possibilities of digital transformation.

The first big shift involved the creation and democratization of digital information. The introduction of personal computers (PCs) in the 1980s accelerated the decentralization of computing from company-wide mainframe computers to desktop devices. PCs enabled both digitization (i.e. converting paper-based processes to digital information) and digitalization (i.e. using information from digitized assets to make work processes more efficient). It is important to remember that both digitization and digitalization are fundamentally about technology. Software specifically developed for the PCs helped drive personal productivity and household adoption, which consequently democratized computing. PCs coupled with the World Wide Web enabled newer forms of digital interaction – including email, chat, and social media channels – creating possibilities for both enterprises and citizens. 

The second big shift involved mobility. While the creation and development of the Internet allowed for almost instantaneous information mobility, cell phones and mobile devices enabled human mobility as well. We’re not tethered to a specific spot in our homes or offices. The connectivity to the Internet implies that we’re always digitally connected wherever we are. We work, talk, text, chat, listen to audio, and access videos on our mobile devices anytime, anywhere. With the Internet of Things (IoT), wherein all our appliances and machines can now be connected to the Internet, sensors collect, send, and receive data, which allows for swift decision making by humans and machines. As a result of all these advances, businesses now collect massive quantities of data, both structured and unstructured, at unprecedented rates that were otherwise not possible in previous generations. More importantly, the nature of interactions among companies, employees, and customers is continually changing – as do our interactions within our personal lives – creating enormous possibilities for organizations. 

The next big shift is the convergence and seamless integration of the physical and digital worlds. With the advent of 5G technologies, we’re now firmly entrenched in the digital age. Tesla’s over-the-air software updates change the actual performance of their physical cars. With COVID-19, we have been having virtual happy hours with friends and family. Our work interactions now involve inviting our work colleagues into our homes virtually on a daily basis. Hybrid learning (the combination of simultaneous face-to-face instruction coupled with synchronous education for virtual audiences) has become essential during this pandemic and will impact the way we think about learning and teaching for years to come.

The Future of Work is Here 

The order of the day for successful companies is to seamlessly integrate the digital and physical worlds. For instance, Walmart and Walmart.com reflect one singular entity to customers, but this physical/digital integration is not easy because competing in these different worlds requires different capabilities. The stories of Blockbuster, Polaroid, and countless brick-and-mortar retailers show the difficulty of integrating these disparate worlds successfully. A company that learns to navigate and integrate this divide by utilizing digital tools will reap rich dividends.

There are immense opportunities for companies to digitally transform their businesses. Companies should think critically and derive their business objectives based on the value that they intend to deliver to their customers. Then they can develop workforce talent with the proper skills and align them to their new business goals in order for the effort to succeed. More importantly, digital-savvy leaders will need to keep an eye out for current practices and be prepared to upgrade the organization’s “hard wiring,” if need be. Digital transformation efforts should also be thoughtfully designed to be inclusive and foster social equity outcomes. 

In practice, companies must embrace these five characteristics to succeed in their digital transformation efforts:

• Start with People – It’s about building skills that enable employee talent to succeed and empowering them to work in new ways that deliver outstanding value. Organizations that combine human empathy with digital transformation skills will be hugely successful.
• Company-Wide – It’s not restricted to individual departments; leaders throughout the company must examine all aspects of a business and derive appropriate business models to thrive in the future.
• The Old and the New – Executing better in current markets is certainly one aspect, but it’s also about the art of new possibilities. 
• Digital Technologies – It’s about utilization of digital resources that will adapt/build capabilities.
• Cultural Change – It’s about requiring the whole organization to become a learning organization.

In summary, the need for the hour for D’Amore-McKim is to develop the talent for this new world of digital transformation and convergence. The business students of today should be conversant in both digital and business skills to be impactful from day one. Organizations also need guidance to imagine the possibilities that can be provided, which can be done through our use-inspired research. We also have exciting opportunities to up-skill and re-skill employees in these organizations. With our exceptional experiential learning legacy, our world-class faculty who have digital transformation expertise, and our strong humanics-infused curriculum with technology, data and human-centered literacies, our school is well positioned to develop students and leaders for this brave new world of work.