Digital transformation

If you keep anything out of this blog post, then it should be the below two bullet points:

• Digitisation: Converting a pre-existing process or activity into an electronic format with the aim of achieving cost efficiencies.
• Digitalisation: Establishing a brand-new digital enterprise capable of competing with major industry players such as Amazon or Netflix, resulting in the generation of additional revenue streams. While digitisation can be relatively straightforward, achieving success in digitalisation demands meticulous attention to experience design, especially if the intention is to command premium prices.

Digital transformation initiatives frequently exhibit a sense of urgency, driven by arbitrary deadlines. Unfortunately, this haste often leads to a disregard for customer experience, as the primary focus becomes being the first to reach the digital finish line.

However, it's important to recognise that there is no definitive endpoint in digital transformation. Digitalisation is an ongoing process that continually evolves.

Neglecting the customer may result in short-term productivity gains, but it also disconnects them from the loop, causing them to lose interest in the products or services being offered. Consequently, revenue streams decline rapidly, often faster than anticipated, as exemplified by the experiences of Facebook (Meta nowadays ??).

Remarkably, even today, many transformation efforts prioritise technology over user experience, neglecting the crucial role of the customer. While this might not be groundbreaking news, it underscores the persistent issue of prioritising technology over the holistic user experience.

What is Digitisation?

Digitisation involves the process of transforming physical objects into digital representations. One common example is scanning a paper document and saving it as a digital file, such as a PDF. Essentially, digitisation converts non-digital items into digital artefacts, allowing computer systems to utilise them for various purposes. It involves the conversion of data, documents, images, audio, video, and other forms of information into a digital format that can be stored, accessed, and manipulated using computers or electronic devices.

On the other hand, an API (Application Programming Interface) does not perform digitisation itself. However, it serves as a means of integrating two computer systems, minimising disruptions in data flow.

For instance, consider a scenario where a user inputs personal information through a mobile app. The mobile app transmits this data to an API, which then transfers the information to a backend system or database. Consequently, the data becomes accessible to other computer systems and can be utilised for diverse use cases.

Digitisation has had a significant impact on various sectors, including libraries, archives, museums, healthcare, education, entertainment, and business. It has revolutionised how information is created, stored, shared, and consumed, leading to increased efficiency, accessibility, and innovation in many aspects of our lives.

What is Digitalisation?

Digitalisation involves leveraging digital technologies, such as APIs, and utilising digitised data to enable, enhance, or transform business processes. It assumes the prior step of digitisation, as described earlier.

For instance, let's consider the onboarding process of a new employee in a company. Traditionally, when a new employee is hired and requires a mobile phone with a subscription, various manual steps are involved. The employee writes an email to the fleet manager, who then sends an email to the telecommunication company (telco) to order the required items. The telco's customer agent manually enters the information from the email into their system, initiating the order fulfilment process. After a few days, the fleet manager receives the phone and subscription, but the SIM card is missing. The fleet manager waits until the SIM card arrives before sending everything to the employee. This entire process takes approximately two weeks, delaying the employee's ability to communicate effectively.

Now, let's explore the digitalised approach to employee onboarding. When HR hires a new employee, an HR process is triggered automatically. As part of this digitalised process, the company utilises an API offered by the telco to order the mobile phone, subscription, and SIM card. Integration of the telco's API into the HR onboarding process allows for automated ordering. The telco receives the order request and initiates the order fulfilment process promptly. The telco then sends all the necessary items, including the phone, subscription, and SIM card, directly to the employee's workplace address. As a result, the employee receives a fully functioning mobile phone right from their first day of work.

By leveraging the telco's API and integrating it into the HR onboarding process, the company achieves the goal of digitalising the employee onboarding experience, streamlining the process and providing immediate access to essential communication tools.

What is Digital Transformation?

Digital transformation involves a significant and fundamental overhaul of business activities, capabilities, and models in order to effectively harness the potential benefits offered by digital technologies.

Key elements and characteristics of digital transformation include:

1. Customer experience: Focusing on delivering exceptional customer experiences by leveraging digital channels, personalisation, real-time engagement, and data-driven insights.
2. Data-driven decision making: Harnessing the power of data and analytics to gain valuable insights, improve decision making, and identify new business opportunities.
3. Automation and efficiency: Streamlining and automating processes through the use of technologies like artificial intelligence, robotic process automation, and machine learning to improve efficiency, reduce costs, and eliminate manual tasks.
4. Agile and flexible operations: Embracing agile methodologies and flexible operational structures to respond quickly to changing market dynamics, customer demands, and technological advancements.
5. Innovation and collaboration: Encouraging a culture of innovation and collaboration within the organisation, promoting experimentation, and fostering partnerships with startups, technology providers, and other industry players.
6. Digital workforce: Equipping employees with digital skills and providing them with the tools and technologies they need to work effectively in a digital environment.

For instance, consider a company that possesses a vast amount of personal information about numerous customers. In the business landscape, there are other companies, such as insurance firms, that require verification of personal details to conduct their operations. Leveraging the customer information at its disposal, the company develops an identity verification product that can be utilised by other businesses seeking to authenticate an individual's information. Given the company's extensive database of customer information, it becomes highly probable that other companies will adopt and utilise this identity verification product.

Who leads Digital Transformation?

While it is accurate to consider digital transformation as an executive-level initiative in terms of company alignment and resource allocation, its actual implementation occurs at the product level.

Once the product organization has established its own Product Vision and Product Strategy (you can find detailed guidance on how to do that here and here), executive leadership must provide support by leveraging company-level capabilities and resources. In the case of larger enterprises, the CEO plays a pivotal role in driving digital transformation by:

1. Facilitating alignment across various product visions within the organization.
2. Providing the necessary resources and support to reinforce the product visions at a company-wide level.

Enterprises and startups possess inherent differences, yet we tend to approach them similarly when it comes to adapting to changing environments. In the initial year or two of a company's existence, it is common for the CEO to hold the original product vision and lead the day-to-day product discussions.

However, a problem arises when this arrangement persists long after the company has gained traction. As the years pass, the CEO becomes detached from the intricate details and their involvement in these operational matters becomes less productive. It is crucial for the company, with the support of the CEO, to shift its focus towards the product level in order to drive effective transformation efforts.

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