What is Digital Transformation?
Lars Gudbrandsson, MBA
CEO | CCO | CMO | Board member | MBA | MA in AI for Business | Former Bonnier, Telia, & Nokia
It is safe to assume that Digital Transformation will be two words, nearly all business leaders will use more than once in 2016. Chances are also, that the vast majority do not know exactly what Digital Transformation is. The first step any company needs to take: Truly understand what that is.
When I am conducting lectures, helping companies or talking with fellow business leaders about digitization, I always ask: “what is Digital Transformation?” Every time I ask 10 persons, I get 11 different answers.
Typically, the answers tend to bias towards the advantages within the person’s role in the organization, such as.
- CMO: customer interaction; a 360-degree customer view, omni-channel view of the consumer; an integrated customer experience across mobile, social media and online platforms.
- CFO: an organisational and employee productivity driver—leveraging automation, digital tools and timeliness of information.
- CHRO: e-learning, online communities, new ways of working, constant connection of employees to the outside world.
- COO: maximum operational efficiency.
- CIO: big data; new data management systems for affordable data from proliferating sources; new data security systems, processes and transparency; and possible substitutes for ERP.
- Sales: reduced selling, delivery and service costs; and faster speed-to-market.
- Customer Service: digital straight-through claim processing, reducing costs and claims ratios.
Given all these different viewpoints on Digital Transformation, I sincerely understand why so many people and business leaders have difficulties understanding exactly what it is.
The truth is; none of these is necessarily correct or incorrect. They are however, some of the benefits and advantages we get from the Digital Transformation. The problem is that such different viewpoints often lead to either 1) the Digital Transformation is not started at all (or postponed), or 2) lack of alignment and common vision about the Digital Transformation, which lead to missed opportunities, poor performance, or false starts.
That is also why the Chief Digital Officer (CDO) role is an important role.
So what is Digital Transformation?
What really drives the Digital Transformation is Technology – or rather the exponential development in technology, such as AI that will enable robotics and self-driving cars, Sensors that can help improve our health, 3D printing that will enable digital manufacturing and streaming of physical products, and so much more.
The exponential development in technology is a paradigm shift in the size of the Industrialization age.
Therefore, whenever someone ask me: “What is Digital Transformation”, my answer is:
“Digital Transformation enables reinvention of internal processes, business models, revenue streams and interaction with customers and partners.”
Once this is established, business leaders must have a clear and common understanding of exactly which exponential technologies that will affect them and, as a result, what it means to their business, so they can develop an execution plan that will address this.
CCO & Partner, Wibroe, Duckert & Partners. Chairman/Founder of Danish Digital Award. M List 2022, 2023, 2024, 2025
5 年Adequate definition. What it is most certainly not, is some kind of time-limited project or "big bet". I sometimes hear people talk about Digital Transformation as in "We've just been through a digital transformation". No, you haven't. It never stops. It'll only accelerate and broaden in scope as AIs will start talking to other AIs and eventually begin building new machines themselves from a more or less supervised design. The big challenge as seen from my chair at Danish Digital Awards is still what you point to (the target operational model) but also "collapsing" or fully integrating the quest between various front- and backoffice-functions so that the cost cutting initiatives in digitizing / automating operations will actually be linked to and a source of funding for the improvements in product/services/experiences that the customers benefit from.?Today, I believe that too many workstreams and digital bets in the line functions are not integrated / coordinated enough to achieve their full potential. I often find this has something to do with the lack of a fleshed out future story / new narrative that works as a stronger, common point of reference for all stakeholders. Here's a model that I hope can serve as inspiration.