What is Digital Transformation?

Everybody talks about Digital Transformation – it’s currently the hottest buzzword in Technology. People who view my profile often ask me what I mean by Digital Transformation and how exactly do I accelerate it. I reply with another buzzword and a tongue-twister: DevOps implementation and legacy application modernization. Well, most of the time the conversation ends shortly after that, politely but quickly. 

Let’s start with what Digital Transformation really is – there is no exact definition, but in general it means: The use of technology to enable a business to create new products and services or to transform their existing business processes and how they deliver value to the customer. 

A good example is a government going paperless for visa applications or an online business shifting their marketing efforts from cold emailing to targeted pay-per-click keyword advertising. I personally help my organization with 2 key strategies to enable Digital Transformation:

1 - Implementation of DevOps  

DevOps is a combination of processes and tools to deliver services faster and ensure they run in a reliable and scalable way. DevOps has great practices like Value Stream Mapping, Infrastructure as a Service, and others. One practice where I see great value is Agile implementation. Agile, e.g. Scrum or Kanban teams, fundamentally changes the way an organization performs and delivers value. Compared to other practices, Agile is already pretty mature, and results are immediately seen right after implementation—mainly due to the regular sprint review meetings that ensure to deliver the right functionality at the right time and get immediate customer feedback on the value delivered.

2 - Legacy application modernization

Typical IT organizations spend about 70-80% of their budget on operations (keeping the existing IT environment running). This leaves only about 20% to deliver new functionality and services. The majority of the 70-80% operations costs are sunk into legacy applications—some organizations have applications running on hardware and operating systems out of support for more than 10 years. This isn’t just a security risk, it consumes a lot of manpower to keep these systems running and often requires people with unique skills: try to find Cobol or Fortran developers on the market, good luck. Modernization of these applications means replacing their functionality with modern solutions, preferably ones running in a Cloud environment. This drastically reduces the operating costs and enables organizations to shift the saved budget and freed resources from operation to innovation areas, e.g., DevOps teams (see point 1).

While DevOps brings IT Development and IT Operations together, Digital Transformation brings Business and IT together. I love when a user approaches me and asks for something without knowing what he really wants. This is my opportunity as an IT guy to show the real value of Technology. It’s the time where business and IT work together—it’s not about telling IT what to do or whose fault something was or who takes which costs, but rather it’s about working on the same goal: making the company successful no matter what it takes. 

Here are 2 examples of organizations that have successfully implemented Digital Transformation:

GE introduced 3D printing for their Leap aircraft engines

Yes, they are using printed parts for an aircraft engine. The real power of 3D printing is taking multiple parts and designing them into one. You can create geometry that you can’t make any other way. You have the ability to test a design, fail quickly, and re-test a new design. What took weeks in the past is now handled in a matter of hours. GE invests billions in digital manufacturing. Main benefits are cost-savings and building out factory and employee capacity to create a wider range of engine components. (Source)

Starbucks enhanced their app with mobile payments

In 2009, Starbucks introduced a mobile app to digitize their rewards program. More than that, they added an e-wallet that gave customers the ability to pay for their coffee via the app. Since it was first introduced, the app has been enhanced to allow users to make pre-orders before entering the store to skip the queue. But what is worth mentioning is that the payment app leads the US mobile payment market in 2018, ahead of Apple Pay and Google Pay. (Source)

This article reflects my personal view on Digital Transformation and is by no means a complete picture. There is much more behind Digital Transformation. DevOps and its processes—and Technology in general—are just ENABLERS for Digital Transformation. The real transformation happens within the actual product management and the collaboration between product manager, designer, and technologist.

And remember: despite all the services that underwent a Digital Transformation, a great human being can still make a difference. A smile *always* enhances a service and delivers value to the customer. 

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