What is Digital Transformation?

It is a commonly used buzzword that sounds cool but what exactly does it mean?

?I am going to dwell upon that in this article.

?My name is P K Saxena.

?I am the CTO of Sofcon Systems India Pvt. Ltd.

?Sofcon Systems India is an Automation Solution provider company that helps clients go through their Digital Transformation journeys.

When I first came across the term Digital Transformation few years ago I did not appreciate the term.

?It didn't make sense to me.

?I am an Electrical Engineer and so when I heard the term,??I always thought it is something to do with Electronics.

?But nevertheless Digital Transformation has become a big buzzword.

?It is a commonly used term these days.

?Quite frankly, it is overused.

?So what I want to do today is to describe about what exactly is Digital Transformation and most importantly what does it mean to you and to your organization?

?Simple definition of Digital Transformation

?In its simplest terms, Digital Transformation is the use of any sort of technology that helps improve your business and that can be Enterprise Resource Planning software or ERP systems.

It can be Customer Relationship Management or CRM software to render help to manage your sales force.

It can be Financial Accounting software.

It can be Automation Technology for your shop floor if you are working in a manufacturing organization.

It can be Robotics.

It can be The Internet of Things.

It can be Blockchain.

It can be Artificial Intelligence.

I know I am throwing bunch of buzzwords and a bunch of technologies that you may or may not understand but the key point here is that Digital Transformation is any sort of technology that enables your business and allows you to be more productive, more efficient and more effective.

History of Digital Transformation

I do not have an exact details of when use of Digital Transformation began in the Industrial world.

We have seen a very organic evolution of technology as well as its use in businesses and organizations but really you can trace a lot of this back to the 80s and 90s when businesses were first starting to use spreadsheets and word processors and other types of rudimentary technology that is very basic today.

And over the years, what ended up happening particularly in the 90s, there is a big revolution of Enterprise Software that went beyond spreadsheets and word processing that allowed companies to track orders and to track information and financials as well as to track sales information and it really evolved into what is now known as ERP.

It started off as Material Resource Planning in many cases for manufacturing organizations that were just trying to track their inventory and their Manufacturing Operations which then evolved into Enterprise Resource Planning or ERP.

At the same time, a lot of organizations were starting to implement more robust Accounting and Financial Software so back in the 80s and 90s is where you can really trace that evolution of Digital Transformation began.

In my opinion, what has happened in the 2010s is that a lot of new technologies have exploded in the Industrial world.

A lot of technologies, like Blockchain and Artificial Intelligence, Predictive Analytics and Internet of Things - a lot of things you may have heard of -a lot of things you may not have heard of- but these are few revolutionary technologies that allow businesses to operate in a better way and to operate more effectively so the term Digital Transformation has become sort of buzzword for a lot of these technologies and hence it can be said that there is no one definition of what Digital Transformation means to any given organization.

For some, it could be just implementing an ERP system; for others it could be implementing a Financial System; for others it could be implementing Robotics on the shop floor.

Whatever may be the case, it is a matter of defining what Digital Transformation is to you but before I do that it is helpful to look at that history of how Digital Transformation came to be.

Digital Transformation = Business Transformation

Now I am going to reveal a little secret which I learnt from Eric Kimberling, CEO of Third Stage Consulting Group and that is the Digital Transformation really does not have a lot to do with the Digital part of the term but it has a lot more to do with Transformation - the second word in the term and even though technology is a driver of some of these Digital Transformations, it is really at the end of the day more of a Business Transformation that organizations are trying to accomplish.

Generally, they are trying to improve their efficiency.

They are trying to provide a better customer experience to their customers.

They are trying to be more effective as an organization.

They are trying to make the jobs easier for their employees.

So really it is driven by the business needs and it just so happens that technology is one way to enable those changes and so the key word here is transformation that is the operative word within Digital Transformation and in fact I would argue that we can just scratch digital altogether and call it a Business Transformation.

Digital is likely to be a big part of that Business Transformation but there is a lot more to it than just the technology itself.

There is also the Process improvements, the Process management, the Process Re-engineering that needs to happen and there is also the Organizational change or the People side of the equation that is going to change so this is the main reason why Business Transformation is probably a more descriptive term in defining what exactly Digital Transformation is.

It is more of a Business Transformation – to render help improve the business or the organization that you are working in.

Why Digital Transformation fails?

Despite all the new great technologies out there, a lot of Digital Transformations fail, in fact more Digital Transformations fail than succeed and it is not because the technology is not there.

It is not because the technology cannot do certain things.

It is not that we have not made advancements in technology over the last few decades but it is because we have not addressed those Business Transformation side of things.

When we neglect the Business Process and the Organizational or People side of things, we are neglecting the entire Digital Transformation and no matter what great the technology is if we have not addressed people and processes as well and in fact if we have not addressed people and processes even better than we have invested in the technology, our likelihood of failure is very high so Digital Transformations have a high failure rate.

These failures are very painful for a lot of organizations and for those organizations that do not have a lot of experience with it.

It can be overwhelming and they are not always sure what to do, so it is very important to recognize that Digital Transformations are only going to succeed when you invest heavily in the people and process side of things to correspond with the investments in technology.

Key Take Aways

So Digital Transformation is a big buzzword today.

It probably will be for the next few years.

Later on, at some point, it may be replaced by something newer and better or something that sounds cooler than Digital Transformation but for the time being the definition of Digital Transformation is as given below.

“Digital Transformation is more of a Business Transformation –in short to render help to improve the business or the organization that you are working in.”

This is the landscape that we are dealing with at present and I encourage you to learn more about “What Digital Transformation means and how organizations can best benefit from and some of the risks that they struggle with”- in my next article.

I hope you found this article useful.

Please provide any comments, if you have.

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Resource: Eric Kimberling-Digital Transformation / Third ??????????????? Stage Consulting Group / www.thirdstage-consulting.com??