What is Digital Transformation?

Transformation, in the age of digital

Digital transformation, as a phrase, can at once be very meaningful and equally super ambiguous. Often examples help best, and I share here one I came upon recently. Early last year, the US infant formula market faced an unprecedented crisis - one of the main providers had to shutter down its plant for over 6 months - creating a huge shortage of formula for American babies. One of the other companies in this space, Reckitt Nutrition had to step in – and step up – ramping manufacturing shipments up by 40%, inverting their supply chain, rewiring data foundations for the needed business insights – all in weeks not months – whilst building consumer confidence, managing crisis communications and working with the government and regulators.

A digital transformation, defined

I spoke with their CIO, Rama Donepudi , who led the charge on what it took to digitally transform during the crisis. In looking back, it feels like there were three major thrusts. First, on the manufacturing, supply chain and distribution front, Reckitt inverted from exporting from the US to importing infant formula from its factories in Singapore and Mexico. To enable this entire ERP and SCM systems had to be reconfigured, distribution systems had to reprioritize shipments across channels and geographic locations, and product allocations had to flex on new demand and availability criteria.? All this meant agile and nimble technology changes, an unwavering focus on quality, and a cloud-first orientation for integration and deployment.

Second, on the data, analytics and insights front, the power of business intelligence took new meaning, and a foundation of data became the bedrock of the go-forward strategy. ?Entirely new ways of generating intelligence that could monitor production, inventory, distribution, demand, and sales had to be put in place – ingesting data from its own systems, as well as retailers, hospitals, industry and social media – and using AI and machine learning to optimize allocation and pricing and ethical distribution across affected communities. And given the crisis situation, all this had to be done with transparency to the government and regulators, all closely engaged.

Third, entire customer journeys had to be rethought through at the peak of the crisis – and redesigned with digital platforms that could accommodate the scale and speed of communication that was needed. AI and natural language processing were brought into play to analyze consumer feedback and sentiment, and personalized, relevant information and recommendations communicated consistently across multiple platforms. All of this eventually contributed to the business increasing market share and improving brand reputation – thereby not only just addressing the crisis but also bridging the trust deficit for the overall category in the industry – and eventually converting a difficult crisis into an opportunity for itself, its consumers, and its shareholders. This is a great example of what digital transformation looks like in real life.

Lessons learned, in the trenches

I also think Reckitt's experience in the infant formula crisis offers some valuable insights and best practices for digital leaders around the world, and a few stood out for me:

·?A foundation of data is critical – without a strong enterprise data platform and an operating model for data, this level of agility in a crisis would frankly be unthinkable.

·?Depth in business is fundamental – understanding the domain and the specific regulatory, consumer and supply chain challenges of a business is critical for any technology team.

·?Out of crisis can come opportunity. Data and technology need to be seen as drivers not enablers, just as IT teams need to be seen as business owners not service providers.

In the increasingly volatile dynamic of the geopolitical, macroeconomic, various unpredictable scenarios and shifting consumer preferences we live and work in - the old adage is even more true today – every company is really a technology and data company, even if some may not know it yet.? What’s becoming just as true is the other side of that coin – every technology leader is really a business leader and must serve and rise to that calling. You can catch my conversation here .