What is Digital Transformation and WTF is Digital after all?
Alex Finomenos
I Help Businesses Turn Chaos into Clarity with Bespoke Solutions Powered by Low-Code Tools like Ninox
I?have noticed a very prevalent difficulty and misconception around the definition of "Digital Transformation" and "Digital Transformation Strategy" from my everyday interactions and discussions with numerous businesses and business executives.
Many people find those terms to be buzzy and super cool without even understanding sometimes what they mean and others confusing and many times eerie and frightening,?but most of them see ones and zeros and some kind of complex coding blocks whenever they even think of the subject or whenever they try to discuss about it.
Well, the creepy technical components of digital transformation is definitely NOT what Digital Transformation is about. Tech experts working on a Digital Transformation project will do anything they will be asked to do. What you are asking them to accomplish is what a Digital Transformation and Digital Transformation Strategy is finally about. Nearly anything that may be categorised as a digital need or requirement is probably possible in the times we live in now.
In it's simplest possible definition, Digital Transformation is the use of digital technology that enables a company to fundamentally transform its mindset towards this new digital realm and emerge more productive, competitive, effective, and efficient. This is, as I mentioned, the most basic definition of the term. In this post, we shall analyse it in greater detail, but for now, remember the followings:
As you see things might be simpler than they sometimes seem or sound. In order to go deeper to the terms, we will take it one by one by breaking down the phrase "Digital Transformation" & "Digital Transformation Strategy" into words.
DIGITAL
We must first clarify what digital is NOT in order to grasp what it is.?
In this sense, "digital" does not refer to landing pages, websites, user experiences, software solutions, social media platforms, or applications that are used to perform one task or another.
Here, the term "digital" mostly refers to the global widespread, fast embracement and adoption of technology and automations by organisations, their partners, employees, rivals, and customers.
Consider this for a moment: Everyone now uses digital technologies. Your children, your peers, your clients, your employees, your business partners, your competitors, and that tiny café around the street that everyone is raving about.
TRANSFORMATION
You may argue that the definition of transformation is rather obvious, but in this context, the term refers more to innovation and accepting change.?
Think of it primarily as re-creating or re-positioning a company and its culture into this new digital world, to be more open and receptive to innovation and change, in order to go from a state of business-as-usual to a cutting-edge innovative organisation.
STRATEGY
Strategy is about establishing the goal and preparing the how, just like any other strategy.?
A solid plan with a clear goal and vision, measurable targets, justifications for why we should change, and a plan for how to get there is what a strategy is meant to be.?
A strong strategy should be able to accurately predict problems and difficulties and provide with proactive solutions in order to accomplish our goals. It should also be able to indicate what should be stopped in order for something else to start or take place.
Simply put, a digital transformation strategy is a set of actions with the goal of repositioning an organization in the new digital world. This is done to ensure sustainability and performance in a world that is constantly changing, becoming more demanding, and deciding who stays and who leaves over the course of a single night.?
A digital transformation plan is not focused on budgets, KPIs, or spreadsheets; rather, it is about changing your organisation's mindset and culture to embrace the new and leave a distinctive impression on your consumers mind, who are constantly under attack by your competition.
WHY DIGITAL TRANSFORMATION?
I'll just make one unarguable point: World has changed. Why should your company's operations, client interactions, and business practices all stay the same??
Undisputed fact #2: Over the past ten years, there has been a significant shift in how customers look for information and make buying decisions.?How can traditional marketing and sales techniques still be relevant today?
Many companies use financial statements from the near past in their strategies in order to predict and plan the future. How do they determine if the most recent outcomes can serve as the proper benchmark? What if those results weren't that good after all? What if they could be much better? Can you imagine what negative impact would that have on how future results are planned?
Other sources like demographics or tools like SWOT, PEST, 5 WHYs Business canvases which are still taken in consideration in business strategies are incredibly subjective, arbitrary and framed from the viewpoint of the corporation. Most of the time, not in the end customer perspective tend to represent what the company would like the facts to be rather than what they actually are.
Companies employ all these classic techniques and subjective data models to develop platforms, websites, and mobile applications that no longer wow customers. All of the above items are taken for granted by today's customers, as the minimum of what they believe a company of our century should provide.
To put it simply, the reason "why a digital transformation", is for you and your company to gain a competitive advantage in a rigid and demanding new world who even speaks digitally.?
What's in there?
A "Transformed" organisation has adopted new techniques and ways of gathering statistics and information that assist in making unfailing decisions.
Data Driven AI solutions can predict and comprehend what customers want, how they feel, what they think about your company and how they make decisions.
Building exact "clones" of your client profiles that may be utilised for creating plans around them is possible as a result of proper integration with the customer digital communication channels.
Sentiment and accurate consumer feedback may significantly assist us improve our products, services, and customer service and experience.
A/B testing approaches and experimentation can show you how to accomplish goals in the best way possible minimising mistakes and failures.
Take my word! Without exaggeration, using effective digital (marketing) tactics, one may identify potential customers who are in need of their products or services and speak to them with a customised message about their offerings.
90% of active businesses have 90% of their target audience online, yet even with that, there are organisations with little or no digital adoption today. As a result, clients are lost to competitors with a better digital footprint who understand how to leverage the digital ecosystem to persuade consumers to buy their products and services.?
领英推荐
And for those who prefer the boogieman way, if you don't do it, your competitor will!
Why so many Digital Transformation Projects fail?
More than 70% of the digital transformation projects run by all size of companies have demonstrably failed. Huge sums of money have been spent, and most of those who failed are unwilling to try again.?
If you observe both "Transformed" and "Untransformed" organisations, you will notice that the only thing that differentiates them is their own people.
Leaders who drive innovation can persuade the entire organisation to reform and accept change, whilst those who don't make the transformation impossible.
Another reason is the lack of Digital Transformation Leaders. Companies wish to change, evolve and transform, but if no one has the necessary expertise, perspective and vision.?they fail to meet this objective and this is why many projects fail.
One would meet 3 types of companies in the new Digital Ecosystem:
1) Companies who have stuck with tradition and have adopted very little or no digital technology at all within their organisations.?
2) Companies that do some digital, utilise software or apps to digitalise particular services, such as digital marketing, an ERP or a CRM. (Please note that this is not digital transformation.)?
3) Finally companies to undergo full Digital Transformation and adopt a digital-first, customer-first culture.
The businesses of the third type have the highest levels of sustainable competitive advantage. Customers will continue to support them with loyalty because they will be the winners if they are not already winning. These businesses have a distinct way of thinking about everything related to their business and their industry, and they will guide and serve as a leading example for other businesses in the future.
Another typical mistake is that many decision-makers think that digital transformation is a one-man show and that they can complete their Digital Transformation by employing a person who they call digital transformation manager or leader. A complete digital transformation, however, is not a single endeavor nor a one-man show. When it comes to implementation, a firm will require a number of subprojects with professional Project Managers, Vendors, and System Integrators for a successful overall output. A leader is needed to set the vision, do the project governance, and lead the organisation change management process.
All things considered, the technology is not to blame for the increasing number of Digital Transformation projects that fail. Not because there are issues or demands that technology is unable to meet. It's because not all stakeholders consistently share the transformation vision. It is because, despite their desire to transform (because it sounds nice sometimes), these individuals overlook or refuse to reengineer company processes out of fear of upsetting the status quo.
?How does a "Transformed" mindset look?
The majority of CEOs and leaders in digitally transformed organisations think quite similarly, especially when it comes to business operations and customer experience and management.
They frequently concur that simplicity and automation are key to success and that customers lead the way and define the decisions an organization must make.
When others see internal processes, Digital Transformation leaders see automations and how these might simplify the lives of everyone who works in or interacts with the company. How can I employ the minds of our people more so than their hands? Our company will prosper if our people have more time to think about the business, our services and products and our customers, rather than getting documents signed or completing forms.
Digital Transformation Leaders are aware that an organisation's internal processes are what give it its identity. Thus they avoid to implement software solutions that require the company to modify their identity (internal processes) and the way they do their business. Instead, they favor coming up with flexible and adaptable solutions that may be totally customised to fit the particular ways they conduct their business.
For a Digital Transformation Leader, the customer experience comes first. How do I make it better all the time? How can I make an impression on my consumers at every stage of our interactions? How can I distinguish my business from others such that no one else can imitate or copy us? How can I utilise digital technology to relief a pain or win time for everyone that is interacting with my company? They measure success based on Customer Value KPIs and not on obsolete KPIs. While other base their value proposition on industry standards, Digital Leaders base it on actual customer needs and they always generate new business opportunities.
Decisions are made differently in a "Transformed" mindset. Digital Leaders make decisions based on actual testing, data analysis, and validation, whereas "Non-Transformed" firms make decisions based on intuition that are approved by directors. They think that investing time and resources in testing ideas or activities today will result in significant time and resource savings down the road. Digital Transformation Leaders promote the notion of MVPs (Minimum Viable Goods) and prototypes rather than ideal, fully-finished products since they are less risky and can be evaluated by actual customers who can provide genuine feedback and validation.
Companies with a "Analog Mindset" see their customers as a mass market that can be reached and interacted with through broad communications, whereas businesses led by digital leaders see their customers as small, dynamic networks that can be reached and interacted with through two-way, personalised communications that are custom-made to reach them at the right time with the right message and in the right context. They use marketing to inspire purchase and loyalty rather than persuade or urge purchase as "Analog" companies do.
Data, knowledge, and expertise are viewed differently by leaders in the digital transformation. Leaders who see and think "digitally" believe in sharing knowledge and expertise in order to inspire trust and gather followers who will convert into loyal customers. This is in contrast to "Analog" companies that struggle to keep all of the above secure within the organisation.
A paperless company is not just an environmental thing for them. Why keep data on a media that takes up space (more expensive), might be lost or destroyed (risk of data loss), and requires physical presence to read or analyse?
Finally, they are always learning as many as possible about their customers since they are aware that they are the ones who will determine the direction of their business. They use this knowledge to constantly enhance their goods and services and boost client satisfaction and loyalty.?
Why the term Digital?
Some may argue:
Why is it termed "Digital" Transformation when you keep talking about mentality and cultural change?
In my opinion, Digital Transformation is more of a Business Transformation as improving efficiency, performance, effectiveness, and customer experience and satisfaction is its primary goal. The "Digital" component alludes to the fact that digital technologies are the only way to achieve those goals in the times we live in, when interactions at all levels have changed radically and customers have grown more demanding and eager to change.
So when we talk about Digital/Business Transformation, the various aspects that will be impacted and "transformed" as a result of the overall transformation need to be addressed. As we've previously mentioned, these are an organisation's mindset, culture, and the digital technologies, but it's also its processes that must be reengineered, and organisational change as new people will be required to drive all this new state.
In a nutshell, no matter how amazing the digital technology that we recruit in our Digital Transformation project is, if we don't transform the whole business, the mentality, the culture, the organisation, the processes, the people and our own DNA, the project will most likely fail, so think of Digital Transformation as Business Transformation and before you decide to jump into a long-lasting and painful Digital Transformation project, make sure you and everybody else are ready and open to change the "Business as usual"!
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About me
I am A Digital Communication & Transformation Strategist with 19+ years of experience in Digital Marketing, Digital Transformation, Advertising & Software Solutions. A native "Digital Language" speaker who has provided Digital application, transformation and marketing strategies for several major players in the international market.
My vision is to actively contribute to the global digital transformation, and I will achieve this by constant learning, strategizing, measuring and sharing knowledge with colleagues and clients, through national and international projects.
If you enjoyed this article, you'll find more of?mine here. Follow me at LinkedIn if you'd like to read upcoming posts and send me an?invitation to connect. I'd love to hear from you!
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