What Does ‘Digital Transformation’ Actually Mean?
Gabrielle Hase
CEO, Non-Executive Director, Board Advisor, Keynote Speaker | K3 Plc & UltraCommerce
‘Digital transformation’. Arguably one of the most abused phrases of the last few years, digital transformation should be retired once and for all. Or should it? Of course, I’m being a bit dramatic, and probably shouldn’t banish a useful phrase just because I’m tired of hearing it. In fact, I recently added it into my LinkedIn profile summary because everyone’s looking for that phrase. But what does it actually mean?
Like omnicommerce, inclusivity and ‘as-a-service’, the phrase ‘digital transformation’ is one that means everything and nothing all at once.
Digital transformation is much more than just taking an everyday action and slapping ‘digital’ on the front of it. Launching a basic website, creating a social media profile, or investing in Facebook advertising is NOT a digital transformation - unless, of course, you’ve never done any of these things before. In which case you are in an entirely different situation; one I call ‘holy crap, get your act together and FAST’.
Let me explain what a digital transformation really means to me, in the hope that we can both learn to live with it, if not actually like it. The way I see it, there are three different avenues of digital transformation:
1. A Full-Blown Transformation of Processes
This means adding digital capability across your entire business. It means automating back end functions like processing invoices or taking payments, all the way through to creating a new way to interact with your customers. It’s essentially ripping down the house and building an entirely new one. It’s long and expensive, but it’s game changing.
Just look at the Tate. As a member of the Digital Steering Committee, I had a bird’s eye view of the Gallery-wide project to overhaul the plumbing of the entire business. It was a significant investment that’s taken over three years to complete, and the change has been truly remarkable. We replaced a variety of different legacy systems for ticketing, ecommerce, email marketing and memberships that had evolved over time into some sort of Frankenstein’s monster. A lot of companies are in that boat; different needs and audiences require different add-ons at different times, but they don’t end up speaking to each other. It’s a mishmash, to put it politely, and one that customers can sense.
So, the team rearchitected it. They bought the tech and implemented solutions in holistic ways that served all stakeholders in the gallery, and the audiences, in a thoughtful, well-considered fashion. It touches almost every part of the business and has made digital much more a part of every conversation. Now, the Tate has a system in place that’s been built to serve many masters in a modern forward-thinking manner. And it’s shown great rewards, especially during the pandemic.
2. Opening A New Route to Market
Digital transformation can happen by bringing your product and services to a new market, geographically or otherwise. That means launching a website, selling on marketplaces, engaging on social media - using whatever digital tools and platforms that facilitate the exchange – transactions, conversation, content creation and consumption, etc.
Twelve years ago, I worked with a small team to launch a new website and a completely new direct-to-consumer channel for TK Maxx. It was digital transformation from a business model perspective as TK Maxx had never before (notoriously, one could say) engaged in any dialogue with its consumers. We needed to create a digital capability that hadn’t been considered necessary – and certainly didn’t exist within the business - before that point. So we created the channel, hired the skills, and the company hasn’t looked back since.
Another example of opening a new route to market digitally (and therefore transforming the business) is Beyond Meat, which launched an e-commerce site last year to sell its signature plant-based meat products directly to consumers. It uses this channel to innovate in product bundling, limited-time offers and trial packs. In line with its sustainability mission, the brand also packages every order with an insulated, recyclable shipping box and sends it out via UPS carbon neutral shopping.
3. Cultural Transformation
This illustration of digital transformation is about actively adopting a digital mindset. That means seeing things through the eyes of your customer and ensuring that everyone in the organisation has the skills and digital tools to fulfil their needs. It means adding digital skills to each job spec, and to the Board, to be better in touch with every customer and new ways of working.
Walmart perfectly demonstrated how to do this. Its acquisition of pureplay retailers such as Jet.com, Flipkart, ModCloth, Cornerstone, Moosejaw and Bonobos enabled it to completely rewrite its brand DNA. Walmart immediately appointed talent from those retailers in prominent positions within the company, to create a new dream team focused on growth and expansion. Digital is now a way of thinking for every person at Walmart. And it shows. It’s enjoying a 44% post-pandemic growth rate and is now a true competitor to Amazon.
You could argue that so many businesses whose entire workforce went remote virtually overnight experienced their own cultural digital transformation. Consider event planners, who might have thought that digital know-how is a ‘nice to have’, who now think it’s a critical skill set as the entire nature of their jobs have changed.
Like many things, I suppose digital transformation is in the eye of the beholder. However you define it, we’ve seen a lot more of it over the last year than ever before, so I reckon the term is here to stay.
The Tech Spec
- Otter.ai – I love this app and think it’s the biggest bargain on the planet. It’s a super handy transcript platform that means no meeting, conversation or idea every gets forgotten or mislaid.
- Slack – Love it or hate it, you can’t deny it’s useful. And yes, Microsoft Teams has its own fanbase, but I still like Slack’s tone of voice and sense of fun.
- LumApps – A social intranet network that encourages communication and collaboration across different teams, departments and locations.
?Written by Gabrielle Hase.
CEO of Soleberry Advisory and digital Non-Executive Director. I want to help solve the problem of the lack of appropriate female and digital skills and perspectives at the board table.
Check out and subscribe to Digital On Board for comments on trends and current events, useful technology highlights, and tips and tricks I’ve learned to help brands understand, engage and retain their customers. Please feel free to share.
Technology and Innovation Advisor, Executive | Advisory board member
3 年Excelente Gabrielle Hase ! Thanks for sharing.
CEO and Founder at Navos | Former CIO at Hargreaves Lansdown | 2014 UK CIO of the Year | 2023 FinTech Leader of the Year | Father to a 17yr old British GT racing driver
3 年Fascinating and accurate insight Gabrielle Hase. I have to agree - far too many people consider ideas about a shiny new website to be digital transformation whereas the reality is about dovetailing flawless execution of change and culture, throughout the business. This includes the backend technology stack that is often ignored due to being 'boring'. Naysayers are side-lined as obstacles, until the house of cards comes tumbling down, or costs rocket without a return. Digital Transformations are one of the most exciting programmes of work, and approached correctly can also glean massive results, for any organisation.
Ecommerce Strategy + Technology Selection (Replatforming) Consultant ?? Fractional Ecommerce Director + Host of Inside Commerce Podcast ????
3 年Great article as always Gabrielle Hase. It's interesting to see how big brands are looking at modern tech stacks to accelerate their digital transformation. A good example is John Lewis putting Commercetools in. It's going to be interesting to see which companies drive change via business need/process first vs. select the latest tech and shoehorn it in (which will create a culture shock).
Managing Director at Stunn Ltd | Founder at Complete Broking
3 年Good article, Gabrielle. I'd argue that 1 & 3 are actually intrinsically linked. We're often instructed for "segment 1" where straight-through processing, cross-departmental data and function sharing, straight through transactions, AI augmentation and all that other techno jingo lives. We take our stewardship of these processes extremely seriously. Two things are often missed from the scoping, planning and execution of such projects; the cultural fit and the people who are directly impacted by the change. Sometimes, change is driven by workforce feedback and complements or improves upon existing processes. Other times, the baby is out with the bathwater and an entirely new vision for conducting business becomes the direction of travel for the transformation. This latter approach has the greater potential benefit of course, but there's a huge risk too - poor communication, massive change management programmes for people running parallel to the system changes they create. Having the internal customer along for the ride is absolutely critical to avoiding at best whitewater and worst failure. When transformation doesn't consider the shop floor, it's opening the door to unnecessary risk. The staff in this context are the customer. Any large consultancy walking into a board room with 20 workshops programmed for senior ops representatives, IT and the C suite, a "five-year plan" and little more than a questionnaire for the staff should be turned 180 degrees and asked to leave before the budget is burned. Similarly, anyone running an evaluation about replacing a 'system' without talking to the people who work with it is also asking for trouble - both a missed opportunity to see the real problems beneath the KPIs and missing the chance to give that collective mind a voice.
Director of E-commerce & Transformation | Head of Product | Head of Digital | Head of Growth
3 年Brilliant article with great reference points! Regarding the tools, I just want to second the shout out for otter.ai. I recently subscribed and the speech-to-text space has a very strong player here, it’s transformed how I take notes. And they’re not even sponsoring me to say that. The one gotcha is the occasional transliteration error which is inadvertently hilarious, but as you have the audio and time stamping it’s easy to resolve even well after the fact.