What is Digital Transformation, Really?

What is Digital Transformation, Really?

Everyone’s talking about ‘digital transformation’.

C-suites and boards list it among their top 2015 priorities. Newly minted experts abound. Big consultancies have launched dedicated practice areas, despite being as in need of transformation as their clients are. Digital agencies paint ‘transformation’ as just another fancy way to say ‘marketing’ in order to claim it as their own. And for every expert, consultant, journalist, futurist, keynote speaker, marketer, executive and analyst who utters the phrase‘ digital transformation’, the words come to mean something different.

Wikipedia offers us this not-so-helpful definition:

“Digital transformation refers to the changes associated with the application of digital technology in all aspects of human society. Digital transformation may be thought as the third stage of embracing digital technologies: digital competence → digital literacy → digital transformation. The latter stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods.”

Then for safe measure, tacks on this odd interpretation:

“In a narrower sense, digital transformation may refer to the concept of going paperless.”

So if I understand this correctly, digital transformation is technology implementation, just one stage in a process many companies haven’t even begun yet, or a way to declutter your desk.

Ummm, what?

As I’ve worked with leaders in a wide range of large and mid-sized organizations, I’ve found that definitions that attempt to define ‘digital transformation’ by what it isfall well short of the mark — while definitions that define ‘digital transformation’ by what it’s meant to achieve come much closer. The simpler the better. And the more clearly it shines a light on a fundamental business challenge and/or draws a meaningful distinction between the current and desired future states, the more likely it is to resonate with a buzz-weary executive who might not even be certain he wants anything to do with digital at all.

For my part, I’ve landed on this straightforward definition:

Digital transformation closes the gap between what digital customers already expect and what analog businesses actually deliver.

In practice, what does that gap look like? What might it take to close it? The application of technology? Increasing the level of digital literacy among your leaders or team members?Reimagining the business, it’s model and structure, how it creates value, and how it makes money? The answer is different for every business, but the end result shouldn’t be: digital transformation should make your business better.

Digital Transformation Greg Verdino

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  • David Terrar March 21, 2015 at 8:20 AM

    We’re on the same wavelength on digital transformation but I think your definition covers the core issue, but doesn’t tell enough of the story. It assume that the audience understands what you mean by digital in all its forms. I’m adding a link to your post to my own trying to define what it is. I needed 2 long sentences. But I suspect that most of the time we will be in violent agreement.

  • Adam Bhakrani November 20, 2015 at 4:02 PM

    Thanks for your thought Greg. We have been digital for decades now. This has already started back then when the first computers and software hit the market. Organizations as well as consumers have used and harnessed the potential of IT to get their things done. That to me is digital. One can say that things are much different, because we have advanced technologies and new approaches to develop and implement these technologies, but other than that everything is the same. One could say that IT has a much deeper penetration now than before. My question to you and the reader base here: What is the difference between being digital before and now? Haven’t we been digital before, although at a much smaller scale? Comments and feedback appreciated 🙂

    • Greg Author December 9, 2015 at 1:11 PM

      Thanks for your comment, Adam – and apologies it has taken me so long to post it and respond! Certainly scale is one factor. Related to scale, digital has moved from something the IT department and technology folks need to worry about, to something everybody in the organization (from the CEO to the receptionist) needs to embrace. It’s more than technology — and sometimes, IT-driven technology decisions made over the years may even discourage an organization from being truly digital. Case in point: email and intranets are hardly “digital” in a world where the workforce itself has moved beyond these things to messaging, real-time collaboration, social networking, mobile and BYOD. Mostly though, as it related to the main point of my post, is that while organizations have been moving toward digital the fact remains that almost all lag their customers by a good number of years, and fail to meet even the most basic expectations a digital consumer has for what it should be like to transact with a business. Can the typical Fortune 1000 company say it is as easy to do business with as Uber, as efficient as Zappos, as agile as Amazon? Not yet! But to the consumer, the best experience they just had with a company like Uber, Zappos or Amazon becomes the minimum acceptable experience they expect from every company.

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