All too often digital transformation is confused with digitizing processes and offering more specific digital services and touchpoints in order to serve a more ‘digital’ customer/worker/stakeholder and, in the end, obviously a business goal, in practice often around king customer. However, it’s much more than that.
Many have expressed their dissatisfaction with the term digital transformation as it is too much about the omni-presence of “digital”, from this narrow confusion perspective, as if digital is “new”. Well, it isn’t exactly as if ‘digital’ is anything new, is it? It also not as if business transformation is new. Remember Business Process Reengineering, for instance.
What’s new or different with digital transformation?
Leaving debates on the term digital transformation aside for now (it’s as good or as bad a term as any other, again, the issue is we often define it in a too restricted way), it’s important to look at what exactly we transform, why and how, indeed using, among others, a broad range of more or less recent technologies. It’s not about those technologies themselves but about the accelerating adoption and combination of several of them to achieve a new competency, build a new value network and alter the ways we do business or simply ‘live’. OK but what is new?
It is more than just about a function, process, digital or digitization, it’s also about acquiring entirely new competencies, coming up with new business models and dramatically redesign experiences or business as such – in an inevitably connected way where connectivity on all levels (partners, technological connectors,…) is crucial. True but, again, what is new?
When we say that digital transformation needs to be approached holistically and can touch business activities, business processes, business models, business ecosystems and business assets in our guide to digital transformation, we essentially mean that digital transformation can be about anything and any combination of goals whereby multiple technologies can be better leveraged to achieve more, develop different business models and accelerate/optimize better when, where, how and for whom/what it matters at the right moment and using the right technologies and information. Once more, what is new? Indeed, digital transformation, as we mentioned before is in more than one sense, catching up with a digital and human reality we ignored for far too long.
When people say there is nothing new about digital transformation, at the same time we agree and disagree. Optimization is indeed not new. Nor is all the rest we mentioned. A major difference lies in the ways the accelerating adoption of technologies and the very reasons why they are embraced (and developed) by organizations and ‘consumers’ impacts virtually everything and is impacted by so many elements as well. It’s that hybrid inter-connectedness whereby no one escapes the inevitable impact. It’s a mesh, de facto decentralized like blockchain technology and to some extent even an apparent chaos.
Look at how IoT projects radically change the way we design networks and bring processing and connectivity functions closer to the device with fog computing, instead of using the traditional network models we have. Look at how the increasing focus of CIOs on the business is entirely changing the IT industry where vendors become service providers, outsourcing is on the rise and the whole ecosystem is changing. Look at how demands for hybrid, agile and fast solutions affect literally any business domain and part of business ecosystems, including all partners.
Transformation from hybrid inter-connectivity, a mesh and chaos to less linear approaches and fluidity
The lack of seeing all these aspects and all the crucial elements involved in digital transformation projects, from the most obvious which we always tend to forget to the most innovative, is what makes projects fail.
The same goes for too much focus on one rather isolated part of a digitization or even reorganization does. Digitizing, reorganizing and optimizing are not digital transformation. And no, you can’t digitally transform a business as an entity, what does that even mean? But that doesn’t mean digital transformation doesn’t exist. It’s there from process transformation to the entire reengineering of the business with digital taking center stage in even dramatic ways, up to the very business model and a huge increase and change in how technologies are used to thrive in a reality that is more ‘digital’ than ever and revolves around fluidity and elasticity in a connected ecosystem approach.
As we mentioned this requires a holistic approach. However, one big problem is that traditional business management thinking all too often is still very linear.
Moreover, the mandate to transform things still often comes from within specific departments who live in splendid isolation. And that’s exactly what we need to avoid.
Sure, you need steps to change things but at the same time you need to get beyond the linear thinking as the reality of your customers and business (ecosystem) isn’t linear at all, it’s complex, hybrid and fluid. Just as its underlying technological, societal and human evolutions, digital transformation rises above borders and is not linear but extremely inter-connected, requiring entirely new paradigms of working together, tapping into networks of value, connecting the dots of information, bridging functions and divisions, requiring executives to acquire skills they traditionally have not learned in siloed environments, etc.
If you want to change a business model, there are inevitable consequences on business processes, activities, ecosystems, capabilities or assets, each time different, depending on the goal. As we will zoom in on how digital transformation is de facto happening on the level of, among others, respectively processes, business models, capabilities, functions and assets, we risk narrowing it down to a limited scope as well.
However, in order to get the holistic picture right, as a manager you need to understand the parts, especially those you might not master yet and the dimension of elasticity. In fact, to understand today’s business evolutions it’s more than useful to understand the drivers within technological innovations, far beyond the obvious and looking at the forces shaping them and directions they move into, among others the edge, the immediate and the API.
There is no escape. You need to know about business process reegineering, information management, IT, customer-centricity and so on. Not as an expert in the various domains (and their many sub-domains) but as an exec who is able to make sure those dots are connected and the siloed and purely linear views are dropped for more connected, holistic and elastic ones. Welcome to a hybrid and fluid world – for executives too.
Top image: Shutterstock – Copyright: Eugene Sergeev