A little different today, but bear with me as I climb on to my soapbox to rant about Digital Transformation. 😉
Upfront, I apologise, I’m sorry.
On to the update/rant.
The phrase Digital Transformation, and why it is misused
I understand the lure; honestly, I do. It’s a snappy phrase and something that evokes moving forward and resolving problems, but boy do I dislike the phrase Digital Transformation! Odd indeed for a consultant that has created a business solely to help companies with their Digital Transformations!
Why do I dislike the phrase then, when it’s contributing to feeding the family? Surely I should embrace the phrase, lean in and exploit its use the maximum amount of advantage to my business? That would be the most obvious thing to do os course. But I’ve never been simple, or standard. I’m an Englishman in the French West Indies for Christ’s sake!
I have no liking, nor affection for the phrase “Digital Transformation” because of what it has become and what it means to most people. I'm a little melodramatic of course, but let me explain, but first a short history for context.
When we first started this journey computerising and digitalising businesses, we had clear goals and clear objectives that were easily measured: "13% productivity increase in the process", "240% increase in efficiency". It was simple; solutions existed, or solutions were created quickly to respond to easily identifiable business problems.
Neumann’s calculating machine, albeit discussed in an academic paper, proved that simple calculations repeatedly exercised regularly in business, automated easily with significant gains in productivity. Something that took teams of “Meatware” hours or days to perform could be done in minutes and hours. The benefits were obvious. The imagined savings only served to facilitate the implementation of the computers that would eventually hit the market.
The introduction of more powerful computers and ultimately Smartphones had had profound effects on how businesses operate today, from the 1960s when IBM introduced the System 360 to today’s tablet/PC hybrid computers that are always-on, always mobile and always connected to the network, be it wifi, LTE or the coming 5G. Business processes are now performed, managed and analysed in near-realtime, anywhere on the planet and at any time. This shift in paradigm is hugely important to understand when you undertake your business operations transformations.
My discussion is leading to where there is much to do, Business Operations. Digital Transformation has been hijacked by marketing and opportunists to mean something that it is not, or more accurately, something smaller than it is in reality.
If we look at one of the better definitions (in my opinion), Digital Transformation is:
Digital Transformation is the methodology in which organizations transform and create new business models and culture with digital technologies.
First and foremost, a “methodology”, not a project, not a product and certainly not a service, you cannot buy twelve kilos of Digital Transformation from your local Digital Transformation Supermarket … for a good reason! Methodologies are developed, tested and refined on an ongoing basis, in situ within an organisation that is in the midst of transformation.
Secondly, organisational transformation — implying change — is hard, very hard. And transformation takes time and effort from all stakeholders, but when that change is Digital Transformation, it is exponentially more difficult. It requires a shift in mindset and is fraught with difficulties and traps all along the journey.
The third, and arguably one of the most critical elements in the definition, is the word new. New implies innovation, in the sense that we invent something new. Please don’t confuse it with revolution though. Innovation, as I’ve previously discussed, is a process where we look at existing ways of doing something and using tools and methodologies, and we construct a better way to — at the very least — achieve the same thing. Sometimes Innovation leads us to change the process, enabling hitherto unknown benefits. Structure, methodology and one other thing allow this.
That last thing is Culture. You have to change Culture to succeed in Digital Transformation, which is why, in 2013, McKinsey estimated that around 70% of all Digital Transformation projects were bound to fail and why Constellation Research’s annual Digital Transformation study for 2018 (published in January 2019) showed that 58% of internal staff were resistant to change, entailing an impediment to successful Digital Transformation. Respondents of the same survey returned that 67% of Leadership in any organisation was concerned and preoccupied with the change to organisational culture that would be required. But it’s not all bad news …
Of the projects for Digital Transformation that were completed successfully in 2018, 68% yielded a positive ROI, with only 9% responding that they didn’t. What do we conclude from this? Well, Digital Transformation is hard, something I’ve discussed at length, but the benefits are there, and they are achievable with the right help, methodologies and processes. Regardless of the reason for Digital Transformation, be it efficiency gains, building a competitive advantage in a market, innovating and creating a new market, the advantages to changing culture are repeatable and reusable benefits for all involved.
But I haven’t explained as yet why I dislike the phrase so much.
The phrase has been hijacked to mean digital marketing. Organisations around the globe are popping up offering “Digital Transformation” Services. When I look into this in detail, they are almost always digital marketing offices. Their services are valuable, and their services are necessary — in case you thought there were sour grapes —, but their services only respond to one small side of the requirements, and in some case resolve nothing.
Take, for example, an organisation that wants to develop a better, more flexible and efficient way of collecting data and displaying that information in a way that creates value for them and their clients. I’m currently working with one such company on a project whose goal is to do just that. We’ve been developing an interactive dashboard of decisional data that enables assessment of the efficiency of their third-party suppliers, their clients’ operations. Soon, we aim to be capable of predicting with reasonable accuracy the life span of the vital equipment in their clients’ sites. This is a business process, and no level of marketing input will change the fundamental operations digital transformation required. Ultimately, digital marketing will help us generalise, educate and sell our services to a broader market, but the fundamentals of the business must initially transform.
Another client of mine has an even more fundamental business process issue. They currently use much paper — stored for ten years — to plan, execute and record time spent on projects that are just screaming out for innovation using Digital Transformation. I’m setting up a small pilot project to assess whether my recommendations will bring the benefits estimated (I’m quietly confident incidentally).
There are hundreds of thousands of businesses out there in the Caribbean alone, that require, no need, help in transforming digitally.
Be a good citizen. Please forward this email on to them, talk to them and get them on board with a small (inexpensive) project for them to see the value of Digital Transformation immediately. Often, we can use mostly un-used but existing tools to achieve meaningful results.
I said I didn’t like the phrase Digital Transformation, but secretly, I love it. Shhh, don’t tell anyone. Let me know how you get on.
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