DEFINING DIGITAL TRANSFORMATION

Jason Bloomberg, 18 months ago, on his Forbes Tech blog, summarised The 2014 State of Digital Transformation by Brian Solis of Altimeter in US.. It explained Altimeter’s definition of Digital Transformation:

“Digital Transformation is the realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.”

Brian Solis pointed out that companies needed to think of Digital Transformation as a “formal effort to renovate business vision, models, and investments for a new digital economy.” Yet, according to the report, “Even when explicitly defined, the term ‘digital transformation’ is still misunderstood.” The challenge with this definition wasn’t the investment in technology. Rather, the realignment of business models presented the greatest challenge – the transformation part of Digital Transformation. In fact, different people had different misconceptions, sometimes based on their role. Strategists, for example, “often equate the term ‘digital transformation’ with a shift in technology investment,” according to the report. Solis added that the companies he interviewed for the report were “thinking they are changing but in reality they’re only investing in technology. That’s not really digital transformation.”

Even more broadly, virtually all survey respondents believed that “Improving processes that expedite changes to digital properties, i.e. website updates new mobile or social platforms, etc.” was the most important part of their Digital Transformation efforts, and nearly all believed that “integrating all social, mobile, web, ecommerce, service efforts and investments to deliver an integrated and frictionless customer experience” was equally important. This view causes concern. First, these priorities are largely a rehash of the move to the Web in the late 1990s, and second, they are not particularly transformative. Back in 1999 the story was achieving a single view of the customer via multiple channels or touchpoints – just as it is now. Digital Transformation calls for “a renewed focus on the entire customer experience,” according to the Altimeter report – the same priority companies had when they built their first Web sites.

While some organizations confuse Digital Transformation with increased technology spending, and others are simply revisiting their original move to the Web, Altimeter did uncover some examples of Digital Transformation that were truly transformative. “We’ve heard that digital — especially mobile — is often an afterthought or ‘bolt-on’ program to existing marketing efforts,” the report allows, highlighting the lack of transformation in certain efforts. “Yet it is the very thing that is changing customer behavior and preferences.” Changing customer behavior, then, is called out as one example of transformation, and mobile leads the way. The report adds: “the essence of digital transformation comes down to people and how their digital behaviors differ from that of the traditional customers before them.” 
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As most firms’ customers are becoming increasingly wired and tech-savvy, thus companies must keep up with their dynamic customer landscape. Simply adding new mobile and social channels, however, belies the internal organizational transformation necessary to both meet changing customer demands and to do so quickly. Throughout their interviews, Altimeter “found digital investments have evolved beyond a follow-up to investments in traditional touchpoints and supporting systems. Now, they’re leading the way toward transformation.” Transformation not only of how such companies interact with customers, but also how they rise to the Digital Transformation challenge via internal reorganization, where Digital Centres of Excellence were becoming popular.

IN 2016, HAS THE BUSINESS WORLD MOVED ON AND LEARNT FROM THESE EXPERIENCES? IS YOUR ORGANISATION A LONG WAY DOWN THE ROAD OF DIGITAL TRANSFORMATION AND REAPING THE BENEFITS?