What is Digital Transformation?
As I have participated and observed in a number of digital transformation and pre-digital transformation waves of changes, I have discovered and rediscovered what a digital transformation is. I’ve read a lot on the subject as well as listened to a number of prominent thought leaders talk about it. And then I think – think about it all the time – to understand it, visualize it, structure it and figure how I see it from my perspective. In this and a number of follow up posts I will try to put forward my perspective on the subject through a number of key questions. Some lines of thought may appear to be very similar to what you have heard, read or experienced. Some may sound very different and maybe to the point of craziness.
Anyway, let’s start with what is digital transformation?
The way I see it, there are two views of it – one is environmental, at a macro level. The other is organizational, at a micro level.
Many things come up in relation to Digital Transformation. But, what is it really?
Macro View
Any utilitarian object, be in technology, philosophy or knowledge, goes through a cycle of utilization. Following are four key stages of the cycle (with examples based on technology):
Invention/Discovery – This is when the new technology is invented.
Adoption – People start adopting the new technology.
Transformation – The life of those who adopt the technology is transformed. Early stages of transformation may have an overlap with adoption. It is a very exciting period as a lot of new opportunities start to become visible.
Saturation – This is the period when there is no growth in adoptions taking place. It’s a period of stagnation. Transformation gets on to a very boring state as well and starts to either remain steady or dwindle down. This may be a very very long period.
Rejection – This is when the adoption cycle of a new technology starts to impact this old technology. People start rejecting the old and adopt the new. The only way the technology may survive beyond this stage is as a heritage.
Digital technology is no exception. It was initially invented through research in labs around the world. Then the business world saw its utilitarian value, problem-solving capacity and money-making power and pushed for its adoption through many waves of technological and business changes. Now that the digital technology is being widely adopted (and still in progress), it is transforming the life of its adopters. This is the stage when it will change everything – it will “transform” the lives of the people, the companies, and the entire civilization. In fact, we are barely scratching the surface of this phase with digital technology. Thus any organization that is transforming the lives of its customer, its employees and its partners by adoption and utilization of digital is contributing to the overall digital transformation that is changing the shape of human civilization.
Micro View
This is more at an organization level.
If I have to put a definition to clarify what is digital transformation, when considered at an organizational level, this is what I’d say – it is the aggregation of all the initiatives and changes undertaken by an organization so that it would become more digitally driven in order to better engage and satisfy its 21st century customer base.
Digital technology has been around for decades. It has been evolving over time and its adoption has seen increase over time. However, in recent years, due to the occurrence of a combination of factors such as an increased pace of technological growth and an accelerated pace of adoption, a huge number of opportunities (and threats, depending upon how you look at it) have come up. Organizations from the smallest to the largest are trying to exploit these opportunities. While some of the incumbent organizations may have taken up digital transformations only as a response to a threat, the good thing about the response in this case is that, at the end of the day the end customer will be a huge winner as a result of this. It is a progressive response, as opposed to a regressive response such as government lobbying or temporary plays of price-chocking.
As the organization undergoes a digital transformation, it overhauls its customer experience and interaction, may significantly transform its business model, optimize its operations model, change the way its employees approach work, and implement technology to drive and sustain these changes.
In future posts, we’ll look at:
Why you may need a digital transformation in your organization?
What are the key aspects of a digital transformation?
What are the key technology tools available for digital transformation?
How do you plan for a digital transformation?
Who do you need for a digital transformation?
How do you execute a digital transformation?
How do you measure success/failure of a digital transformation?
What types of results should you expect out of a digital transformation?
What do you do after a digital transformation?