Digital transformation has been a popular buzzphrase for years now, but a clear definition of the term is hard to come by. Some organisations see it as a technological disruption, others as more of a shift in a culture that just so happens to use some digital tools. Let’s try and break down the jargon…
First, what does it mean?
Digital transformation is used to refer to two quite different things, which is where some of the confusion arises. In organisations which are taking their first steps away from a traditional model, talking about ‘digital transformation’ will usually mean talking about a case where a specific technology was used to address a specific pain point or improve a specific metric, such as customer satisfaction.
In organisations with a more developed digital strategy, “digital transformation” means an ongoing, iterative approach to new technology be that a device or an app, designed to encourage innovation and ensure that organisations take advantage of emerging technologies more effectively than their competitors do. This is not a standalone IT policy, but a company-wide culture designed to allow constant refinement of business processes and practices, instead of a stop-and-start approach to change.
Why two definitions?
Typically, one leads to the other. It’s pretty universally agreed that in a more digitally developed company, transformation itself becomes a driver. The company is constantly on the lookout for new and emerging technologies, encourages experimentation and innovation, and plans ahead of its current capabilities so that when new technology emerges, they are in prime position to take advantage of it before, and to a greater effect than, their competitors. IT development is a constant, iterative process rather than a four year refresh cycle with an accompanying plan, and is closely linked to workplace culture and user experience. Leaders actively encourage this ongoing change, and employees are given ready access to training and support.
However, if you’re at the start of your digital journey, selling the concept to your workforce can be challenging. Everyone understands why having a mobile device with email, calendar and contacts is more efficient than carrying round the paper equivalent, but devices like iPad and iPhone are capable of much more than that. It can sometimes be difficult to move employees out of the comfort zone and get them to explore use cases that don’t have a direct analogue equivalent.
Many organisations begin by trying something concrete, with a measurable ROI (the specific technology that addresses the specific pain point mentioned in definition one). Once stakeholders see the benefit of one or two iterative changes, it’s far easier to engage them in conversations about wider change, and to shift the culture of the organisation closer to the kind of constant transformation that’s necessary if you want to keep pace with technology.
What are my current drivers, then?
In our experience, there are three main drivers for organisations that begin the journey to digital transformation: wanting to improve their customer journey, the desire to improve internal systems, and the need to update their business model to stay competitive.
Identifying a specific problem in one of these areas and trialling a project to fix it is a good way to make the business case for digital transformation.
Let’s say, for example, that a retailer wants to move away from your usual, impersonal sales interactions and toward clientelling. Equipping sales assistants with an app comparable to your customer-facing app. This allows them to view their customers’ purchase histories, including items they’ve abandoned in online baskets and any out of stock items they have expressed an interest in. They can then make personalised recommendations based on this purchase history, alert the customer to any new stock, and cross- and up-sell customers. If you have a customer-facing app, assistants can send personalised alerts to this app. Once your assistants have devices in hand, it’s a short step to equip them with an mPOS solution so that they can take payment from customers as soon as they’re ready, rather than asking customers to queue.
In the vast majority of cases, there will already be an off the shelf app that tackles the issue you’re trying to address. Alternatively, consider developing a custom solution (which gives you the added advantage of on-demand, iterative development, the pace of which is not dictated by a third party).
So I just give everyone an iPad?
No (although we would be very happy to sell you iPads).
The bulk of evidence suggests that leading with strategy is key to the success of digital transformation. You need to know what you’re going to try first, what evidence you hope to gather and how that will be implemented. You need to have visible C-level support for change, and a strategy for encouraging adoption (for example, retailers have effectively used a league table model to gamify training, with prizes for the ‘best trained’ store, in order to ensure people access and use digital resources). Because the changes involved in digital transformation are often drastic, it’s important that leaders are able to articulate their purpose to employees and speak with authority about the technology introduced and the cultural change that comes with it.
Do I have to become a technical expert?
No again. While it’s important that you have the requisite expertise somewhere in your organisation, top level stakeholders just need to be able to use the solutions that are introduced visibly and fluently. Having leaders publicly endorse new systems by actively engaging with them (sharing files, responding to comments, liking employee posts; visibly using the new system for whatever task it supports) is more valuable for driving adoption than having a board who all have a complete technical understanding of the solution.
Is this going to be expensive?
There is almost always an initial outlay – even if you already have all the hardware you need, you’ll still need to pay for software licences or development time.
However, giving people the best tools to do their job will increase efficiency and productivity. Employees want to work with forward-looking companies that are leaders in the field, so attracting and retaining the top talent will become easier. And most importantly of all, there’s no way you can stick to your standard issue four year refresh cycle and fixed IT shopping list without falling drastically behind the times and losing touch with your customers. Technology changes so rapidly nowadays that failing to innovate doesn’t mean you stand still, it means you actively lose ground to competitors.
How do I find out more?
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