What is Digital Transformation?

February 8, 2022 - 5 minutes read

Digital Transformation is a phrase often heard, and many times even acted upon, but seldom understood in business today. A The 2014 State of Digital Transformation report by Brian Solis drives this point home, stating: “Only one-quarter of the companies we surveyed have a clear understanding of new and underperforming digital touchpoints, yet 88% of the same cohort reports that they are undergoing digital transformation efforts.” A full 2 years later, googling the phrase “Digital Transformation” yields relatively few relevant hits that are mostly clustered around the same 3-5 thought leaders in the Digital Transformation space.

Wikipedia defines it simply as the changes associated with the application of digital technology in all aspects of human society, and later boils it down to the concept of going paperless. This definition and the going paperless analogy, while not technically incorrect, omit much of the transformative value of Digital Transformation; doing the same business the same way, only using digital tools to do it, is not really Digital Transformation. Wikipedia does reference a few of the better reports and articles on the topic, most notably the 2015 MIT Sloan Management Review and Deloitte study.

The 2014 Solis report above has a much better definition: “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”. Now we’re getting somewhere transformative.

Digital Transformation is not just about doing things the same way with new technology, but instead is about using the new technologies in visionary ways to change the way business is done. As you might infer from the Solis definition, Customer Experience is one of the key components of any Digital Transformation initiative. Investing in new technologies is not Digital Transformation, although it is a necessary part.

Technology, and investment in newer technologies, is an enabler of Digital Transformation, but it is not sufficiently transformative by itself. The vision of how the new technology can be used, and a clear strategy of how to get there, is where the transformation comes into play. Vision and strategy must then be combined with leadership to drive the transformation along with a culture that embraces the journey.

Throughout recent history there have been many examples of the difference between using technology to keep doing business the same way and transforming the way business was done. Blockbuster implemented new technology into their business while Netflix transformed the movie rental business.

In my own personal life, there is an example of  “going paperless” while not gaining an ounce of transformation from that process. In the fairly recent past, I needed to fill out some HR forms for onboarding with a new company. I was excited when I heard that they forms would all be online and digitally signed, but that excitement quickly waned when I found that each form was just a digital representation of a paper form. I had to type my name, address, and other details repeatedly on each form. Instead, if the company had done gone to online forms with digital signatures as part of a Digital Transformation initiative, I could have entered all of my details once at the beginning of the process. It then could have been automatically placed on each form where necessary, saving at least 50% of the time it took to fill out the onboarding forms, and I could have just reviewed each one for accuracy and digitally signed them.

Even this is an overly simplified example of Digital Transformation with a very limited scope. Upcoming blogs will go deeper into the technologies most likely to be involved in Digital Transformation initiatives, implementation tips, and more examples of initiatives that were truly transformative for the organizations that implemented them.

Published on July 17, 2016