What Digital Transformation Is and What It Is Not

Digital transformation is one of those buzzwords you hear at conferences or read about in industry publications. Companies and executives try to impress their colleagues or outdo their competitors by touting digital transformation initiatives. The problem is, very few people know what digital transformation means in terms of both the literal definition and what it could mean for the future of their business. Let’s cut through the hype and marketing-speak and simplify what digital transformation is and is not.

Digital Transformation Defined
Digital transformation goes beyond replacing Excel spreadsheets with a robust database, automating manual processes, or migrating from legacy infrastructure to modern tools and applications.

In fact, digital transformation is more of a strategic business concept than a technology concept.

Digital transformation is the process of rethinking and adapting business culture, strategy, processes and operations in a way that takes full advantage of technology. Rather than simply replacing old with new, you weave technology into everything you do to improve performance and optimize the customer experience.

Digital Transformation Does Not Equal Disruption
Understandably, the definition can send shivers down the spines of all employees, from senior management on down. They assume digital transformation means massive investments and a whole new way of doing things. It’s a giant disruption and an even bigger headache.

Some areas of your business may be ripe for disruption in order to identify new revenue streams and implement new business models. However, digital transformation is much more likely to be incremental and, therefore, minimally disruptive.

Transformation in any area of your business doesn’t happen overnight. Attempting to make wholesale changes to critical technology and systems is a risky proposition because these changes might require new skills, new processes, and a cultural shift. If you try to do too much too quickly and don’t have your ducks in a row, transformation could be disastrous.

Digital transformation succeeds when approached strategically in phases over a period of several years, starting with those areas of your organization where transformation will deliver the most business value. Incremental change with careful evaluation and integration of business models, processes and technology, along with employee training, will help you minimize both risk and disruption.

The Customer, Not Technology, Is the Focus
While technology change – migration to the cloud, use of advanced analytics to improve decision-making, etc. – is obviously part of digital transformation, the primary focus is the customer. More specifically, how can you add value to every customer interaction to deliver the best possible customer experience?

Think in terms of how it can improve service delivery and adapt those services, making them more personalized, relevant and useful. Or, ask yourself, how can technology provide the agility and flexibility to adapt to evolving customer needs and market conditions? How can you make each customer interaction easier, more seamless, and more convenient? How can you use technology to automate repetitive, low-value tasks so your employees can focus on more complex tasks that better serve the customer?

The Right Expertise Is Critical
Once understood and recognized for its true purpose and value, small to midsize businesses will likely embrace digital transformation. Adopting the right mindset and approach and focus on customer rention. Unfortunately, few have the in-house expertise to develop and implement a multi-year digital transformation strategy. While digital transformation doesn’t have to be disruptive, it is indeed a complex process.

Expertise and guidance are critical to success in identifying business processes that can benefit from transformation, evaluating the technology, and understanding how to incrementally implement transformative tools and technology. A focus on customer needs, vendor guidance, strategy and patience are your keys to success.

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