What is Digital Transformation?

Everyone is talking about digital transformation: the news are filled with data and stats around massive investments in digital technology and in the need to transform businesses.

The IDC report 2017 estimates that worldwide spending on digital transformation technologies will grow to more than $2.1 trillion in 2019, while a Forrester study says that 57% of organisations say that implementing key digital technologies is critical to enabling their digital business. Nevertheless a Sloan Review Survey shows that respondents rated “current IT systems” as the third biggest obstacle to achieving digital transformation.

The relation between digital, IT systems, and digital transformation is still blurred in most cases. Today digital transformation is far too often confused with Digitalization or with Digitization with a strong focus on technologies or platform. In many cases, organisations still believe that digital transformation is achieved by implementing a single platform that could magically transform the whole organisation.

Unfortunately that is wrong and it’s misleading.

Because Digital transformation is not about technologies: it’s about transforming the whole organisation through a system thinking approach and it’s about rethinking operational models, business models, processes, and policies, taking people, both employees and customers at the core of the process.

Because the goal of any digital transformation is to increase value creation for the business through digitally enhanced processes that increase internal efficiency and overall customer and employee satisfaction.

Digital transformation is en emergent need in today’s post-industrial society: we moved fast from an industrial to a post-industrial era, however operational models and management practices haven’t evolved fast enough.
For this reason, many organisations prefer to think of Digital transformation as the adoption of digital technologies on the top of mainly inefficient and obsolete operational models, rather than facing a true in depth transformation that begins with understanding the current culture, the customers, and the overall business.

Digital Transformation is about people, it’s about processes, operational models, business models, leadership, customer experience, employee experience.

There’s much more to digital transformation than technology — it’s about abandoning old industrial business and management models to embrace new ways of thinking and new ways of working to create value through the creation of valuable relationships. These relationships are multifaceted and multidimensional: good inner relationships within the organisation, supported by appropriate operational models and processes enhance the outer relationship with customers.

To achieve a real transformation, the company’s buy in is key: for this reason, understanding the organisation’s culture, aspirations, and current experience at all levels becomes key to efficiently manage change.

To manage change effectively, everyone needs to be involved from the early stages and everyone needs to feel they are part of the change.

For this reason, a model like the Competing Values Framework and the OCAI survey are essential tools to manage and lead change successfully: if everyone’s voice is heard, if everyone feels they are part of the change and are listened to, change will happen with the internal support by everyone.

These slides, were presented to students from IIM (india) at ESPC London on July 27th 2017 with the goal to provide tomorrow’s digital leaders a broad vision of what is digital transformation by looking at what and the reasons why change is happening in the business world, define Digital transformation and its dimensions through the lenses of an Experience economy and a post-industrial era. The presentation also presents the Competing Value Framework as a key tool to start understanding organsation’s culture and define a digital transformation roadmap and strategy.
Author mentioned (and inspirers):
– Daniel Bell (the post-industrial society)
– Joe Pine (Experience Economy
– The ClueTrain Manifesto
– Quinn and Cameron’s Competing design framework
– Brian Solis
– Nichola Negroponte