Digital Transformation is a popular buzz phrase, especially over the last few years. What many forget however, is that the term has actually been around since the late 90’s. Back then, it centered around computerizing traditionally pen-and-paper processes. Today, it’s about mobility and cloud services, and tomorrow, it could be artificial intelligence and blockchain. The bottom line is that this change has been underway for decades.
Some could argue that the term, “Digital Transformation” is on the verge of becoming trite, so it’s important to understand what it truly means. On a functional level, we can define it as replacing analog with digital solutions in order to make them more efficient. However, the implications of these changes are much larger. As the name suggests, Digital Transformation fundamentally changes the way a business operates. How they collect, store, and leverage information becomes entirely different, and so too does the way they deliver value to the customer. The impact of these changes cannot be overstated.
While Digital Transformation is far from new, it’s been greatly accelerated by two recent events:
The Consumerization of IT increasing reliance on digital platforms
The early 2010’s saw significantly increased capabilities and availability of smartphones and other smart consumer devices. Employees’ personal devices could match, if not exceed, the functionality of those provisioned by their employers. As a result, they were enabled to work wherever and however they felt most comfortable. This exponentially raised expectations for enterprise IT. Corporate-issue devices had to at least meet the rapidly evolving standards of consumer technology.
However, this aspect of digital transformation wasn’t just about giving every employee a smartphone or other mobile device. Digital technology was fundamentally changing the way people lived their lives, and companies had to adapt the workplace in kind. Networks had to become more robust, information had to be organized and readily available across multiple devices, and instant communication had to become commonplace. Digital platforms became the glue that held businesses together.
The Pandemic testing the capabilities of IT infrastructures
The pandemic halted in-person operations across industries for a prolonged period of time. Businesses were forced to take a look at how to remain competitive, not only from a customer and revenue standpoint, but also from an organizational perspective.
According to CIO.com retail giants had to turn their businesses upside down to transform to stay afloat, switching to online ordering systems, contactless operations, and cloud technologies. Enterprise businesses had to reprioritize or even recreate their IT roadmaps, adopting cloud solutions for online collaboration for remote workforces, analytics tools to understand how devices are being used, and machine learning to understand how to best manage supply chain changes. Companies that had already undergone or begun their digital transformation were better prepared to handle the rapidly evolving circumstances of the pandemic.
These events only reinforced what many leaders already knew: Digital Transformation is crucial to remaining competitive and adaptable to changes in the market.
Digital Transformation isn’t optional, so you have to get it right
Digital Transformation isn’t a cure-all to organizational issues, but to ignore it or undervalue its importance would be a critical mistake. Transformation is inevitable, and has happened throughout the history of business. After all, you wouldn’t look back and say it made business sense to resist the Industrial Revolution. It just so happens that our Revolution is digital.
However, it’s not without its fair share of risk. In fact, many digital transformation initiatives are failing. The potential pitfalls are numerous: lack of up-front commitment, change fatigue, and lack of resources to scale, to name just a few. Many projects stall out, ending up in “pilot purgatory”, unable to scale and provide any real benefit. Merely enacting a change initiative isn’t enough to have a successful Digital Transformation; it takes careful planning, unified leadership, and ongoing management.
Despite these risks, Digital Transformation isn’t something you can avoid. It’s a fact, not a fad.