The common myths of Digital Transformation
Traditionally, in non-technical and non-digital companies, the adoption of technology has primarily been confined to the IT teams. Even today, when discussing “Digital Transformation,” numerous companies fail to grasp its full scope. My understanding of Digital Transformation underwent a significant shift after delving into multiple articles on the subject. Below, I aim to dispel six myths associated with this term.
Myth#1 : Digital Transformation is about digitization
Many times, people and companies confuse digital transformation with the digitization and automation of manual workflows within a firm. That’s a very myopic view of looking at digital transformation. The true power of digital transformation lies in harnessing the data and information that a firm possesses about its customers, employees, suppliers, and processes. This involves channelizing the data through the right automated systems, including software, artificial intelligence, and machine learning, and driving innovation across the organization. It’s about democratizing access to data and software/systems to process the data and generate innovative outcomes.
In my role as a Software Engineer, one example I have witnessed in some of the companies I’ve worked for involves channelizing data around the usage patterns of the software by the users. By enabling deep analytics on top of this data, we can discern which product features are utilized most frequently and identify user pain points through drop-off analysis. This provides an opportunity to refine the product workflows to better suit the users’ needs.
Myth#2 : Digital Transformation has nothing to do with innovation
People often perceive digital transformation and innovation as two distinct activities within an organization. However, at the mature stage of digital transformation, it possesses the power to democratize and enhance the culture of innovation across the entire organization, spanning all functions, and not limited to the R&D unit alone. For instance, through advanced analytics and machine learning applied to marketing and sales data, business teams can thoroughly overhaul their marketing and lead generation processes, thereby creating a robust and effective sales funnel.
Myth#3 : Digital Transformation is all about Technology
Technology constitutes just one facet of the complete digital transformation journey for an organization. It must be adequately complemented by people, processes, and effective management. A conducive culture needs to be instilled within the organization, ensuring that individuals comprehend the significance of data and signals emanating from various sources. Moreover, having the appropriate set of tools and algorithms in place is crucial to swiftly derive insights from the available data.
Myth#4 : Digital Transformation has no value for non-IT and non-Digital companies
In one of the articles I read, I discovered how an elevator manufacturing company embarked on a digital transformation journey, incorporating Internet of Things (IoT) principles and implementation. They introduced the emission of real-time telemetry signals to remote servers, achieving high levels of operational efficiency through data utilization. By analyzing these signals with automated machine learning algorithms, the system could autonomously identify elevators in need of servicing and schedule maintenance. Technicians servicing the elevators could input real-time fault information into the system, providing valuable feedback to refine the quality of components in the manufacturing process. This serves as an excellent example of how non-IT and non-digital companies can effectively embrace digital transformation to enhance innovation and operational excellence.
Myth#5 : Digital Transformation is a Strategy
Digital transformation can serve as a vehicle for executing a strategy, but it cannot be considered a strategy in and of itself. Strategy involves identifying problems and determining what needs to be done at the organizational level to achieve established goals. While digital transformation aids in goal achievement and facilitates the implementation of a strategy, it should not be misinterpreted as the overarching corporate or business strategy for the organization.
Myth#6 : Digital Transformation is expensive, to the extent that only big companies can afford it
It might be mistakenly assumed that digital transformation in a company occurs in a top-down fashion, and only large, financially robust companies can afford to undertake it. I believe digital transformation is more of a mindset and a cultural shift within the organization. It demands a shift in mindset at every level of the organization to initiate the digital transformation journey. It can commence with a mid-level employee who is passionate about aggregating data from various sources, harnessing its potential, and refining solutions through advanced analytics and AI applications on this data.
Motivation
- Iansiti and Nadella, “Democratizing Transformation”, 2022, Harvard Business Review
- Bonnet and Westerman, “The New Elements of Digital Transformation”, 2021, MIT Sloan Management Review.
- Neeley and Leonardi, “Developing a Digital Mindset”, 2022, Harvard Business Review
- Leonardi, “You’re going Digital — Now What”, 2020, MIT Sloan Management Review
