The Hard Part of Digital Transformation Is Not Digital.
Learn why you need people to make the digital revolution
Digital transformation sounds like a siren. It is a very attractive concept and everybody falls in love at first look. As a consultant, we must embrace this concept and apply it to the reality that’s often a little bit different from what we read into books. As an entrepreneur, we need to listen to all the siren to find the right one that can elevate our business. Tha’s why digital transformation, digital innovation, and cloud transformation are concepts so dear to us.
Looking outside of our company window we will see a lot of friends coming to us to help in digital transformation. Cloud vendors, DXP solutions and thousand of tools are there to make transformation possible. Anyway, we need to fight the harder enemy. Ourself. Maybe not you, not the CEO, not the CIO and so on… but in every company, you will find somebody that didn’t embrace the change. Somebody that listens and says “Yes, you are right” bu then, back to his desk, come back doing things in the old way.
During my working bring progress to many companies and I helped IT to create processes and tools to implement digital transformation. What I learn from this is that the harder part of this process is not the digital one. You may have the best tool and the most performant source code into the universe, but in the end, you need to convince people and bring them on board. That’s the harder part: the transformation.
First issue: what is the digital transformation?
The question may seem easy for everybody, but it is not so much. Have you heard about digital transformation? And digital innovation? It is the same? Well, innovation and transformation are often used synonymously, but refers to two different things. Innovation is what you want to reach. Assuming that you didn’t have the innovation yet, you will start a process to transform your business to digital. That journey is the (digital) transformation to reach the (digital) innovation. Basically, technologies enable a transformation process that can improve the business by innovating it in many ways. That’s easy, but let's go deeper into it.
What enables the digital transformation?
MIT Sloan Management Review tells that digital transformation is supported by three pillars:
- Customer Experience
- Operative Processes
- Business Model
Who is the most important keyword for a company? Probably “Sell”. But to sell you need somebody that buys. That’s why nowadays most innovative companies put all the focus on the customer and try to improve the customer experience. Inside digital transformation, the customer experience is enriched by customer insight and a set of commodities enabled by the new technology. Just think of the experience of buying on Amazon or the customer journey for innovative e-shops. Digital innovation can improve the customer experience by:
- Custom experience, tailored near to the consumer habits and optimized for the channel
- Smart products, adding technology to classic ones. Image your smartwatch where the new technologies enhanced the product and bring you to buy a new one each year.
- Get data from each channel, each point of contact with the user and put together, in full respect of privacy, to deliver to the user the best possible experience
Somebody thinks that digital transformation is simply to do one new e-commerce, more attractive than the previous one. False. Digital transformation is not only on the skin. You can change the way you present your product thousand of times but this is not a big change. The change is when you bring value to the customer creating a better customer journey when you help him to buy the best product for his needs. In this process, digital technologies have a big role. They can offer many tools that make the company more efficient to manage customer request and offers a smarter way to interact with the customer.
Most of the company standalone for decades and already works (by design, if they are not out of business yet). How we can improve our company processes?
- break down the wall between silos inside the company and letting data flow. If such data will be also delivered in a rational way like using an ESB or an API gateway, you have won.
- Automating manual processes where there isn’t any real human contribution.
- Avoid paper. Saving trees should be yet a good reason, think also to the improvement in your processes.
- Data Analysis. Data is the new petrol. You have it into your servers and you need now to pull out and start consuming it.
- Stay on the cloud. Providers like Google Cloud, Amazon, AWS or Azure can make the difference.
Weather changes, people changes, consumer changes. The only certainty in this world is the change. To support this change and not remain behind to the competitors we need to adapt our business model. Human species is here because of their adaption attitude. Well, business is the same. It is easy for a startup that starts from scratch and bases its business on the current customer need, but it is harder for old companies that rely on legacy business models.
That’s why each company needs the digital innovation lever to get the best opportunity for its business model. It can be that a retail-based company will open e-commerce, or that a manufactory one put some electronics tools on its product that allow asking a recurring monthly fee.
Generally speaking what are new business models that we can add to our business?
- Expand your opportunities using new crowdfunding platforms
- Make your market global, with e-commerce
- Evolve your product, introducing some elements that bring the user to buy them again
- Add some intangible value, like customer service, software or updates. This creates a link to the customer and makes recurring incoming
- Use digital technologies to create new services related to your main business.
The digital innovation is not digital
The most common mistake is to think that digital transformation is technology. False. Technology is the tool. Doing it just because it is cool is like turn on the light when the sun is hight just because somebody told that you can have light even if it is dark. We need technology like we need artificial light, but have to be used in the right moment and with a purpose.
Digital innovation and technologies open invaluable opportunities for companies, but managers are able to grab them?
If the companies will understand clearly the options allowed by the technology and the need (internal or external) any spend on IT improvement will be seen as a pure investment.
The matter is that often people inside the company didn’t embrace the change or manager are not able to fine-tune the goals so they spend a lot of money getting back a few results.
Spending hundreds of thousands of dollars to change the skin to e-commerce when you are still selling SMS in the whats’up the world is non-sense.
To become competitive, companies should understand at which point they are on digital transformation and design the path until the target. This is not easy, that’s why they need to engage the right consultant.
Even if nobody has the crystal ball, what you will need for sure to minimize the risk is:
- Vision: you must know where to go, otherwise stay at home
- Money: digital transformation is not free. You need fuel to go far
- Strategy: technology is useless without a goal
- Governance: the digital transformation process is not easy and needs a leader. Somebody that everyday looks if things are done.
- Break down the walls: Before break down the technology silos you need to make offices speaking one each other, starting from IT
- Partner: if you what to complete the journey to digital innovation you need a set of professional that helps you. Most of the competence is vertical and a company cannot learn all technologies, moreover, time to market is fundamental. If you want to go far… you need to go together.