You’ve probably heard of digital transformation from tech enthusiasts who proclaim it’s the future.
And in today’s post we’ll go more in-depth and define the term and discuss the issues that go along with it.
What is Digital Transformation?
Digital transformation involves a business that is using or adopting new technology or digital technologies, to change the way the Business operates.
To be explicitly clear – it isn’t ‘digital’ a.k.a digital technologies that are transforming.
Instead, ‘business’ transforms through using digital technologies.
We’ve given an example of digital transformation in our a previous blog post.
Let’s say, the Home Office UK processed Visa applications.
It then transformed its business by changing from a paper-based business model to an online or digital business model.
What the Home Office UK does hasn’t changed, but How it provides its service has
become more digitised.
They implemented scanning solutions, digital documentations and streamlined business processes to further remove paper from the process and become more ‘digital’.
What are the Problems With Digital Transformation?
A lot of businesses think digital transformation is the next big thing.
But there’s a problem, and the problem with digital transformation is two-fold:
- ‘Digital’ is the only focus by those in charge, or those leading the change.
It’s perceived that ‘because ‘digital’ is ‘transforming’ it creates a sense of urgency or panic.
Take for instance the infamous Y2K hysteria in the 1990s.
The Year 2000 bug or Millennium Bug as it was called then led to an emphasis in immediate and radical change because a lot of digital products would cease to function.
We all know how the story ended.
Although the armageddon didn’t materialise, it did instil a culture or phantom known as the ‘burning platform’ phase, which lingered around like a bad smell for the next decade or two.
You’ve probably heard of digital transformation from tech enthusiasts who proclaim it’s the future.
And in today’s post we’ll go more in-depth and define the term and discuss the issues that go along with it.
What is Digital Transformation?
Digital transformation involves a business that is using or adopting new technology or digital technologies, to change the way the Business operates.
To be explicitly clear – it isn’t ‘digital’ a.k.a digital technologies that are transforming.
Instead, ‘business’ transforms through using digital technologies.
We’ve given an example of digital transformation in our first blog post.
Let’s say, the Home Office UK processed Visa applications.
It then transformed its business by changing from a paper-based business model to an online or digital business model.
What the Home Office UK does hasn’t changed, but How it provides its service has
become more digitised.
They implemented scanning solutions, digital documentations and streamlined business processes to further remove paper from the process and become more ‘digital’.
What are the Problems With Digital Transformation?
A lot of businesses think digital transformation is the next big thing.
But there’s a problem, and the problem with digital transformation is two-fold:
- ‘Digital’ is the only focus by those in charge, or those leading the change.
It’s perceived that ‘because ‘digital’ is ‘transforming’ it creates a sense of urgency or panic.
Take for instance the infamous Y2K hysteria in the 1990s.
The Year 2000 bug or Millennium Bug as it was called then led to an emphasis in immediate and radical change because a lot of digital products would cease to function.
We all know how the story ended.
Although the armageddon didn’t materialise, it did instil a culture or phantom known as the ‘burning platform’ phase, which lingered around like a bad smell for the next decade or two.
People were constantly reminded that technology is our friend, but if not watched closely, it could also become a foe, which means everyone is focusing on it.
People were constantly reminded that technology is our friend, but if not watched closely, it could also become a foe, which means everyone is focusing on it.
While focusing on digital isn’t a bad thing, there are some aspects of the Business’ transformation that you might ignore with an overemphasis on ‘digital’.
This leads me to my second point.
2. If you focus too much on the ‘digital’, what is it you are not focusing on?
A data-driven organization is perceived as the next big thing.
Yet the Harvard Business Review found that there are critical challenges that companies must overcome before they can reap the benefits of digital transformation.
In fact: An eye-opening 77% of executives reported that business adoption of Big Data or AI initiatives remained to be a major challenge.
An eye-opening 77% of executives reported that business adoption of Big Data or AI initiatives remained to be a major challenge.
Additionally, only 7% of these executives cite technology as the challenge to adoption to digital transformation. Instead, 93% of respondents identify people and process as the key challenges.
Clearly, people and process are the biggest enablers of change – but 40.3% identify lack of organization alignment and 24% cite cultural resistance as the leading factors that contribute to the failure of digital transformation.
A similar study by New Vantage Partners 2019 Big Data and AI Executive Survey found similar results.
The study included 64 C-level technology and business executives representing very large corporations such as American Express, Ford Motor, GE, GM and Johnson & Johnson. While this a relatively small number of participants, they represented a large segment of the market, across different sectors.
The results found that 77% of those surveyed stated that although adoption of Big Data and AI initiatives remain a major challenge, 95% of the obstacles stem from people and
process.
This proves what we advocate and teach as the key to successful digital transformation…
Technology is the enabler, but the real change happens with people, and process.
Regardless of what your technical enabler or ‘digital technology’ is that you are using in the transformation of your business, if you want to transform your business, where you begin is with people and process.
Hope you found that helpful. Let me know in the comments below and what you would like to see next. Thank you for reading this!
Sincerely,
Heath Gascoigne
P.S. If you want to join our Business Transformator community of like-minded Business Transformators, join the community on the Business Transformator Facebook Group here.
P.P.S. If you want to learn more about business transformation, check out The Business Transformation Playbook here.
