Digital Transformation has become one of the more recent ‘must haves’ in buzzword bingo. The phrase is so heavily used by organisations looking to make the most out of this trend, but what does it actually mean?
Simply put, digital transformation is the “integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers"1.
This statement can be divided into three key points.
Integration of Digital Technology
Firstly, the "integration of digital technology". Integrating technology into a business requires planning. It's all too easy to think in terms of your current digital systems and processes and what might be possible within this. Therefore a vital step in integrating any digital technology is a detailed analysis phase.
In addition, getting staff to 'buy-in' to the idea of integrating new technology may also be a challenge, as it will bring significant change to the organisation. Although this change may be positive, it brings with it a degree of disruption and requires everyone to understand the benefit. At the same time, there needs to be a commitment to the integration and to understanding and embracing new ways of working.
Into All Areas of a Business
The second element in this definition is crucial: "...into all areas of a business". This not only means giving consideration to each department and function, but also considering how it all links together. To create a true digital transformation, your software has to be joined up.
Take a typical sales journey for example:
- Marketing teams bring in a new lead — let's say this is for a custom built desk
- Sales teams need access to all the lead information to make the sale
- BUT the customer wants to know when the item will be ready. And this depends on whether the warehouse has all the componants in stock
- The sales person needs quick, real time access to this information or they risk losing the sale
- Order confirmed. Now the assembly teams need a full spec of the item ordered
- And the stock levels need to be adjusted straight away (preferably automatically)
- And the sale needs to be processed by the accounts team and an invoice sent to the customer (using their company details collected by the sales or marketing teams)
The point here is that it's not enough to have a good sales system, a good stock control system and a good accounting system etc. It all has to work together. It's these transfers of data between teams and departments that are a crucial point in digital transformation projects.
Change How You Operate and Deliver Value
The final element in the definition of digital transformation is that it must "change how you operate and deliver value". The whole point of taking on a digital transformation project within your organisation is the end result. The actual business benefits. The project must improve how the business operates, whether the goal is to drive more sales, or increase efficiency — this should be a measurable target. Start with a business case for digital transformation projects with clear measurements to show the value that will be added.
So, why is everyone talking about digital transformation? Because it's changing our attitudes towards how technology is implemented. The project centres around one core question: what are we trying to achieve? It's not about having the newest, shiniest tech or AI, machine learning and cloud software. It's simply about identifying and implementing the right tool to achieve your desired outcome.