Do you (erroneously) think you’re going through Digital Transformation?
As a digital strategy consultant, I spend a lot of time helping clients create processes to convert existing practices into more up-to-date ones, utilising cutting-edge technology and increasing the value they can deliver through digital means. Digital transformation is one of those catch-all phrases that can sometimes lose meaning and become a bit of a buzzword. However, it really is a journey that all mature organisations need to embark upon to become a digitally proficient company. Amongst other reasons, this is so important to keep up with the pace of change. Either a competitor is going innovate and blow you out of the water or if the whole industry refuses to evolve, someone will come and disrupt it. In both scenarios, the digitally proficient organisation comes out on top and the stagnant one falls away.
But not every company is ready for digital transformation. At some point, yes, they will need it. But there are pre-conditions. Digital transformation sits on a continuum that requires digitisation followed by digitalisation before being able to transform across the organisation and reach the pinnacle of being digitally proficient. Trying to go through digital transformation without being digitised or digitalised is akin to starting a road trip with no car, money or navigation — you may know where you want to get to but you don’t have the basics to begin the journey.
Furthermore, with a variety of definitions, some companies think that they are going through digital transformation processes when in fact they are merely treading water.
So with digital transformation being the right next step for some organisations, what are the milestones on the continuum that lead to that point and where is your organisation?
Digitisation (D1)
Some industries still rely on analogue data and are miles away from being able to rely on digital information. Digitisation is the process of converting those organisations from antiquated processes to primarily digital formats. This can be anything from images and videos to text and documents. It is important to maintain the integrity of the information but create digital versions of everything in a structured and searchable way. This phase may also include changing how new information will be input and stored e.g. creating digital forms and online databases. The information should be more easily accessible than analogue formats but not lose quality. Digitisation does not fundamentally change how the business operates and may even temporarily slow some operations while the change is happening. However, post-digitisation, the organisation will be prepared to enter the digitalisation phase which will have a huge upside.
Digitalisation (D2)
D2 follows naturally from D1 using the infrastructure created by moving from analogue to digital formats of data. This phase focuses on simplifying and automating basic tasks and supporting decision-making using data. D2’s aim is to improve efficiency and reduce costs often done through improving workflows, enhancing communication and simplification of business processes.
A platform that allows employees to send customers forms, receive that information in a structured way and then go on to search, analyse, and interact will be an example of digitisation. Without D1, this D2 programme would not be possible as there would be no infrastructure to support the processing of data. Now that all information is in digital formats, this program streamlines the work for both employees and customers, decreases time required from both sides, increases efficiency, reduces errors and other lower-level improvements.
This is where many companies feel their digital transformation journey begins and ends. Implementing new processes and tools to improve efficiency and reduce costs are certainly worthwhile endeavours. They are central to preparing your organisation for digital transformation, but this is not the process of digital transformation. With efficiency and costs reduction as the central outcomes of this phase of the process, the primary benefits of digital transformation are being left on the table.
Digital Transformation (Dx)
So what is Dx? Digital Transformation is a holistic, end to end rethinking of how an organisation can utilise technology, people and processes to innovate, create additional value and revolutionise business performance. Dx addresses the entire operations of the organisation and applies a digital focus on its strategic objectives, ensuring that everything from culture to technology is able to meet and continue to meet the rapidly changing landscape of market expectations.
This could mean new business models, additional revenue streams, enhanced customer interaction, increased employee engagement and new value creation and applies across an entire organisation. Dx takes a company that has achieved D2 to the next level, not just implementing existing tools or a change in process but enables them to take advantage of cutting-edge technology and even positions them to innovate technology themselves. The business objectives through digital transformation are beyond efficiency and cost reduction and extend into enhancing competitive advantage and maximising end-user value.
With such radical change, there is emphasis on adopting this new mindset which reaches into the business culture from decision-making to employee engagement. A great example of this is within the NHS (National Health System) in the UK. Digitising (D1) moves the organisation from hand-written patient notes and records, to a digital database for patient records. Digitalisation (D2) creates a patient passport where medical professionals are able to search quickly for information about patient information, communicate remotely and share information with other departments. Digital transformation (Dx) would see the NHS take advantage of IoT devices for pre-emptive action (imagine getting a call from the doctor to ask you to come in because you are going to have a heart attack in 24 hours), AI for low-risk patient interaction or blockchain for managing sensitive records.
Furthermore, Dx doesn’t just ready an organisation to adopt the latest trends in technology. Rather, it prepares the processes and culture at an organisation to adopt whatever technology is coming next, and even positions the organisation to innovate it’s own because the focus is beyond efficiency and everyone is aligned on utilising technology for strategic outcomes.
Beyond Digital Transformation
Dx is a journey, and every journey must have a destination. The destination of Dx has to be Digitial Proficiency, where the mindset is digital-first, continuous improvement is factored into every decision and a culture of innovation presides. At Digital Proficiency, an organisation can adapt easily to changes in the market, new problems and new technologies. Customer needs are clearly understood, even as they change as data is quickly gathered, processed and understood, providing meaningful insights that present opportunities for advantageous outcomes. Both speed and accuracy of execution reign supreme and the organisation and their customers benefit from great value creation. Each stage of this digital journey enables the following stage to occur. Only by reaching digital proficiency will an organisation be able to unlock the operational advantages of the whole continuum. Ensure that you don’t stop at digitalisation as you will always be chasing the next technology and will lag behind those who are better prepared. Continue through digital transformation and achieve full proficiency, and you will always adapt to whatever comes next.
