Digital Transformation being a top priority for enterprises is a no-brainer. There is enough and more evidence that proves that most of the enterprise conversations today veer towards digital transformation. While this is expected since enterprises do need it but the fact is, most of these talking and doing subsumes almost entire ‘going digital’ into technology transformation. This, at Greyhound Research, we believe needs calling out.
A peek under the lid can tell you that most of these so-called Digital Transformation initiatives are what we can call digitization projects, i.e. implementation of digital technologies. A few years back, anything in SMAC umbrella would be termed as digital. Now, this umbrella of digital technologies encompasses the even wider gamut of new age tech – such as AI, machine learning, IoT, AR, VR, and so on.
But the question to ask is – how much of this is really digital transformation?
A majority of this Digital Transformation wave is driven by how vendors position their offerings. Depending on who the vendor in question is, a technology equivalent (Cloud, Social, Mobile, Analytics, IoT, CRM, Supply Chain, you name it) is positioned and sold as digital. Even the traditional servers and workstations have been rebadged and are being piped under the glossy marketing material with Digital Transformation printed all over them.
While that is what vendors have to do to sell their offerings, it’s critical for technology decision makers to understand just how much of digital does a technology constituent enable, and what more and how much more needs to be done for an enterprise to be truly digital.
The truth is that a majority of these programs termed as Digital Transformation are merely an implementation of a new technology. In the good old days, some of these projects would be plainly referred to as technology refresh. So, if Digital Transformation is not about technology transformation, then what is it? What does “Going Digital” really mean?
Greyhound Research believes that Digital Transformation is not about technology alone. A digital initiative is really about transformative business models and morphing of the DNA of an enterprise. A truly Digital Transformation initiative goes beyond digital technologies and involves transformation around the business model, people and processes along with technology. This transformation should result in outcomes in form of customer-centric delivery models. As per Greyhound, here are the three tenets/pillars of digital transformation.
Business Transformation
The most transformative form of digital is a business that rethinks and reimagines itself, including the possibility of disrupting itself. In simpler terms, the business model has to be rethought. For instance, it’s one thing to extend retail to include web and mobile channels, and altogether different to think customer first and find ways to create an omnichannel enterprise that navigates and delivers the best experience, every single time, connecting the entire supply chain digitally. The former is a sales expansion strategy and the latter is a truly transformed digital business model.
Technology Transformation
Inducting new technologies needs to consider the business outcomes that derive from business transformation and not the other way around. Is adding a new mobile app digital, just for being a mobility program? Is a social media channel activation digital? Is it enough to equip a manufacturing plant with sensors and devices to measure and track the performance of machines? Unless the technology implementation transforms the way enterprise functions and the way people work and deliver outcomes that are transformative, it is same old technology refresh that technology world has been doing for ages.
Talent Transformation
The way people work has to transform. Not only that, there’s much more to Digital Transformation than people getting acquainted with new technologies, or getting trained for web or mobile initiatives, or getting equipped with gadgets for channel expansion or field force productivity. Transforming people is one of the hardest, but the most disruptive pillar of digital transformation. No organization is more digital than the one that “thinks” digital. And, thinking is something that people do.
So, next time a vendor tells you that a technology will make you digital, think twice, think hard, and go back to the drawing board. The truth is that Digital Transformation should not be signified by mere digitization or technology implementation. Digital is about the business model and DNA of the organization, and not so much about technology.
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Analyst:
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.
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