Every few years, a buzzphrase crops up that systematically informs industry, trade and market publications, and industry and association conferences. Digital Transformation or Dx has recently garnered attention and become that ubiquitous buzzphrase.
This blog will explore what Digital Transformation is and is not and is solely focused on the business environment. Digital Transformation occurs when an organization successfully exploits digital technologies, its processes, its core capabilities, and its enterprise culture to create a rich digital business model that will advance the interests and success of the business. When considered in a broader sense, beyond the walls of the enterprise, digital transformation integrates digital technology into society, cultures, and all aspects of consumer and social life.
But, what does that mean, exactly? How can we bring the concept into the real world for a business to consider? The definition of Digital Transformation as noted above must include a review and appropriate modification of businesses’ processes, business models, operations, team collaboration, and customer relationships. Digital Transformation cannot be achieved by simply applying technology to a problem or opportunity. It must build on technology and the use of digital tools and processes to engage, enable, and empower teams, suppliers, stakeholders, customers, and partners.
From the strategic perspective, a business executive or manager might conclude that the concept of Digital Transformation as defined here is too expensive, time-consuming, and daunting to consider, especially for a small or medium-sized business, but that would be a mistake. A properly structured Dx initiative will prepare the organization for the ever-changing business environment and make the business and its team members more nimble, and capable of responding to change. The initiative, once employed, will provide many benefits to offset the efforts involved in completing the initiative.
If a business wishes to further explore the term and the concept of Digital Transformation with the intention of initiating such a program within the enterprise, it is crucial to first understand the boundaries of Digital Transformation. Businesses can go astray by making assumptions about what Dx is and becoming distracted by tasks, activities, and processes that are not relevant while ignoring critical areas that need attention.
The ABCs of Digital Transformation
The information provided here offers examples of Dx and how it might be used within an enterprise. In other words: What Dx IS.
Company X is a publishing company that supports authors who wish to ‘self-publish’ books. The process of moving the manuscript and the author from intake to publication and marketing services is complicated. In the old world, Company X completes processes and hand-offs using a mixture of email, phone calls, spreadsheets to track progress, and best-of-breed software for editing and publication activities with a bit of content management system (CMS) interaction from the higher level managers who lead the process.
In the Dx world, this process and all tasks and activities will be reviewed and modified to engage all team members including editors, graphic artists, print-on-demand suppliers, distribution, book shows and libraries as well as authors (customers). An author ‘applies’ by uploading the manuscript into the system via the publisher’s website and the process of notifying the review team member is automated. As activities are completed, e.g., graphic design for book covers, these pieces of content are automatically routed to the right team members, and the author is automatically notified of where the content is in the process. By taking the manual steps out of the process, the business removes the possibility of human error if someone forgets to send a piece of content, if a step is missed, or if a notification is not manually completed. Dx process changes might also include collaboration, monitoring, and management for all stakeholders associated with the project as well as real-time auditing and even automatic, artificial intelligence (AI) content edits to correct grammar and errors, and even analyze and suggest content, thereby increasing productivity and accuracy. This frees the team to focus on core customer care, planning for events and book shows, soliciting new material, etc.
Company Y is a manufacturer of computer parts using a supplier to complete crucial pieces of its assembly. Its order system requires submission of a purchase order and emailed or faxed to with a follow-up phone call to be sure the supplier received the order. When a purchase order is not filled on time, the manufacturing process is delayed and, if the supplier does not notify the partner of its inability to fill the order, the business is left to try to find a new supplier, and its business bottom line is impacted. Where Dx is in place, a workflow is established and timing is analyzed and monitored, the system can notify the business before the situation becomes dire and, if there are multiple suppliers in place, the system can even put a hold on the delayed purchase order and replace it with a new supplier – all without intervention, so the process and the workflow continues to a successful conclusion. Orders and shipments are tracked so that the business knows exactly when the shipment left the supplier and when it is scheduled to arrive on site.
While these examples may seem to be exclusively technology-focused, they do, in fact, include a review and changes to processes and activities with the goal of creating a knowledge base where team members and stakeholders can quickly be alerted to issues without manual effort, thereby making them more productive and giving them more information to make decisions about future endeavors. These integrated workflows and processes also make it easier to train new team members and to predict outcomes and the need for new suppliers, new equipment, etc. Dx removes workarounds and re-work and allows all parties to optimize time and information.
What Digital Transformation is NOT
Why is it important to understand what Dx is NOT? Because it is easy to get off track in your initiative by labeling tasks and activities and changes as Dx when, in fact, they do not qualify and will not add much, if any value.
Company Z has a process that requires purchase orders (PO) to be delivered through internal mail or faxed from one place to another. Where a PO must go outside the organization, it is faxed or sent via hard copy mail. If they choose to change the process so that team members can scan and send a purchase order by email, that new process should not be considered part of a Dx initiative. Why, you might ask? Because the change in the workflow and process Is minor and the new process does not reduce the manual steps – it simply changes them. The new process still requires a lot of human intervention and attention and room for delays and loss. This new process is just a way to modernize what the team has always done. It does not employ digital technology to integrate, connect, or streamline tasks, processes, or activities to improve the flow of information knowledge, or skill.
A digital transformation means that you have implemented technology that will enable completely new processes. Sending a purchase order via email is not a new process; it is simply a more modern way of doing something you have always done.
Company Q sells products and services for home improvement. One of its value-added services is to send out an expert to measure and sell gutters and roofing to customers. If the existing process involves the team member handwriting measurements and orders, there is a lot of room for error when the warehouse is asked to cut and provide the material, or when the purchase order and supporting documentation is not delivered by the end of the day and a project is to be completed on a tight schedule. If the business decides to ‘streamline’ this process by having the team member call in the order to a help desk or fax the document from home at the end of the day, those changes would not be considered part of a Dx initiative.
If the business wishes to engage in a Dx initiative, it must consider this process and these activities within the context of improved workflow with the goal of providing a pool of knowledge for all team members, providing a customer with confirmation of the steps in the process, and ensuring that the project is completed with full access to information and automated monitoring and management along the way, so the business can build and maintain a repository of data to analyze how long these activities should take, how many home visits result in sales conversions, etc.
Where to Start: It’s Time to Dive In
If your business is considering a Digital Transformation Initiative it is important to take a top-down and bottom-up view so that you can see the big picture and also the detailed issues that team members will face as they undertake the change and the new challenges of Dx.
In order to support the Dx initiative, the business must balance its investments, resources, hiring, processes, technologies, goals, objectives, and customer and partner focus. For its existing workforce, the business must take a hard look at the new skills and evolving skills it wishes to encourage for its team members and provide an environment that encourages the adoption and use of new technologies skills, and data sharing to ensure that team members continue to evolve and improve as a business asset.
From a hiring perspective, the business must engage in strategic workforce planning, and for both new and existing employees, it must plan for constant training and skill upgrades so that there is an environment of continuous improvement and flexibility. This does not refer only to technology digital knowledge and data literacy, but also to the way team members think, collaborate, and behave. They must be willing to share knowledge, share credit, and suggest new, creative ways to improve delivery, processes, etc. And the enterprise must support and reward those behaviors!
From a technology and infrastructure perspective, the enterprise must review and address scalability, performance, and software, hardware, mobility, and network issues that will impede Dx’s progress. Businesses must take a hard look at user-friendly, analytical solutions and how these can support the advancement of Dx and data literacy within the enterprise. The more accessible and clear the data is, the more the enterprise can expect users to adopt the technology and share the data. This will free the IT team and data scientists to focus on strategic issues while team members can become more familiar and comfortable with the use of digital tools to make decisions and achieve goals. Look for ways to improve security and decrease business risk as technology changes are made. This will improve compliance and productivity.
As the cultural shift begins, be sure to provide clarity to team members to let them know the business recognizes the challenge and understands that there will be challenges as the initiative progresses. Clarify what the executive team wants. Should the team focus on quality or speed, creativity and openness to new ideas, or just efficiency? What are the new goals – what do they mean and what DON’T they mean? The more clarity you can add, the less stress the team will feel.
As the plan evolves, it is crucial to keep customers at the center of the picture. Look for ways to improve the knowledge and response time for your team members so customer satisfaction will be sustained and improved. When team member time and effort is optimized, customers should get the benefit of the extra attention and focus.
To plan and execute a Digital Transformation initiative, a business must understand what Dx is and what it is not and it must use that knowledge to build a comprehensive view of the organization, its current and desired culture and technology environment, and its team strengths and weaknesses and customer needs. A Digital Transformation initiative must include a focus on: customers, partners, stakeholders, team members, processes, tasks and activities, risk and security, and technology infrastructure and tools to support the evolution and to ensure that collaboration, flexibility, scalability, a responsive change-oriented environment, and continuous improvement are always at the forefront of workflow and skill.
