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What is Digital Transformation?

We are in the midst of a digital transformation revolution with discussions of the future heading toward adding a no-collar workforce – humans and machines in synergy, collaborating on new working models.

But what does it mean to undergo a digital transformation? Perhaps the best way to understand what it is is to discuss what it isn’t. Simply upgrading your bookkeeping system to the latest and greatest version is important and necessary – but rarely transformative. You could call that digitization or digital modernization, and it’s essential just to stay competitive in business today.

When you look beyond the buzzwords, digital transformation means implementing digital technology at the core of your business that help rejuvenate and reinvent processes, both to stay competitive and be disruptive in the marketplace. In other words, it means using leading edge technology to fundamentally change how you do business. It’s not a once-and-done upgrade. It means changing the DNA of your organization – and putting yourself squarely on the path of continuous evolution. A successful digital transformation ends with market-leading products and services offered by an organization that has seized previously unclaimed differentiation – by bridging the gap between what is and what has become possible through advancements in technology.

Netflix is a prime example: Back in the 2000s, the company realized its core business of delivering entertainment by mail would soon go the way of the rotary phone. They switched up everything about their delivery process to become a streaming company, delivering entertainment to customers directly on their TV or digital device. In so doing, they disrupted the entire marketplace and changed our expectations for entertainment delivery. (Netflix then began developing entertainment content themselves and became part of another massive creative transformation.)

No one said digital transformation is simple. It’s easy to be overwhelmed by the sheer scope of possibility – with so many choices and models, the path to success is not always clear. It might not be prudent for all organizations to innovate at the pace of technology innovation; but at the same time, it is good to continuously implement processes and solutions that evolve using new digital capabilities. And not every company can be an Uber, an AirBnB or an Amazon; that doesn’t mean there aren’t transformative opportunities for everyone. So, where to begin?

Dream big. Start with research and brainstorming. Study the organizations that have performed successful digital transformations. Focus on potential value of an idea to the company, not on risk and expense. Then step back and assess your organizational readiness to take on one or more initiatives.

Focus on the customer. Studies show that digital transformations that improve the customer experience are far more likely to be successful.

Build the right team. Assemble a cross-section of your organization and ask them what would make their jobs easier, what new or alternative processes they can imagine, and how they think work can be done more efficiently.

Don’t go it alone. There are experienced digital transformation consultants that can help you see the forest for the trees. They can help you break down enormous initiatives into smaller, manageable tasks and prioritize them. Together, you can determine the kinds of transformation that would single out your company for success.

In our next post in this series, we'll answer some questions to help you determine whether a digital transformation should be in your future.