Digital Transformation

You probably have heard leadership talk about Digital Transformation in meetings, town halls and blogs. Industry pundits seem to talk/write about it; often using it to rank which companies are competing at the topmost level in their industry. Often though there is  confusion among the rank and file employees about this whole “Digital” thing. Is it the latest buzzword that executives are in love with (probably true to some extent)? Is there anything behind it or just a lot of hot air? Who are all those high priced management consultants that show up to tell us about Digital Transformation, without explaining what it is?

Technology innovations are occurring at a faster pace than ever before. Digital technologies such as Artificial Intelligence (AI), Machine Learning (ML), Cloud, Mobile, Big Data Analytics, digital workplaces & tools, etc. are reshaping the way many businesses operate and create competitive differentiators. Other than core technology there is also non-technical aspects such as collaborative workspaces, shift in the way teams work together, breaking down silos and agile development methods that are required. These are critical in implementing your digital transformation; with highly connected & focused teams developing products and deploying them into the real world as experiments (sometimes) via approaches such as dark launches, canary releases, A/B testing, etc.

We are living in an age where anyone in the world can summon a production ready data center infrastructure by just going to a web page and requesting for compute resources (AWS, Azure, GCP). The Internet has made knowledge more accessible (google search, wikipedia). Old business are being upstarted by new ones (ex Airbnb, Uber, Turo, etc.). Customers are expecting more from the businesses that traditionally served them. They want businesses to meet them where they are (on the mobile web for example or Amazon GO style checkouts) vs where the company forces customers to be (at the physical store with long lines). Be it on a mobile device or a streamlined experience or self-service everything.

Just because there is so much talk about Digital Transformation, does not mean one should jump into a transformation journey blindly. That is a recipe for disaster if you head the wrong way. You need a strategy that validates the need, provides a foundation for the effort and has the continued & visible blessing of the top most executives.

I found this statement from David Cotteleer, VP and CIO at Harley-Davidson very appropriate…

“Everybody is always talking about digital. But that is not about creating a digital strategy for the company. It is really looking at our business through a digital lens to find where technology could really change our dynamics.” – Reference

Digital Transformation is not just about technology. You have to understand your business, how it is evolving, how your competition is evolving to meet new customer needs, where your company might be 3 or 5 or 10 years from now if you maintained the status quo and are there Uber-like innovations that could disrupt your business (or in some cases are already disrupting it). Once you view your business through the digital lens and realize you need to embrace Digital Transformation, then the hard work begins.

Even those companies that do not need a full throttled Digital Transformation effort, could leverage best practices from successful transformation efforts to make their operations more efficient and enable smaller wins. So there is something in it for everyone.

You have to transform your business in ways that allow you to meet your customer expectations in this digital age. An example that everyone can relate to is the retail space. If you are in a consumer facing business and only have a website to sell your products – bad idea. You need mobile presence cause your customers are all on mobile (at least most if not all). If you have consumer websites, mobile applications and physical stores, you must make sure that customer experiences are seamless across these different spaces. Buy online and ship to store OR buy online and return at a local store.

Digital Transformation is about viewing your business through a digital lens, modifying the business processes to align with the digital future, allowing digital technologies to permeate all parts of the business and embracing a culture of innovation & experimentation. Through all of this we need to obsess on the customer experience and meet them where they are in the digital space; thus creating a  competitive edge driven by customer value.

Once you have your made the decision to transform, you will need to create an implementation strategy that covers multiple areas ( a few noted below)…

  • Educate your employees (and partners/vendors) on what Digital means to your business  and their role in the transformation journey.
  • Workforce development to teach digital skills (tech & non-tech skills). This helps with the Digital Transformation journey and to retain/grow talent.
  • Build Cross Functional teams. Example: If you had functions broken up into say development, QA and operations, with each reporting to different management chain, you will need to break that model. Gut the different structures and bring the functions together into small sized teams (two pizza teams as Jeff Bezos puts it) under one management.
  • Enable a culture that allows for experimentation (and embrace the fact that many experiments do not see a tangible business outcome).
  • Failures are seen as necessary steps to success. If you ain’t failing, you ain’t trying hard enough.
  • Embrace Agile development methods with fast feedback loops.
  • Push decision making to the lowest levels of the organization.
  • Flatten the organization structure if needed.
  • Hire/Coach Digital Transformation Leaders in various areas (business and tech)
  • Make the hard decisions to cut non-needed functions and hire new talent that will be required for the journey.
  • Do not just put a “Digital” label on things and call it transformation. Measure outcomes and adapt if outcomes are not being met.

Hope this helps some of you to look at Digital Transformation with a new perspective, beyond the hype that tends to surround it. I wish the industry had used a slightly more relatable word to envision this transformation rather than the word “Digital”.