To make it easier, let’s start to break down those 2 words(“Digital Transformation”) and start with ‘Digital’. It might be easier to give you my personal interpretation of what it doesn’t mean in this context. Digital does not refer to the creation of new content, websites, portals, services, or even the usage of technology by itself. Digital, in this context means, is a synonym for the ‘change’ that is currently happening due to the rapid adoption of disruptive technology. This change drives, under high pressure, existing organizations due to the aggressive disrupters that can put them into ‘irrelevance’. Examples of such disrupters are Amazon, Uber and Airbnb. Because of this rapid adoption of technology, the way we work and interact with our customers is changing business models how an organization stays relevant in the market place. It’s mission critical for all organizations to embrace this disruptive technology to stay ahead with competitive advantage.
What I see in the marketplace are 2 different types of organizations and how they deal with digital. One, that is embracing digital and establishing competitive advantage by designing new business models, and one that is using digital to digitize their existing business models. As you can imaging, number one is winning in the competitive marketplace. Simply said, Digital Transformation is not about adding technology to an existing business model.
If we look closer to the 2nd word, ‘Transformation’, it stands for ‘journey’. This journey must be strategically planned as most likely an organizational change is required to enable new business models. The people ( culture ) aspect of this journey is considered the hardest change in the entire process as ways of working – that have been decades around – have to be changed, meaning, people have to change. Organizations can implement the best business models, but if there is no culture behind it to support and accelerate, this change is failed from the beginning.
So, what is Digital Transformation?
In my words, I tried to be precise as possible:
“Digital Transformation is a journey of strategically planned organizational change to dominate or stay relevant in a competitive marketplace by leveraging disruptive technologies.”Tim Herglotz