I know the next big thing is digital transformation but didn’t realize how contiguous this word is among big consultancy groups and the government sector in Saudi.
As I was sitting with a representative from one of the big four and discussing a mutual opportunity, he started to talk about digital transform this and digital transform that. In which he took the comfort to describe the essence of digital transformation and stated that “at old times the employee sits in front of a computer to do his work; but now he could use a computer, a tablet, or even a phone to do the same thing!”. I know I become a little bit sardonic when dealing with people, and for sure I know I spell more wrongs than right, which is why I tend to talk a few words when confronting key clients. However, having someone describing an omnichannel engagement as an aspect of digital transformation is purely wrong. The same happened with a CTO (Chief Transformation Officer and not Technical) when he describes the digital transformation the in his agency and how BPM will enable the change, I was like ahhh but…. or somewhat ok ya sure whatever you feel right for your situation. Cause at the end of the day we are arguing with less scientific foundation than any other domain, and instead, we are treating it like any other marketing gimmick (aside from one aspect I will dive into it later on).
Another guy whom I discussed with from another local consultant group stated that digital transformation is capturing the customer journey and pointing the voice of the customer (VOC) and voice of business (VOB) and then resolve these issues with a digital mindset, although I don’t comprehend that meaning. So it becomes just another User Experience Journey (UX) with an extra step to solve the issues rather than capturing them.
The thing about digital transformation is that there is not even a single institute with a well clear definition that people agree with. It is much like the Service Oriented Architecture (SOA) and Enterprise Service Bus (ESB), ya people know them and know some of their characteristics, but no one can give you the complete answer for it; it is a buzzword at best, and anyone can interrupt it to suit his/her story.
So how I would personally define digital transformation? Personally, digital transformation is all about the people and unparalleled change in behavior that is associated with the reliance on technology as a medium to exchange value. In his book “The Digital Transformation Playbook: Rethink Your Business for the Digital Age,” David Rogers explores the change in more details and to later define five critical domains that changed the game and influenced the business to transform and to accommodate the behavioral change. The factors are:
- Customers: move from one directional communication to bidirectional communication and its reciprocal effect on the relationship.
- Competition: previously, businesses compete over a segment of the market, which caused the impact to cascade to become something like Pepsi vs. Cola. However, now, to survive, companies have to compete in areas while collaborating in other areas to gain competitive advantages (Apple Music in Google Play)
- Data: previously data was of marginal importance, while in this era, the information is the king and harnessing the data across the customer journey will provide you with insights that give market advantages over competitors.
- Innovation: At the pre-internet era, getting feedback on a new product was a lengthy process with strenuous activities to accomplish; that is why product development requires enormous resources and time to develop. At this stage, with customers at the front of the value proposition, innovation should be fast-paced with much experimentation at hand (Design Thinking anyone?)
- Value: your value should be adaptable to change in customers preferences. The access to information allows the customer to customize and tailor a value up to his likening.
Now these elements or domains are more into understanding the market and its trend, and other publications might contradict with the assertions (A business expert wrote the book after all), so how would I communicate the concept to my clients? I ask them a simple question? Well, you change aspects of your business model? If they answer by yes, then that is a transformation. However, if they say no, then I would call it digitization.
The tricky question comes into mind, digitization could change an element of the business model, so should we call it digital transformation? Well, I tend to answer from my experience that if more than one element is changed, then I would qualify it as digital transformation, but there should be a reciprocal effect on the overall business model (vendor digitization altered the value proposition) otherwise you just did some optimization.