Table of Contents
Introduction
Henry Ford, in 1913, introduced a moving assembly line for the production of Model T cars. This concept transformed the entire automobile manufacturing industry. The change was not only in technology but also affected the mindset, culture, people, and processes. It came as a considerable disruption for every other organization, given the overarching nature of the change.
Image Source: Ford Motor Company
Digital Transformation Is Overarching Too
Digital Transformation is the conversion of every aspect of your operation. With Digital Transformation, an organization’s operations, functioning, serving, processing, organizing, directing, delivering, and performing undergo change. It changes the way you communicate with your employees, partners, and customers alike.
However, it is not uniform. Digital transformation does not follow a script. Every organization will need to think about what it means for them and define how they want to go about it. While adopting digital technologies for every process and interaction is expected, the pace and manner in which organizations will go about it will change.
Cultural Aspects of the Digital Transformation
We have already talked about the hallmark of successful digital transformation in the video. Let’s recap those indicators quickly. These four indicators are;
- Availability of the actionable data and information in real-time for decision making
- End-to-end automation that makes such data availability possible
- Personalization across channels that ensures better conversion
- The fourth characteristic is agility. How quickly can a business respond to changes? How soon can they leverage opportunities?
Before we talk about the tools, it is critical to discuss the mindset first. Without the right perspective, transformation is not possible.
Willingness to experiment
The most significant factor is the mindset of experimentation. You will not find better ways of doing things unless you try them out. Maintaining the status quo will deliver the same results over and over again. Willingness to try new ways of doing the same thing is at the heart of any transformation.
Tolerance for failure
However, along with the willingness to experience, you must have tolerance for failure. When you try new ways, not all of them will work. There will be cases when the outcome is negative. You have to learn to accept such failures.
Small yet consistent steps
Your experiments need to be byte-sized to compensate for the risk of failure. In general, they should follow the acronym “INVEST”.
- Independent: You should be able to execute each experiment without it depending on other activities.
- Negotiable: The initial experimentation specifications are general guidelines, not a concrete contract. You should be able to tweak the steps as you go along.
- Valuable: It should generate value for the organization.
- Estimable: You should predict the efforts, expenditure, and time for the experiment with reasonable accuracy.
- Small: So that the success or failure can be gauged quickly.
- Testable: You should be able to conclusively prove the experiment to be a success or a failure.
A Culture of Innovation
All of these factors help organizations build a culture of innovation. Innovation is a critical hallmark of digital transformation (any transformation for that matter). The fundamental objective of digital transformation is to allow organizations to adopt creative and innovative ways of delivering value.
Innovation encompasses the internal as well as external factors. It can bring about the process or product innovation. The fundamental objective of digital transformation is to enable executing innovative strategies with optimal efficiency and accuracy.
People Are An Intrinsic Part of Any Transformation
Digital Transformation is an enabler that aims to deliver better value to the customer. The better value comes from innovation. Innovation is always driven by people.
Organizations with a better environment and opportunities for growth and development are more likely to execute a successful transformation initiative.
While the transformation depends heavily on technology, the most important driving forces are customers and employees. In that sense, digital transformation is heavily people-centric. We are going to discuss the technical aspects of digital transformation, especially from marketing automation, Machine Learning (ML), and Artificial Intelligence (AI) perspectives in the latter articles.
Digital Transformation Is Not Digitization or Digitalization
While the terms sound similar, there is a vast difference in what they mean and do. Usually, that digitization and digitalization precede the transformation.
Digitization is the act of converting the information, data, and records in digital form. It is primarily done from the storage and communication perspective. It may not bring about any change in how a business operates.
Digitalization goes one step ahead. It looks at efficiency gains by using digital technologies. The digital journey of organizations so far has been the journey of digitalization. It is internal.
Digital transformation is different. It is focused on the value to the customers. In that sense, it is outward-looking. It covers efficiency, data and information storage, retrieval, communication, and every other aspect of day-to-day working. But it recognizes that all these factors as critical parts working towards customer value delivery.
Digital transformation is an attempt to make the customer journey more pleasurable and efficient. Every component of an organization works towards this goal. So, digitization and digitalization both are components of digital transformation. But the digital transformation is much more than the sum of these two.
Summary
In this introductory article, we discussed the fundamental aspects of digital transformation. Let us summarise the points covered in the article briefly;
- Digital Transformation is overarching. It encompasses every aspect of a business, internal as well as external.
- It is about a culture of experimentation, innovations, and a value-centric approach.
- The chances of the transformation initiative being successful increase with smaller but consistent experimentations.
- People are critical to ensure successful digital transformation.
- It is different than digitization and digitalization. The latter two are inward-looking, but digital transformation is outward-looking.
- The hallmarks of a successful transformation are the availability of real-time information, automation, personalization, and agility.
In the next article of this series, I will discuss why digital transformation is crucial for today’s businesses.
Do let me know your opinions and feedback in the comments section. You can also subscribe if you want to receive the next articles in this series.
