Other than a hot term in search engines, digital transformation is typically defined as applying new technologies to solve your business issues, primarily improving current processes. The reality is that digital transformation is much more than merely implementing technology – it is looking at the effects of technology on not only your sector but on anything and anyone.
Directly applying digital transformation in your current space is not sufficient – one must take the longer view of trending out the signals created by both the technology itself and the application of the technology to your sector.
For example, let’s look at digital transformation in banking: some may think that applying new technologies to develop a more user-friendly banking application is an excellent example of digital transformation. It is not. An excellent example of digital transformation is projecting the future of “banking” as a concept and looking at future bank customers (or more accurately, prospective customers who might use a service similar to what a bank does today). Are people interested in banking per se, or are they more interested in what they can get from banking? Are they interested in writing checks, or merely getting services, and having payments occur transparently (in the same way rideshare payments are invisible)?
Digital “transformation” is not only applying technology to the process and business itself, its applying technology, methods, and business models on the core desires of the customer.
Is the customer interested in spending time booking their trip to Italy, or would they not prefer that it book itself, based on the clear preferences of the customer? In my view, digital transformation goes far beyond transforming the business in its current form to another business but transforming the wants and needs of the customer into products and services which can fulfill the customer’s desires on every level while eliminating the drag in the process which customers hate.
Every customer starts with either a need or a want. Sometimes we place that need or want in the customer’s mind, and other times they put it there themselves, or other people put it there. But once it’s there, our ability to effectively deliver the desire to the customer at the right place and time will be the key to continued business. This goes, in my view, far beyond what most people think of as digital transformation. Its a fundamental rethinking of what it means to be a business and how to serve customers, employees, and all other stakeholders. If you are willing to imagine that digital transformation is more like a metamorphosis, then you will be on the right track.
The question is, and always will be, what kind of butterfly do our current and future customers want us to be? We need to think beyond the boundaries of our own business, live in our customer’s shoes, and ask the right questions – ones that go back to a customer’s core desires – and not ones which amp to our current business. You must expand your thinking of digital transformation beyond what your present concept of what your business is and will be.
Many people limit the definition of digital transformation to the application of technologies to business processes. This is a mistake in my view; we tend to overemphasize the “digital” part and underemphasize the “transformation” part.
The transformation is critical, and the digital is just one of the tools used to implement the transformation. Also, when people think of transformation, they think too small. Transformation can be little picture or big picture, and most think little picture because they can more easily get little picture transformation pushed through, where we need big-picture transformation.
For example, I was discussing the Los Angeles public transit system a while back at a party in LA. The person I was talking to was a devout environmentalist, and she had spearheaded the funding to build several new public transit stations between the sides of the city where most workers traveled. Still, she was dismayed by the results: billions were spent, stations and lines were built, but they were rarely used.
She was annoyed that people would still get in their cars, drive and choke up traffic, while nearly empty trains whistled past them. Yes, I told her, this was bound to happen because the city didn’t look at this issue from a big-picture transformation perspective. Instead of thinking “how can we get people to work in more sustainable ways” she should have been thinking, “How can we reduce or eliminate the biggest problem, not the symptom of the problem.”
The problem is not to solve getting more people to work more efficiently; the problem is reducing the number of people on the roads. How do you reduce the number of people on the road? You reduce the amount of commuters. How do you reduce the number of commuters? You encourage telecommuting. You give incentives to companies to increase their ranks of telecommuters.
Sure, many folks still need to drive to work, but what if you eliminated everyone who didn’t NEED to drive to work? What if you encouraged companies to start comprehensive telecommuting policies, incentivizing them with tax breaks when a certain percentage of their workforce worked from home a portion of the week? Fewer commuters would mean fewer cars on the road, lower emissions, and because long commutes have been shown to lead to depression and divorce, much happier people overall. If that didn’t work, subsidize “work centers” WeWork type satellite facilities closer to where their employees live, significantly shortening their commutes. Fill these satellites with all the comforts of a central office – sell off your massive campuses and place your people in smaller more distributed offices which are much easier to get to, and then bring in the digital by providing your people with high definition virtual conferencing facilities and maybe even VR meetings to allow them to collaborate just like they are there.
This is real digital transformation – not the improvement of an existing process by applying digital technologies, but a complete overhaul, gleaned by looking at the overall big picture problem and solving that. Digital transformation also requires the application of futurism: without seeing the trends (and the anti-trends), then you will have little idea of where to go next, to skate to where the puck will be. Transformation needs foresight. Otherwise, the question will be “transform into what?” – You need that target of transformation to strive for.
Without a goal, how will you know what direction to move in?