What is Digital Transformation?
In the conversations I’m having with executives, the perception surrounding digital transformation can be negative or even fearful. It sounds all-encompassing, not to mention budget-busting. Sensational articles circulating with headlines in the mould of ‘Become Digital or Die’ don’t do much to allay these fears. It’s no wonder execs are anxious.
It’s also unhelpful to hear digital transformation described as a marketing buzz phrase. Digital transformation isn’t just about marketing - far from it. It’s about getting all functions of your business fit for purpose in a digital world, from finance to customer service to HR.
I define digital transformation as the process of embedding digital technologies, across all aspects of your business.
Digital Transformation Drivers
To understand digital transformation, you must also understand what’s driving it. I believe there are two key drivers; namely the explosion in digital technology, and the rise of the empowered, connected customer.
“Today’s leading companies are already becoming obsolete. In 10 years, 40% of the Fortune 500 was replaced.” Brian Solis, principal of Altimeter Group.
Digital disruption is rapidly moving across a range of industries, most famously in entertainment, but now reaching previously 'untouchable' sectors, including education and healthcare.
Why? Check your pocket. Smartphones, tablets and other consumer technologies are fundamentally changing consumer behaviour, creating a new type of customer - the connected customer.
The connected customer can research and review your products and services online long before making contact with you. The connected customer is savvy, avoiding old, interruptive marketing messaging.
A report into consumer trust by Neilsen earlier this year revealed that peer-to-peer reviews and online recommendations are now the top two trusted sources in the buying process. This represents an enormous power shift between businesses and consumers. If you’re not present online, participating in conversations and monitoring brand mentions, there’s a real chance you’re missing out on business.
‘Become Digital - and Thrive’
I’m not an advocate of the ‘Innovate or Die’ school of thought - I prefer to see digital transformation as an enormous opportunity, that everyone has the right to understand and take advantage of.
So how do you take on digital transformation? Digital transformation is like any other piece of work. You do the thinking, create a roadmap and break it down into manageable pieces. It’s not sexy, but process is vital. Next week, I’ll give some insight into the process we use, the ‘how’ of digital transformation.