What Exactly is Digital Transformation?

What Exactly is Digital Transformation?

People are talking about digital transformation all the time but not everyone is talking about the same thing. How’s that? Because digital transformation means different things to different people and some people don’t get it at all. They think it’s all about the tech – shiny, whizzy new toys – but it isn’t. It is actually about how technology is used by and throughout an organisation to drive change, innovation and business agility.

Technology is the driver and the enabler and it has transformed how organisations can and do deliver products, services and customer care. The transformation bit is how and why those products, services and customer care are delivered differently. Transformation is about organisations doing things differently and people within organisations doing things differently, which for established organisations, means deep cultural change.

The cultural piece is often the missing part of transformation efforts and yet it is the most critical element. Without it, the transformation won’t happen. ‘The Digital Culture Challenge: Closing the Employee-Leadership Gap’, a report by the global consulting and technology company Capgemini, found that culture is the biggest barrier to digital transformation. Almost two thirds (62%) of the survey participants said cultural issues were an obstacle to achieving digital transformation in their organisation.

The Capgemini report says digital transformation is only possible if seven key attributes are in place:

• customer centricity
• innovation
• data-driven decision-making
• collaboration
• open culture
• digital-first mindset
• agility and flexibility

Some organisations totally get this and understand what transformation means for them and their customers. Having embarked on their transformation journey, they are organising teams and departments around digital, agile ways of working. According to research by Deloitte Insights in collaboration with MIT Sloan Management Review the need for transformation has prompted a fundamental shift in how organisations and individuals operate. More than 70% of digitally mature companies taking part in the research are using cross-functional teams, compared to less than 30% of those at the beginning of their digital journey.

Collaboration and agility are critical to transformation. Organisations need teams of people who can anticipate change, are willing to embrace new ways of working and can rapidly come together to work on emerging projects. While many organisations choose to transform in stages and have pockets of excellence and innovation, the reality is that the entire workforce needs to be working digitally.

Many organisations are still struggling to adapt to these new ways of thinking and doing. Some talk a lot about transformation, but in reality are just tinkering away at the edges and achieving very little. Many are overwhelmed by the pace of change and the scale of the challenge facing them.

In order to become a truly digital company, organisations need to have the right culture in place, a culture that enables these new ways of working to flourish. Change is constant now, so the focus has to be on agility, collaboration and innovation.

And of course, organisations and individuals need to have digital skills. Digital transformation can only happen if organisations have people with the right skills, in the right places and that doesn’t just mean people in the IT department. Digital transformation involves everyone in an organisation, from the senior leadership team through to the most junior members of the workforce. A report by the technology research company, Altimeter, found that roughly half of the 500 plus executives and digital strategists polled said their organisation is investing in new digital talent. This is despite the fact that 31% of them said that a lack of digital talent and expertise is a big challenge for them.

Organisations have to invest in digital skills if they are to operate digitally. But first of all, they have to know what transformation looks for them and their customers, how to achieve it and why.

Next up in out digital transformation series: ‘Learning & Development’s role in transformation‘