What is digital transformation?

What is digital transformation? As with most concepts, the interpretations we all make will vary based on our background and what we are hearing from various sources. I think the truth is, digital transformation in one company is going to be very different from a digital transformation in company in a different industry. One size definitely doesn’t fit all.

That said, I think the term digital transformation can frighten some business owners precisely because of what they hear in the news. And, if the digital transformations we read about in the news were typical of every digital transformation, we would be appropriately frightened.

Many digital transformation efforts aren’t as aggressive or exciting as what we read about. In fact, many aren’t all that radical - but they do produce change. The idea isn’t to transform a durable manufacturing company into a search engine company, or a construction company into a software business.

So, what is a concise way to define digital transformation?

How about this: digital transformation is the intelligent application of digital capabilities to solve business problems in a way that makes your business more competitive. More competitive could mean lowering costs, moving faster, reducing complexity (for your customers, employees, vendors), or something else that you determine is worth investing in because your competition isn’t. (Or they are and you need to catch up…there are more companies in this category than not.)

For most digital transformation projects, the disruption is in the way something is performed, not what is performed. If you are selling cars before your digital transformation, you will likely still be selling them when your digital transformation is complete - the way you do it is likely going to be more effective - if not, think twice about beginning your digital transformation process.

If you are reluctant to “transform” because of the disruption it will be to your business, understand this: disruption will occur if you do nothing.

Technology and business are changing so rapidly that disruption will be guaranteed if you do nothing - technology and the people using it will force you to transform. Who are those people? Your customers, employees, vendors, and partners. That is everyone that you would/could consider a stakeholder in your business. Each of these constituent groups is transforming their practices for taking care of their concerns by moving to more convenient ways of transacting. Increasingly they require digital transactions. If they don’t find that convenience with you, they will find it somewhere else.

Every technological change that has taken place in the marketplace has produced some level of disruption for everyone. Change is a constant and it is accelerating. The longer you wait, the more difficult it will be to catchup to this very fast moving trend. Think of it this way: moving from paper to digital forms is significantly more difficult for people that don’t know how to use a computer or the internet than for people that have been gradually transforming their skills over time. Digital transformation is no different and, at some level, has been happening for decades.

Stay focused on the needs of your most important constituent groups. If you lose them because you aren’t keeping pace, winning them back will be significantly disruptive to your business. When that happens, you will have no choice but to submit to the disruption or go out of business.

At 8 Penny Labs we help our customers select the digital transformation efforts that matter the most to their business. Remember, one size doesn’t fit all - we are the help you need when considering your next digital transformation project.

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