Ask any C-suite executive, be it the CEO, the CFOs, the COO, the CMOs, even the CIO, etc what ‘digital transformation’ is and you will be met with a distressed facial expression signaling severe cognitive dissonance. The phrase ‘digital transformation’ is interpreted by many to encompass ‘digitalization’, ‘digitization’, ‘digital marketing’, ‘digital disruption’, etc. Throw in the related expression such as Artificial Intelligence (AI), Machine Learning (ML), Internet of things (IoT), Cloud Computing, Augmented Reality, Block Chain, digital avatars, and other such intrusive innovations, you have a miscellany of terms that add to the confusion.
Add to that the plethora of ‘expert’ articles and opinions trying to (de)mystify the subject. The term ‘Digital’ is currently being used to depict anything generally transported for the purposes of relaying information for machine-to-machine, machine-to-human, and human-to-human communications. ‘Digital’ is the buzzword for anything depicting modernization in the predominantly online business transformation arena. This discourse is an attempt to demystify the ‘digital transformation’ term.
In an attempt to study and research on the yardstick description of what ‘digital transformation’ is, one is besieged with definitional nuances, from the extremely technical to the absurdly simplistic. Most people will use the term ‘digital’ without knowing the underlying journey that the phenomenon undertook. I have therefore decided to put in my two cents worth to explain this phenomenon in the hope of simplifying it, especially to fellow C-suite (dummies) colleagues. Before you heckle me please understand that when it comes to the subject of ‘digital transformation’ the majority of us are dummies. I am merely playing the role of the one eyed guy in the land of the blind.
Even the so called ‘experts’ are dummies to a certain extent because the subject is multidimensional, multilayered, multi-conceptual, multi-solution, meaning different things to different people, industries, economies, markets, generations, cultures, and geographic locations. We have to collectively delve into the subject but not expecting to come up with a ‘one shoe fits all’ solution. There is no two companies which will come up with the same strategy because of differences in products, customers, markets, leadership’s risk appetites, stakeholders, culture, skills set, legacy equipment, business partners, etc. However we may come up with congruent approaches for extruding the individual organization’s ‘digital transformation’ strategies.
A bit of history is necessary. I am particularly chaffed as I have been in the ‘digital’is technology for about two fifths of a century. I was introduced to digital technology and its basis the ‘binary code’ and fell in love with the concept as a B. Sc. Electronics Engineering student in the late 70s. I then had the opportunity to work for a technology manufacturing company in the UK. I was part of the design team for early digital exchange equipment in the telecommunications industry.
When I came back to Zimbabwe as a remigrant at independence, I was one of the engineers on the first team to digitalize the switching exchanges, which formed the core of the telecommunications infrastructure. From then on, I was riding the crest of the digital wave as I was involved in one way or another in the digitalization projects of telecommunications infrastructure. I have been involved in all the core telecommunications technologies encompassing satellite technology, optical fiber, fixed, mobile, nomadic, wireless, and anything broadband. I was there at the introduction of Internet and all other social media applications. So basically, I can say that when it comes to ‘digital’ I have seen it all, as I was involved at the foundations of ‘digital’ journey from far back.
The use of the term ‘digital’ has morphed over the years and lately it has little to do with the technology, but rather the online service offerings at the user interface. ‘Digital’ is no longer the purview of engineers, but of innovators and disrupters. This is made possible by the Internet, which is in turn made possible by the interconnected global telecommunications infrastructure. Internet service is premised on the use of the Transmission Control Protocol/Internet Protocol (TCP/IP) suite of protocols, which is structured into 4 layers (some pundits put 5) i.e. physical, network, transport and application layers. Since this is a discourse for dummies, let me not delve too deep into technology. It is the TCP/IP suite of protocols that is of most importance as it is where the user interfaces with technology. For example, the persons doing mobile money transactions, mobile banking, downloading a movie, searching on Google Chrome, online meeting, online learning, and on Facebook are all interfacing with service applications above the TCP/IP.
What is ‘digitization’? Digital technology has made it much more efficient for us to generate, store, transport, retrieve and distribute information from manual, on paper, or analogue recordings, to digital. For instance what used to be archived on paper in large storage rooms is now contained in a small hard drive or even on ‘cloud’ storage on the Internet. Large edifices with room-full of reels upon reels of film are no longer necessary as these have been replaced by digital storage. Instead of keeping a whole library of books, we can now have a digital library. We are capable of collecting and electronically storing far much more information about individuals as clients, customers, users, students, patients, citizens, etc. That is ‘digitization’.
‘Digitalization’ on the other hand goes beyond the presentation of data in digital form as in ‘digitization’ and encompasses the technological enhancements required to improve business processes, transactions, and activities such as our online services. For instance we used to receive a telephone or any trade bill by post, then we would physically go to the premises of the business to pay the bill and receive a receipt. Now we receive a bill electronically and do a bank transfer on computer or mobile phone, and receive an electronic receipt, and we get online customer support for our queries. In other words, we are using digitalized processes and transactions using digital systems, which in turn use ‘digitized’ data. This enables us to better serve the customer and be more efficient in internal business processes. That is ‘digitalization’ anchored on the bedrock of digital telecommunications infrastructure. I trust I am enlightening fellow dummies.
‘Digital Transformation’ is an intrinsic component of ‘Business Transformation’. ‘Digital Transformation’ is wrongly portrayed as a technologicaln event, and yet it is an incremental and innovative improvement journey of all things digital in order to provide superior customer experience. It is an endeavor to stay on top of the game and mature, otherwise you suffer ‘digital disruption’ from new entrants. For instance Netflix disrupted the TV and movie industry in a massive way.
The ‘Digital Transformation’ journey rides on the shoulders of both ‘digitization’ and ‘digitalization’. Having ‘digitized’ the information and ‘digitalized’ the systems and processes, there is need to continue ‘transforming’ the service offering. There are a few sets of layered questions that one needs to ask in order to facilitate the definition of how the organization is to ‘digitally’ transform. There are a number of models or a combination of models that one can use to structure the layers of strategic questions, e.g. Balanced Score Card (BSC), PESTLE, McKinsey 7s Model, Digital Maturity Model (DMM), Business Model Canvas (BMC), Organizational Project Management (OPM), Customer Journey Maps, Benefits Realization model, etc.
I tend to use a combination of these models, but I find the BMC (e.g. https://canvanizer.com/), and DMM ( e.g. https://www.tmforum.org/) as foundational guidelines in crafting the relevant questions and hence eliciting a strategy implementation framework based on OPM (https://www.pmi.org/). Below are the high level (not exhaustive) questions that will guide the digital transformation thrust.
The first layer of questions which are customer focused are:-
- What is our value proposition for superior customer experience, i.e. what strategy do we need to provide the right customer segments, with the right products and/or services?
- Using what channels and touchpoints?
- What are our customers’ painpoints that we want to address?
- Here ‘customer journey mapping’ is very helpful.
The second layer of questions are focused aton the organization’s culture, workforce, key business partners, and key stakeholders:-
- Are we employing the right people with the right skills and the right set of values and motivation to strategize, plan, deploy and use the resultant digitalized systems and methodologies in order to provide superior customer experience? What are the gaps?
- What are our up-skilling requirements?
- How will we communicate the ‘digital transformation’ in order to mitigate employee pushback due to anxieties of uncertainty?
- Have we engaged and articulated our ‘digital transformation’ strategy to our primary and support business ‘value –chain’ partners, and other external stakeholders who impact or are impacted by our transformation activities?
The third layer focuses on the business operational,
- Which areas require improvement of operational processes for us to be good on our value proposition?
- What projects do we need to undertake in order to deliver the value proposition?
- What systems do we need to acquire, retire, enhance to support the ‘digital transformation’ strategy.
- What solutions, and therefore support systems do we need to put in place to respond to the customer painpoints?
The forth layer of questions focus on the external influences in our sphere of business:-
- Are there any other synergistic products or services we can embark on to compliment our current line of business?
- Do we see any disrupters in the horizon?
- What are others in our line of business doing?
- Do we perhaps need to seek out other ‘Digital Transformation’ partners/mentors?
- SWOT and PESTLE helps.
The fifth layer is based on strategy execution:-
- How do we projectize the identified ‘digital transformation’ initiatives
- How do we check for strategy alignment of the initiatives?
- How do we prioritize the initiatives?
- How do we successfully execute the initiatives?
Technology comes in as the sixth layer, guided by the overall business transformation vision for :-
- Where are we at the present, (as is assessment)?
- Where are we going?
- What is the gap?
- What new services and products do we need to roll out and support?
- What improvement or new applications do we need at the frontline (channels and customer touchpoints)?
- Technology to support continuous internal (back office) business process improvement?
- Security aspects of the services, products and underlying technology?
The seventh layer concerns the benefits realization versus the costs of transformation:
- What are the sources of revenue, or what revenue model are we using?
- What is our Benefits Realization model?
- How much will the required transformation cost?
- What funding models will we use?
‘Digital transformation’ is a journey not an event. I therefore propose an iterative approach using modern execution methods such as, among others, Organizational Project Management (OPM), a systematic way of aligning activities from strategy development, strategy execution through to benefits realization. Whilst OPM is the overall framework, some aspects of the ‘Digital Transformation’ strategy lend themselves to the ‘Agile’ change management concept which is a fast and efficient way of prioritizing the iterative delivery of high value results without having to have to articulate the full scope of the strategy. It gives room for rapid adaptation to changing requirements.
Having read this and understood bits of it, I declare that you are no longer a dummy, but a learner. It is a journey. The business environment and associated technological y and its capabilities keep on changing rapidly therefore one has to keep on learning.
