Are you only Digitizing or bringing Digital Transformation?

Digital and Digital Transformation am sure in someway is touching all of us in our respective organizations. However, its interesting to observe the diverse understanding and nature of initiatives quoted under Digitization. Digitization has multiple interpretations in mental maps ranging from Anytime Anywhere Apps, IoT, AI/ML, dashboards , automation and so on. While fair to say that they all are in some way likely to be part of any program, its also true that not all Digitization is Transformational in nature.

Study of some of the most successful and disruptive Digital business models revealed five key underlying themes to me from a business lens which define – Are you only Digitizing or bringing Digital Transformation? It’s a relevant question to my mind because recognizing the same determines whether we are taking incremental or disruptive actions true to the potential of Digital possibilities. I do not claim to be an expert or that below is exhaustive in its definition , however I do see a striking consistency of the below five elements across most successful and disruptive examples of Digital Transformation:  

1.Fundamental Business Model/Process change: This is key acid check and is way beyond automation of tasks and process. True transformation would fundamentally change the business process and at larger scale the business model itself. They key question to ask here is : Are one or more stakeholder/intermediary participant in the value chain/process reduced?

This is because, only an impact of such extent can unlock meaningful long-term value. In a generic sense, this may also be called disintermediation. Internally to organization it may be interpreted as delayering of supervisory layers and in the larger value chain context, redundancy of few nodes/participants/intermediaries.

2. Leap to move Closer to End customer: Whatever initiative we take, we must move a step ahead, closer to End Customer or unlock possibilities to make an impact in near future. The key question here is : Whatever we are doing, is it unlocking some additional information about end customer experience/usage at Scale?

The most successful business models and innovations leveraging digital have come when business has been able to engage/transact/understand the end customer directly.

3. Increased Information Leverage in Business to Create Explicit Value:  This is about opening New Data Sources through digital ( hitherto blind-spots). The key question here is: Have we opened up new and relevant data points in the value chain?

This new data may be enabled by new solution deployments or may be modifications in existing systems to start capturing, analysing and using in a meaningful manner to create explicit value.

4. Data Streaming and Enable Data Digestion: A related point from above is, truly transformational programs would certainly involve Data Streaming ( e.g. real/near real time, quick refresh from multiple sources) to users as against conventional way of data consolidation and presentation with a lag. As a corollary, this is likely to be considerable amount of information which can be absorbed and made use of (Digested!) only when there is:

a) Data Democratization and empowerment: which means more people/resources have access to use information to take decisions and actions on the go without validation/revalidation/approval in conventional setups

b) ‘Bite’ size data: This is about optimization of information load for audience. Its is about important, relevant, small packets of key information to a fragmented audience.

c) Algorithmically Assisted: Use relevant backend algorithms to render information in a way which facilitates action and reduces effort in interpretation and associated inconsistences.

5. Technology as Core Pillar in Business Strategy: Business excellence and agility will be highly dependent on Technical capabilities of the organization. The key question here is : Have we enabled Technology leads to have the due authority, voice and empowerment to designing business processes?

The technology teams are the most informed here in making the right architectural and platform choices. The underlying nature of digital technology is greater flexibility/agility to plug and play multiple ‘specialized’ solution rather than conventional ‘one size fit’ all solutions which are good at most things but best at very few. Tech leads must be empowered to make choices and investments to enable agility of modifying tech architecture and switch between best in class solutions as the business scenarios emerge. Conversely it also means, a greater ask on technology leaders to be more aware of business models and affordability as compared to present. In summary, as part of transformation tech organization and strategy needs to be fully absorbed in business.

In conclusion, to make a significant and lasting impact on business, I believe its important to recognize difference between Digitization actions and Transformative actions. This does make a difference between incremental Efficiency lead gains versus disruptive Effectiveness lead gains.