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Snake oil or panacea? The truth about digital transformation

(Image credit: Shutterstock / aorpixza)

Businesses have an interesting problem on their hands when it comes to adopting and implementing technology. As advancements are made and new products and processes are developed, the possible applications of these products and processes are quick to become over-hyped. The technology itself becomes commoditized, with many businesses prioritizing the fact that they have and are using this ‘cutting-edge’ tech over the impact that this technology has or why they implemented it in the first place. 

Think of the over-proliferation of the term ‘blockchain’. It has some very specific real-world use cases that can truly revolutionize certain industries. However, when simply adding the term ‘blockchain’ to your company name causes your stock price to jump by 200 percent, there may be a problem with understanding where the value of this technology really lies.

This problem has naturally evolved from misunderstanding the implementation of specific technologies to a misunderstanding of the entire process of transforming your business using technology. The idea of digital transformation has become a race to adopt the latest technologies, rather than transform the way that your business works and the processes behind that, leaving the phrase ‘digital transformation’ meaningless. The principle behind it though is a critical process to ensure that businesses are not only ahead of the competition at present but also have the ability to adapt in the future. For this to be true, it needs to be thought about in terms closer to cause and effect than replacing analog with digital for the sake of digitization.

Don’t replace tools, rethink processes 

One of the fundamental misunderstandings that underpin the framing of digital transformation is the idea that if you replace one tool with a more advanced tool you’ve transformed the entire way that somebody interacts with said tool. An example of this is when the world changed from working on paper spreadsheets to working on digital documents. Moving from paper to a digital format does have some inherent benefits, it improves ease of access and allows for greater collaboration. However, the fundamental process of inputting information into a spreadsheet and then comparing across different spreadsheets is not transformed.

Instead, what is truly ‘transformative’ is to take a wider view of what the process is to get from A to B, what steps are included and where this journey can be streamlined. In relation to the above example, the reason Excel, in particular, was such a transformative tool was not because it allowed you to input information on a screen with a keyboard rather than on a piece of paper with a pen. It allowed you to go from having information in a sheet to the analysis of the data housed within the sheet in a matter of seconds, fully automated, without having to leave the tool. Revolutionizing the entire process of gaining insights from data.

There is a bevy of technology available to businesses now that has the flexibility to adapt to multiple use cases and streamline processes. Artificial intelligence (AI), machine learning (ML) and microservices are great options for building a digital transformation program around. AI and ML can help to automate current processes while microservices lends itself to future business agility by building departments and capabilities out of pre-existing ‘blocks’ of resources.

These technologies are still tools though, and a tool is only as valuable as the function that it serves within a process. Replacing a single element while maintaining the overall process is going to have a limited impact. Rethinking the process from start to finish, improving, consolidating, and perhaps even discarding tools is what can be truly transformative.

Some teams are taking this thinking beyond process and tool and are instead following the doctrine of the Agile Manifesto. This methodology raises the thinking to an even more macro level, focussing on individuals and interactions. The idea is to ensure that functions which have a common goal work together. Rather than a developer focus on developing and the end-user focus on their current job function, instead both must work together to ensure that the result of a digital transformation initiative fulfills both functions. Each role has its own priorities, so if left to one or the other it will favor their interests. Instead, constant communication is key to ensuring that the end result meets both party’s requirements.

Project thinking vs product thinking

The mindset behind digital transformation is also in need of rethinking. Fundamentally, to future proof your organization the digital transformation process needs to be thought of as a product not a project.

Projects have specific objectives and timelines that once met, will then end the project. If new issues arise outside of the scope of the original project, then that scope either needs to be expanded or an entirely new project needs to be started. This is an extremely inefficient way of thinking about digital transformation, resources and efforts are doubled and so wasted when working across several projects that each seek to improve or replace individual tools or processes. Taking this approach to digital transformation loses the forest through the trees, hampering your business’ pace of and ability to innovate.

Building a successful digital transformation initiative is instead predicated on iterative thinking. The concept of a product is something that you sell or do, over time successful products change as they adapt to the needs and wants of customers. Digital transformation needs to be thought of in the same vein as this, the wants and needs of businesses are not static. They don’t freeze in place for months or years at a time, so the approach taken to address these needs and wants must keep pace with their evolution. 

Closing the loop 

The biggest issues that we see with digital transformation initiatives at present are all mindset-related, not capability or capacity issues. Digital transformation has lost meaning as a term, misunderstood to be a task that’s carried out once then completed. To be successful digital transformation needs to be an ongoing initiative evaluating processes and tools so that they can be refined, combined, or discarded to better suit your business’ needs. 

The priority should be on processes over tools , tools merely serve a function within a process. The processes themselves though can have a wider-ranging impact than replacing tool A for tool B. Digital transformation is a crucial concept for business leaders to understand, done correctly it can be the difference between being a market leader and falling to the middle of the road in your industry.

Ricardo Piccoli, Lead Consultant, Amido (opens in new tab)

Ricardo Piccoli, Lead Consultant, Amido