What The Heck Is Digital Transformation?

I attend a lot of technology events and participate in lots of roundtable events and panel discussions. And I get to tick off every item on my buzzword bingo card at every event. But, over the last year a new term has been permeating discussions. Digital transformation has become a common theme in everything from online services to security to marketing. Well, I'm calling it now. Like "big data" a few years ago was really just "data" attached to a hype machine, "digital transformation" is really just business as usual.

After a couple of decades working in the IT business, I feel like I've got some perspective. I've seen outsourcing and on-premises flit back and forth a couple of times, centralised and decentralised computing (mainframe to client server to cloud to hybrid to edge computing) toggle around and now I hear about digital transformation.

The core fundamentals of business have not changed in the last 20 years. And from what I can tell they aren't that different to the centuries before. Find something people want and sell it to them for more than it costs for you to make and deliver it.

Just as distribution of the written word was revolutionised by the printing press in the 1500s and manufacturing was turned on its head by the Industrial Revolution 200 or so years ago, we are seeing digitisation and connectivity changing the business models of the 20th century.

Every major pivot of the business world has one common feature - it made life easier for the customer (albeit sometimes at the cost of worker's right - but that's an argument for another time and place).

Digital transformation is a bullshit term dreamed up by a bunch of analysts who needed a label for something that has been true for centuries. When something new or different comes along that changes the dynamic of how business and customers interact, the industry incumbents either adapt or die.

Aside from the tired examples of Uber (who doesn't own any cars according to a hundred marketing and technology presentations I've sat through) and AirBNB (who don't own any property... sigh) what we are really seeing is a change where bureaucratic systems are being smashed in order to remove friction between the people accessing services and those who provide them.

For example, a number of people who work in the heath-care industry are seriously spooked by Better Caring because they are taking old businesses out of the loop when it comes to matching carers with people who need the support.

Companies that can look objectively at how they interact with their customers and identify where the points of friction are and remove them are the ones that will survive and thrive. A good example is one of the oldest companies in the world.

GE saw that emerging technology was going to transform the world of manufacturing and shifted themselves in to a 21st century business that harnesses new technology and brings their customers along with them. On the other hand, there's Blockbuster and Netflix (sorry - it's another tired example drummed into me from attending too many conferences).

What's the money shot?

If you want your business to stay solid, look at every point in your supply chain and identify where the pain points for your customers and staff exist.

Then look at how you can remove those pain-points. Because if you don't someone else will (Cough... taxi industry... cough)

That's not digital transformation. It's just commonsense.


Comments

    Yeah, I don't think you get it...

    After trying to hopelessly to actually understand the gist of your article, I think you're assuming 'analysts' simply tag any change activity with the phrase 'digital transformation'. With that being the sole premise of your argument, I can only assume you're spending too much time around the wrong kinds of people.

    Let me give you some examples of true digital transformations. Not the type your round-table mates like to throw about:

    1. Say a hospital or institution moving from a manual paper-based records system to one that is purely digital - e.g. iPads for case notes and managing patients, etc. That is a digital transformation.
    2. De-centralising your workforce, so that everyone works remote via Skype and the cloud, selling off all your office space in one big hit. that also is a digital transformation.

    There's a lot more to a digital transformation than you think. And while you did get one thing right, those things you listed are not digital transformations, that doesn't mean that such a thing does not exist.

    Just because it doesn't look like a duck or quack like a duck, it doesn't mean there's no such thing as a duck.

      Completely agree. Also if the author is only hearing the term in the past year, then they need to attend less technology events and get involved in actual business a bit more (the term that is the new buzzword on the scene is "digital disruption").

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