Digital transformation is a term that’s often thrown around the boardroom and overused by the media, but it’s not always clear exactly what it means, writes Jim Bowes, CEO and Founder of Manifesto
The problem is that digital transformation can mean one thing to one business and something totally different to another. For example, depending on a business’s objectives, digital transformation can mean anything from personalisation to rethinking an organisations’ business model.
Even so, those who disregard digital transformation as just another business term risk missing out, as digital transformation isn’t just a tick box exercise; it’s an essential process that can help to futureproof a business. Plotting out a company’s digital journey can show staff what their role might look like in 10 to 20 years, and can also help the business prepare for further disruption in the industry.
Digital transformation is also a great way to increase efficiency by doing away with unwieldy legacy systems and replacing outdated processes with updated versions. It also offers the chance to empower employees with the digital tools they need to do their jobs effectively in a modern world. In other words, it’s all about innovating now to stay ahead of the competition – and what business doesn’t want to do that?
To outsource or not outsource?
With so much to be gained from digital transformation, there’s every reason for businesses to be investing in it now. According to IDC, digital transformation could actually be worth $18 trillion in additional business value globally, and that figure may well be modest. By the year 2020, Gartner’s CIO Agenda predicts that digital business will represent 36% of all revenue on average.
However, that doesn’t mean that businesses can simply throw money at the problem; when it comes to digital transformation, outsourcing is not always the answer. In its report Strategy, not technology, drives digital transformation, Deloitte sums it up nicely. It says that digital transformation has “less to do with technology and more to do with business fundamentals”, which is absolutely true.
When it comes to digital transformation, it’s vital to instil understanding and capability around this technology in every person in your organisation. Building this knowledge in-house and working with coaches and specialist partners to make your whole organisation more capable and more prepared for this change is the best way to take your business and brand to the next level.
Make no mistake: digital transformation isn’t something you can spend a bunch of money on and check off a list – it’s about the future of your core business, the future of your customers and what they expect. You wouldn’t outsource any other key strategic decisions, so why would you outsource digital?
Building success from within
Regardless of what industry you’re in, the digital journey needs to start with senior board members. Getting the backing and sustained support from this group is crucial. Without it, any project is likely to fail even before it’s started. However, that can be a challenge, particularly for digitally immature companies where digital transformation might not have much meaning and might not be viewed as important.
In order to convert any doubters, digital transformation needs to be measurable. A great place to start is to measure progress internally against a clear starting point, and also externally by comparing your progress with what your competitors are doing. Setting goals over a specific timeline will also help to measure progress. However, these need to be realistic targets that can be achieved at a pace that suits the business. This will help to create a clear digital transformation vision, making it much easier to drum up support from the top.
It’s also worth noting that organisational buy-in is just as important as management buy-in. The easiest way to gain support here is to make sure that digital specialists are working closely with the rest of the business and routinely sharing their knowledge. Communication and transparency will be key. Fundamentally, digital transformation isn’t a project – it’s a journey that devolves digital skill in to every person and process in an organisation.
This is the holy grail of digital transformation. For many, this vision might seem some way off, but that doesn’t mean digital transformation should be feared, nor simply outsourced lock, stock and barrel.
Digital transformation can begin with a few small and subtle changes to the functioning of a business, as the differences they make can be huge. Starbucks for example, did away with its physical loyalty cards and integrated the scheme to its mobile app which is now used by more than 12 million customers in the US and continues to drive loyalty and brand engagement.
For some, the risks of embarking on a digital transformation strategy may seem daunting – but the rewards are immeasurable. Businesses that ignore digital transformation risk the chance of becoming the next Blockbuster – but those who embrace it could be the next Airbnb.
About the author
Jim Bowes is CEO and Founder of Manifesto, the award-winning agency of creatives and technologists who collaborate with exceptional organisations to change things for the better
