Digital transformation is a hot topic these days, and you can easily find a lot of reports and research talking about why companies have to do it. But what is it, exactly, and what can you do to get started? Here is a definition and five suggestions on your first steps.
What is digital transformation? Here’s the best definition I’ve seen so far: ”The use of technology to radically improve performance or reach of enterprises.” It’s from a Cap Gemini report. I like it because it has a broad scope, it talks about digital transformation as a concern for the whole company, and as something that can improve both existing and potential business.
Far too often digital transformation is described primarily as being in the realm of marketing and, at best, customer service. Those two are extremely important, but the potential of digital developments are just as great in product development, production and logistics. And that it can play a role in sustainability and CR is also important to remember.
Another difficulty is that a lot of the examples and case studies are based on start-ups or disruptive companies like Apple or Google. But a majority of companies doesn’t fit that description, yet they face the same challenges when it comes to harnessing digital possibilities.
I would like to suggest five ways every company, large or small, new or old, can get started on digital transformation. There are many more areas to address, of course, but this will take of those first, important steps:
1. Get all parts of the company talking about digital
There are two key things you can solve with this. First, make sure that digital transformation isn’t owned by one department and ignored by the rest. Most parts of the organization will have important roles to play, and some crucial players like IT has to be on-board.
2. Get management buy-in
There are a lot of great things that can start from the grassroots level and work up through the company, but digital transformation is not one of them. You need management to understand how important this is, for several reasons. There will probably be a lot of costs involved, for one, and it will also need to take place over a longer period of time. Management has to be on-board for this.
3. Make digital part of the company DNA
Digital maturity can differ a great deal in companies, especially if they are bigger and/or have been around for a while. Plus, people’s interest in digital is very varied. If you are to succeed with digital transformation you need to raise the level of digital knowledge and the only way to do that is through education and discussion. Also, you need to make digital relevant to people that might be working with it in a very limited way.
4. Make use of data
There are a lot of data being collected in every company, involving everything from customers and communication to products and logistics. Finding ways to really use that data in an informed and consistent way is a great way to really begin a digital transformation. It will provide you with a tangible use, and likely some specific ways to develop and change.
5. Look for partnerships
The digital revolution, and especially developments like the Internet of things, has brought about some very interesting partnerships. The car industry and the telecom industry to just name one. These new partnerships are something worth exploring for many companies, to look at possible new business models where digital can play an important role.
If you are interested in reading more about digital transformation, there are some very interesting reports from Cap Gemini, Altimeter Group and Brian Solis that I encourage you to look at. And a blog post from Ray Wang, 5 steps to starting your digital transformation initiative, provided me with a lot of inspiration.
This was originally published on LinkedIn in October, 2014