The Changing Face Of Digital Transformation
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A few years back, Forbes reported that, according to Forrester, only 27% of businesses had a coherent digital strategy that set out how the firm would create customer value as a digital business. Fast forward to today, it seems almost everyone is going through a digital transformation phase or have recently completed it. That made me wonder why do we call it digital transformation.
So, what is digital transformation? How has it changed over the years? What and who drives it?
It was just ten years ago that taxi- or hotel-sharing companies were not around, and the first-gen social media platforms were just making their way to the mainstream. Back then, companies didn’t have to worry about any mobile strategy or social media strategy. Consumer engagement was limited to few channels and potential of consumer tech had not yet been realized. But to many of us today, it seems impossible to imagine that that kind of world has ever existed.
Even the meaning of the word “digital” has changed over this past decade, especially in the context of digital transformation. It used to be synonymous with “IT.” Digital transformation was considered as a company’s ability to adapt technology to transform their business. Nowadays, however, a company’s digital aptitude practically drives the roadmap and goals of many departments, from marketing to sales to HR.
One more example. A decade ago, companies were mainly focused on office automation, technology adoption/enhancements, data mining, ERP, CRM, search technology, and virtual collaboration. Technology was the pivot on which these digital transformations used to revolve around. Lately, however, the technology has become invisible more like the way the Internet became invisible few years back. We take it as a given.
But one would imagine that the digital IQ of companies would have evolved since 2007 to align with this change? Surprisingly, the answer is no. Even now, many companies still believe technology is what drives this transformation, but the truth is that’s only half the story. As we have officially entered the experience economy era, these transformations need to be focused on that– the experience for the end customer.
At a high level, digital transformation is the need to connect business functions to streamline operations and drive efficiency in every department and service of the business. It also needs to focus outwards towards the real users/customers who directly enjoy the benefits of this transformation. But changing hardware and software without a full understanding of the needs of the users on both sides is transforming very little- it’s only going to serve as a mere technology upgrade. Technology is becoming invisible and less of a hurdle to achieving what both your internal users and end customers need.
Inside-out to outside-in
The most significant innovation happens when the transformation is user-driven, not IT driven. More importantly, when user-driven, it can spread quickly through the organisations and to the end users.
For a digital transformation to be successful, businesses should be aware of the necessity to be more user-centric, be it relating to their employees for internal systems or their customers for external-facing interfaces. Do not let a new tech platform and its features to drive the transformation. We have seen many new digital brands surfacing in the region, of which some are relevant to users but most of them are a result of some new tech-platform wrapped in a fresh branded packaging. That is where the problem lies.
When we talk about digital transformation, we’re really talking about adapting the way the organization does business to serve a new generation of consumers. Very few of us are digital natives, unlike the millennials now entering the higher education system. But this isn’t just about their use of digital. It’s about meeting their expectations of a service.
So, if this is that we all agree on, then why do we call it only digital transformation? Digital is still just one part of the customer experience, isn’t it? Transformation needs to go way beyond digital. I would like to call it CX Transformation. It means focusing on all the things the customer perceives as the organization and how that particular brand touches the customer. It’s about making this cohesive.
This is one of the reasons why the scope of these transformation initiatives needs to change. As the customer interaction/experience is not limited only to brand-owned channels but includes how the user searches and reaches you, how your marketing affects their perception, how it makes use of the insights, and so on… Today’s transformation needs to take a more outside-in approach which makes it even more challenging.
Digital transformation is cultural transformation. Technology is a driver, but in my view, it is still just an enabler. The transformation has to occur in our organizational culture, our people and processes– everything that touches the customer and their interaction with the brand.
A successful transformation is about leveraging technology to meet user expectations (both internal and external) and beyond.
Related: Supporting Startups To Drive Middle East's Digital Economy Innovation