Today, everybody is talking about digital transformation. This is a true buzzword in the business world. But in fact it is more than that. Digital transformation is not anymore an option: it is truly a matter of survival. “The majority (87%) of companies think that digital transformation is a competitive opportunity…. Fifty-one percent of senior executives believe it critical to implement digital transformation in the next 12 months.” (http://www.cmo.com/articles/2015/3/23/mind-blowing-stats-digital-transformation.html). But what is exactly digital transformation: a kind of black magic or reality? And why is this so crucial?
What is digital transformation?
First, we should debunk a myth: this isn’t about black magic. This is true reality. This is a just a complex and “virtual” reality that appeared few decades ago but that is still quite unknown for most of us. What we could do as well, is to point out what digital is not: Digital is not about technology! Technology is just a mean to support digital data. Technology is not at the centre. On one hand, the notion of digital is quite complex to define: there might be as many definitions as individuals (https://www.youtube.com/watch?v=xsWbECkVqgI). As for Digital transformation, we could sum it up to 3 main changes:
Change of state of mind
The will for transformation has to come from the top; it is a real change of state of mind.
Top management has to be convinced about this need and support the project all along. This is a critical point as digital is something most top managers do no master. In a way there is a fear to lose power in supporting something they don’t understand: the fear of the unknown.
Such a change of state of mind is quite complex. The assistance of a third party presents many advantages:
– objective analysis of the situation,
– better position to take a step backward in order to have a larger and more global view,
– propositions better welcomed as they are considered as “neutral”.
The appointment of a Chief Digital Officer (CDO) could be a good point: an internal central representative, with a large and cross-organisational view of the organization, to coordinate all of those “transformations”.
Transformation is made of many things:
Change of structure
Digital transformation is not to be handled like any other conventional project. It will lead to a full “reinvention” of the organization structure. The purpose is to transform today’s business model into a one that fully integrates digital. A transversal and dedicated team has to be created to take the lead of such a challenging and collaborative project (with the support of the CDO).
If digital transformation can be considered as an everlasting project, we should not lose sight of that each project that contributes to this transformation cannot be long term. There is a need of reactivity and on-going adaptation (https://vimeo.com/88901329 ) to follow pace of global change and always to improve and adapt the organization itself.
Of course all this is far easier to set up in a brand new company where digital can be integrated in the organization and strategy from the very beginning.
Change of focus
Digital transformation is also and above all about focus change. There should be a clear identification of the main and only focus of the organization: the customer!
The Customer has to be at the centre
All the organization – within its structure and strategy – has to be customer centric. The organization has to “be obsessed by the customer” (http://www.mckinsey.com/insights/organization/the_seven_traits_of_effective_digital_enterprises ).
“…“Digital transformation” isn’t a trendy moniker to signify an increase in technology investment. It’s a renewed focus on the customer and the human side of business…” (http://www.altimetergroup.com/2014/04/new-research-understanding-the-digital-customer-experience-drives-investment-in-digital-transformation/ )
Why is digital transformation so crucial?
Digital is all around us (http://digitalisations.com/chiffres-cles/). We are part of it. We are actors. We can’t live without it.
To survive companies thus have no other choice but to go for digital transformation. They have to adapt and take digital into account. If companies do not follow the move then they will stay aside and “die”. Today many companies have already paid the price (https://www.capgemini-consulting.com/digital-transformation-review-7).
“It is becoming increasingly more evident to many organizations that traditional innovation approaches that focus on new technologies and new products alone, often do not work.” http://ebooks.capgemini-consulting.com/digital-transformation-review-7/#/68/
Digital transformation has to be taken as a chance, an opportunity for the companies; not as something that should be ignored or that they should fight against. In any case, they would lose the “war”.
The Fnac example is a good illustration and success story of seizing the digital opportunities (https://www.thinkwithgoogle.com/intl/fr-fr/article/quand-la-transformation-digitale-ouvre-un-chapitre-de-croissance/ French version only).
On the other hand blockbuster could illustrate the sad end story of a company that refused to follow the move and to adapt (https://openforum.hbs.org/challenge/understand-digital-transformation-of-business/why-digital/blockbuster-goes-bust ).
What about digital strategy?
Since digital transformation is already a buzzword it is clear that digital transformation will be a common expression in few years. It will be “naturally integrated” in any company: in its organisation as well as in its strategy.
If there is no question about digital transformation necessity, there is a significant question that is to be raised: What are the next steps when a company is ready for digital transformation?
It seems obvious that a clear digital strategy has to be defined. But what is exactly digital strategy (http://www.digital-adaptation.com/pdf/manifesto-for-digital-adaptation.pdf)? How to define it? How to implement it? And can we be sure of its success?