Digital Transformation has been interpreted and labelled differently by businesses in the industry. It can be seen as anything from a process needed to transform your business from manual to automated, to a channel – a mobile app that would label the business digital. What is missed in the buzz is what Digital Transformation truly stands for.
To successfully answer the ‘What’ it stands for, we need to first clearly understand the ‘Why‘.
Why do organisations need to transform? And what do they intent to achieve with this transformation?
According to Peter Senge, one-third of the top 500 companies will disappear within 15 years, and the average lifetime for the largest enterprises is approximately 40 years. In the long run, he says, the only sustainable source of competitive advantage is your organisation’s ability to learn faster than its competition.
So, what does this have to do with ‘Digital Transformation’?
Most organisations believe that the single factor which will ensure their competitive edge for the future is to be more “Digitally” ready than their competitors. While this thought has driven many, in various directions, we strongly believe that to truly future-proof your business, you as an organisation need to re-examine and re-define the way in which you engage both, internally with your employees & eco-systems and externally with your clients & markets. The intent here is to maximise value created for your customers through higher engagement and alignment internally.
The natural outcome of this alignment would be seen in two key aspects:
In other words, the ability to quickly understand and recognise a need in the market, and more importantly, to be able to fluidly align internally to maximise the value using the shortest and most effective way to create a differentiating experience for customers.
To achieve this, any organisation needs to consider 3 aspects –
This is the reality of Digital Transformation for any business. If you are wondering why, let’s break-down a classic example which makes the most sense.
Remember those times when hailing a cab meant standing on the street with your hand out and waving, hoping and praying that a cabbie would stop and agree to drop you to your destination?
The inception of cab aggregators turned the tables on such scenarios for good. Now cabs could be hailed from the convenience of your own home and right to your doorstep. With more and more innovation came more and more streamlining to the entire process of cab aggregation. This resulted in businesses such as Uber revolutionising the daily transportation industry. This model has disrupted not only customer experience as we see it but also how the cab industry works – the largest cab company does not own a single car. The largest hospitality player does not own a single property – Airbnb. These companies are harbingers of what digital can do to an entire industry within a short period of time.
While the industry has moved beyond questioning the relevance of Digital Transformation and the role it played in the making of such business models, the challenge continues to remain on how to do it within the context of an existing organisation and what to consider while building one grounds up. Organisations everywhere are going through some form or the other of Digital Transformation as they strive to better themselves and gain an edge. Unfortunately, failed programs tend to outnumber successes, and real gains remain distressingly low.
Because most companies have failed to grasp a basic truth.
Let’s take the cab aggregator business for example again. Continuous improvement requires a commitment toward learning. Being Innovative ensures that business ecosystems disrupt the industry. While this could have been the objective for cab aggregators, to begin with, it needs the organisation to be continually Adaptive and Responsive to the market, continuously Learning and Improving, to stay Relevant in the game. Now, while Digital Transformation may only sound like a posher way of describing urbanisation, it does indeed stand for the ability to be able to create an internal eco-system that is capable of innovating, rapidly adapting and responding to the market, ensuring continued relevance through differentiating customer experience and new business models. It is the best form of disruption that helps you discover the true potential of your business by forcing you to shuffle the deck and find yourself a better hand.
Greyamp Consulting specialises in building strategies and game-plans to bring about effective digital transformation. While we believe technology plays a major role, our main focus lies on working with leaders to help appreciate process changes from an organisational or business point of view to a more technology and customer experience centric approach. Watch this space for more on our advisory services panning from strategy to organisational design and process.