For a while now, digital transformation is a term that is thrown around within offices and workplaces - with everybody claiming to be an expert on what it is - and how it works. Unfortunately, it doesn’t - work, that is. For many businesses, attempting digital transformation without knowing the whole story has led to disastrous consequences over the past couple of years.
What is it?
Digital Transformation is the art of taking our clever digital novel use of digital technology and using it to solve more traditional issues to enhance, support and add creativity. For example, Mailing giant, Pitney Bowes recently decided to use digital transformation in order to improve the personalisation of its customer service - by introducing self-service personal video, and a mobile first strategy, the company aimed to improve its customer service by collecting better - and smarter - data on its customers.
What’s the problem?
In a nutshell, a lot of companies, when thinking about digital transformation, aren’t looking at the big picture. In order to successfully navigate the waters of digital transformation, a business needs to start from the ground up. This means incorporating technology into every department and department of a company with a strategic plan, rather than just introducing technology for the sake of technology.
This, inevitably, means changing roles within an organisation in order to achieve the overall goals. In many cases, roles will need to be redefined and, in other cases, created from scratch. Businesses need to begin by taking a long hard look at the existing roles within the company in order to decide which can be adapted and which may now be defunct. CMO and CIO roles in particular need to be examined in order to determine their place in this brave new world. The biggest mistake companies made when attempting a digital transformation is failing to effectively communicate to employees the new strategy and, their role within that strategy.
Other issues include the fact that many business underestimate the impact of a digital transformation. Rather than just helping old school ideas with new technology, a successful digital transformation requires a re-imagining of the entire business; from sales and HR departments to the company’s very branding, in order to reflect the transformation.
The cautionary tale
In 2005, TV stalwart, the BBC, attempted to introduce a digital transformation in order to prepare the station for onslaught of on-demand. Complex and lengthy, the strategy was created in order to transform the way in which content was presented to the BBC audience. The plan was to include several threads including a new data management system, a digital archive, production tools and, essential enterprise services and was named by the BBC as The Digital Media Initiative (DMI).
Just eight years later, the BBC’s DMI was scrapped with an asset write-down of £100 million causing huge embarrassment to the corporation in addition to the financial losses. What went wrong? A review discovered a number of fatal errors including:
- A non-effective governance structure
- Unclear priorities - focus was on technical build rather than the more important enablement of change
- The business case was not subject to review
- Governance bodies were not presented with full and transparent facts
The overriding message from the BBC’s failure is that a lack of preparation and communication resulted in the TV favourite emerging with egg on its face and a hole in its pocket - particularly devastating to a station which charges its customers an annual license fee.
The future - it’s digital
The report, Future Scape: Worldwide Digital Transformation 2018, claims that spending on digital transformation projects will reach a staggering $1.7 trillion by the end of this year across the globe - an almost 50% rise from 2017. We do live in a digital world and, in order to survive, a huge number of companies will need to plan digital transformations in the very near future. Despite horror stories like that of the BBC, a digital transformation heralds many benefits - including the vital need to plan for the future. What we’ve learned so far is that, in order to make this work, businesses need to focus on:
- Planning and strategy
- The impact on sales and branding
- Communication to all employees and shareholders
- Consistency throughout the business
By taking the necessary steps and performing due diligence, a business can successfully complete a digital transformation and come out the other side stronger than ever.