On Digital Transformation

There’s lot of talk about digital transformation in recent years. Consulting companies have created new practices based on it, knowing that corporations will require guidance on how they should transform toward an increasingly digital world.

What is Digital Transformation?

To put it in plain terms, the premise of digital transformation is that traditional companies— such as Coca-Cola, Walmart, McDonald’s, GE— need to evolve in order to sustain its businesses into the future. Consumer behavior has changed, and so should companies who want to continue their success and defend their market leadership. Executives must adapt to the new norm by reaching their customers digitally. And that involves more than just creating a website.

What it entails is a complex revamp of the enterprise, implementing the right technology systems, organizing its data, and creating a flow of information that is accessible across departments— with the ultimate goal of making data-driven decisions (ie. through big data) and serve customers better (ie. through digital operations and marketing).

Where I’ve seen companies fail is when they oversimplify the process. They think being “digital” is just having a website (there’s hundreds of websites out there; these days, you don’t stand out by just having a website). Or when they think of “digital” as a concept that only resides within marketing, such as buying ad space digitally.

“Digital transformation” should be an evolution of the enterprise from all its nitty gritty corners.

Who Succeeds and Who Doesn’t?

Successful companies in the digital world succeed by any of two means: 1) they started as a digital company (Google, Facebook, Amazon), or 2) they have evolved successfully (Coca-Cola, Dominos, Target). They understood that customers are online and they transact online. Beyond that understanding, they’ve set up ways to serve these customers where they are now— online.

Companies who are struggling are those that don’t yet understand that evolution need to be systematic. It doesn’t have to all happen simultaneously, because that will cause a lot of messiness and disoriention on the culture and employees. Think about remodeling a house: you do it in phases. You don’t remodel all parts of the house at the same time or else there’s not enough space to do what it’s intended for: having a place to live. Yet while you remodel a house in phases, there’s a holistic plan that takes into account how remodeling can make the areas work together in a harmonious way.

What Successful Transformation Efforts Have

Having a plan is a more organized way to transform. Companies who evolve successfully have a consistent vision, and they have created a solid roadmap that set a structure and solid footing on which they can be successful moving toward the future. Employees are also informed by the changes they may experience, and this way they are prepped, can anticipate change, and act accordingly (ie. learn new skills).

Digital transformation should be about transforming the business into operating digitally, the brand(s) in how it communicates and engages customers, and the culture in instilling a collective vision toward succeeding in the digital future.

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