What is Digital Transformation?

Key to successful ‘digital transformation’ is the 'transformation' -- the world is mostly digital by now. Companies must transform their products from exposing 'their own process' through digital channels to delivering their value into delightful customer experiences.

What is Digital Transformation?
Photo by Amélie Mourichon / Unsplash

IDC says it's about becoming 'customer first':

Digital transformation is a customer-centric business strategy (Sandra NG, Group Vice President, IDC)

Gartner agrees and adds:

Half of the CEOs surveyed expect to see substantial digital transformation in their industries, or for their industries to be almost unrecognizable within five years.

It appears that the transformation to customer-centricity is going to remake industries. Powerful stuff.

Transformation is not about new features

A lot of articles about digital transformation focus on the ‘digital’ piece; new technologies (like 3D printers or drones) that will enable new capabilities, or digitizing existing assets so that presumably they can be leveraged more effectively.

This is linear thinking. While new technologies open up exciting possibilities, it doesn’t help us understand why digital transformation would make industries unrecognizable within five years.

The journey to digital

Companies have been ‘digital’ for some time already so let’s focus on the word ‘transformation’…

What has to be transformed to become customer first?

What are we transforming from? Where are we transforming to?

When companies began their journey to digital, it was about access. Make products and services, your processes, available online.

Access has been achieved. To a large extent, companies and their offerings are accessible online. They are already digital. There’s more to do, but that more is about iterating, not transforming.

The basis of competition is the experience

If companies are no longer competing based upon ‘access to a process’ (since companies are all online), what is the competitive vector of the future?

This is where ‘transformation’ comes to play.

The vector of digital competition is transforming from process to experience. More specifically, from giving access to your process in contrast to bundling your process in your customer’s experience.

The vector of digital competition is transforming from your process to the customer’s experience.

Making things digital gets you to a good product.

To be customer first, to ‘digitally transform’ your business, you must deliver a good product wrapped in a great experience.

It’s the ability to understand and model what it means to create a great experience that’s going to transform your company.