Digital Transformation Five Years On: Hype Or Reality?

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The hype machine around digital transformation has been going strong for over five years now. Today, has digital transformation worn out its welcome? Are people still confused about what it is? Or perhaps its time has come, as enterprises and public-sector organizations around the world achieve real successes with their digital transformation initiatives?

Jason Bloomberg, President, Intellyx;
Jason will be speaking at the Business Change & Transformation Conference Europe18-20 March 2019 on the subject,Digital Transformation Five Years On: Success or Failure?

To get a read on the current mood around digital transformation, I Googled for news stories featuring the term. In a mere seven days, dozens of articles discussed the notion, appearing in both technical and business sites around the world.
The encouraging news: for the most part, opinions align with the four core characteristics I believe are essential for defining digital transformation. Here’s what I found.

While digital transformation is software-empowered, it’s most important characteristic is the fact that it is customer-driven.

Dispelling the canard that digital transformation is about technology is finally showing signs of catching on. “While every industry has different customer types, the customer is always waiting to be wowed by a flawless experience,” says Phil Walsh, Head of North American Field Marketing at Cognizant, in an article for Market Mogul. “This is true whether the focus is B2B or B2C; this distinction, frankly, does not really matter when it comes to digital transformation.”

This customer-focused principle holds in the public sector as well. “For public bodies, digital transformation is more than a revamped website, unified communications, a new CRM system, a Facebook profile or giving employees iPads,” explains Rob Whiteman, CEO of the Chartered Institute of Public Finance & Accountancy (CIPFA) in the UK, in an article for Open Access Government. “It’s fundamentally changing the way that organisations design and deliver services and how they operate internally.”

Not everybody is on the same page, however. Some technology vendors still struggle with this story. As I wrote last May, Dell Technologies for one talks a good game but fails to connect the dots between technology and customer-centricity.

Cisco Systems also faces challenges with this technology tunnel vision. “At its core, digital transformation is about adopting technology and harnessing its power to overcome business challenges and unlock growth opportunities,” opines Vatsun Thirapatarapong, managing director of Cisco in Thailand and Indochina, in an article for The Nation. “For any company to be successful with its digital transformation, it needs to fully understand the implications of technology, the impact it can deliver as well as the challenges with its adoption.”

Thirapatarapong may not speak for all of Cisco to be sure, and his statement is true on its face, but he fails to place digital transformation into the customer context – a core misunderstanding that is fortunately becoming less prevalent over time.

Digital transformation is not simply about the customer experience but requires end-to-end transformation across the organization.

Driving end-to-end change that is nevertheless customer-first is a challenge to be sure – but one that organizations are rising to. “Digital at scale is the process of reinventing a business, using digital technologies in the front, middle, and end operations, to make the organisation perform better, making fewer mistakes,” Cognizant’s Walsh continues. “All of this is done with the customer in mind.”

This principle holds in B2B companies as well as B2C. “Rather than having that quite narrow tactical discussion with the business around software for instance, we engage them in business terms, better understanding their needs and desired outcomes before analysing how to positively affect a change to support them,” says Chris Leonard, Director of Strategy and Digital Transformation for Plains Midstream Canada (PMC), a Canadian petroleum pipeline company, in an article for Energy Digital. “Sometimes our aim is merely digitally enabling what we have, but we are absolutely planning for digital optimisation and transformation.”

The transformation part of the digital transformation story is more about organizational and cultural change than technology change.

The increased focus on organizational and cultural change is perhaps the most significant shift in understanding of digital transformation in my four years as a Forbes contributor, as this week’s articles illustrated. “Transformation is enabled and driven by company culture. Top-down, companies must re-imagine themselves as more than just makers or sellers of ‘widgets’ or services,” explains Ankur Laroia, strategic solutions leader at software vendor Alfresco, in an article for Adweek. “Today’s agile DevOps culture means that companies really can ‘imagineer’ and release new customer-facing features and functionality—almost continuously—in response to shifting business conditions.”

This ‘DevOps culture’ is an integral part of the digital transformation story, even though it focuses on delivering software. However, innovation is typically the focus of digital’s cultural change. “Culture provides the guidelines that steer employees to make choices that advance the organization’s goals,” says Boston Consulting Group senior partner Jim Hemerling in an article for TechRepublic. “And the case for fostering a digital culture is powerful: it empowers people to deliver faster results, attracts talent, and pushes innovation.”

It’s good to see many enterprise software vendors getting on this bandwagon. “It’s the combination of technology and business thinking that really enables change,” according to Pegasystems CEO Alan Trefler in an article for SearchCRM. “You can’t do it just with tech; you can’t do it just with made-up slides.”

Digital transformation doesn’t have an end state. Rather, it’s a never-ending journey to establishing change itself as a core competency across the organization.

It’s difficult to propose an initiative that never ends, and even more of a challenge to budget for one. Nevertheless, digital transformation is unlike earlier business transformation fads in that organizations must deal with change differently than they ever have before.

Innovativeness – and thus strategic competitiveness – hangs in the balance. “How do you change how you’re getting to market with your products when consumer behaviors are changing based on the pace of innovation that’s happening at light speed?” asks Jennifer Artley, president of BT (British Telecom) in the Americas, in an article for Light Reading. “From my perspective, it’s really about companies trying to think younger, faster, and more innovatively, and then bring those ideas to market faster than they ever have before.”

When Artley refers to the pace of innovation ‘happening at light speed,’ it’s important to translate the ‘light speed’ metaphor into the reality of dealing with change.

Given that digital transformation is more about how people deal with change than about the tools that they use, the bar is clearly set: the companies that will survive and thrive in the digital era are the ones that deal with change better and faster.

Jason Bloomberg is a leading IT industry analyst, Forbes contributor, keynote speaker, and globally recognized expert on multiple disruptive trends in enterprise technology and digital transformation. He is founder and president of Agile Digital Transformation analyst firm Intellyx. He is ranked #5 on Onalytica’s list of top Digital Transformation influencers for 2018 and #15 on Jax’s list of top DevOps influencers for 2017, the only person to appear on both lists. Mr. Bloomberg is the author or coauthor of four books, including The Agile Architecture Revolution (Wiley, 2013). His next book, Agile Digital Transformation, is due within the next year. Follow Jason @theebizwizard

Copyright Jason Bloomberg, Intellyx LLC. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers.

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