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What is Digital anyway?
Information Technology (IT) has been supporting the business for several decades now, ‘Digital’ is a relative newcomer. It’s a trendy thing to talk about as we see a proliferation of Chief Digital Officers and Digital Strategy roles being filled here in Australia and overseas. And organisations everywhere are running Digital Transformation initiatives to try to digitise, remain relevant and competitive.
Even while we’re all doing it, there is still much confusion and consternation over what ‘Digital’ actually means. In it’s most technical form, it relates to forms of electronic technology that stores data as 1s and 0s. But that definition doesn’t really do all the hoohah justice, and you’ll find it hard to follow along with most conversations about digital if you see it in those terms.
We propose a different, broader, more useful definition.
Mind the gap
As technology has matured over time, IT have delivered systems to support more and more of the business we do. Initially we were just grateful to have computational support with isolated activities.
Now, we expect to see end-to-end processes systematised and automated as much as possible. Even business-critical systems are becoming dependent on IT. We now expect more of our technology and so do our customers.
It’s become painfully clear there’s a gap between the business, the technology and the customer. And those companies (often startups) that can align the three and close the gap are winning big and putting larger, more established players out of the game. Organisations are using Digital Transformation to try and keep up, so the best-fit definition is:
‘Digital is how we bridge the gap between the business, technology and customer’
So digital isn’t really about technology, it’s just good business.
So then what is Digital Transformation?
So by that definition of ‘Digital’, when we say ‘Digital Transformation’, we are talking about nothing less than Business Transformation and it’s ongoing. Because even once you’re done digitising, you won’t be done transforming. The pace of change and technology adoption has increased. Transformation is now our BAU, and we all have to get used to that.
A new way of doing things
There is an understanding now that ‘Digital is less of a thing you do, and more a way of doing things’
A new way of doing things, based on relatively new ways of looking at the world.
There are four non-traditional mindsets that drive Digital Transformation:
- Customer-centric—Customers expect this now and their expectations will continue to increase.
- Agile and lean processes—Needed to mitigate the risk of trying new things so failing, learning and refining can happen faster and with less expense.
- New technology—Enabling new ways of solving problems, not possible previously.
- Disruptive innovation—Forcing us to grow lest we become irrelevant.
Organisations around the world are trying to play catch up. Unfortunately most attempts to date have been superficial at best.
The lack of serious progress to date is due to a number of factors outside the control or ability to influence of those tasked with leading Digital Transformation initiatives. But more on that in a future post.
It’s worth reflecting on why we would bother. Sure, customers expectations have increased, does that mean we need to deliver?
It does if we want to stay relevant and compete with other providers—and this applies as much to government as to other large organisations.
There are four key focus areas:
- Process efficiency—Freeing up staff time by automating processes can lead to focusing that time in on increasing demand and complexity of doing business.
- Business intelligence—We have lots of data to play with, and we know that buried in there somewhere is value and insight waiting to be mined.
- Marketing and engagement—More and more the two are becoming synonymous. It’s becoming a continuous feedback loop, as it should be.
- Customer experience—Customer’s are expecting more polished, personalised and digital experiences.
These lead ultimately to cost savings, increased profit, discovery of new markets or product lines, or other competitive advantage.
That’s it. Pretty straightforward really. Digital is about creating a modern organisation through new ways of working to bridge the gap between the business, technology, and customer.
Of course there are other definitions and discussion is welcome. Leave a comment. What does digital mean in your organisation? Which focus area is highest priority at the moment?