Digital Transformation – Part I – What is Digital Transformation?

In the business world, COVID-19 expedited many changes that were already in the works. Businesses around the globe were already employing more technologies and transitioning their companies more fully into the digital world (a process known as digital transformation) prior to the 2020 global pandemic. However, the transition is more important than ever.

According to one source, digital transformation is the complete integration of digital technology across a company, a process that fundamentally changes the company culture and affects how a company communicates with its employees and customers. It means rethinking old operating models, perhaps experimenting more in response to competitors, and continually evolving with the ever-changing market. This is the first article in a three-part series that will explore what digital transformation looks like, the specific steps necessary for success, and whether the process is worth the money and effort.

McKinsey’s Digital Quotient survey from April 2019 states that, “93 percent of executives believe that digital [transformation] is critical to achieving their strategic goals.” Yet, even with that kind of urgency, only 17% of employees in the U.S. strongly agree that their companies are adequately implementing the digital technologies that would most benefit the company and assist their workers in achieving higher productivity.

Start with the Why

For a company to move forward with a full digital transformation, they have to have a solid “why,” or a clear problem that needs to be solved. Jay Ferro, CIO of Quikrete, explains, “The ‘why’ of your organization’s digital transformation might be around improving customer experience, reducing friction, increasing productivity, or elevating profitability” (The Enterpriser’s Project 2020).

In solving a specific problem, leadership and company culture need to be at the heart of the change. Jim Swanson, CIO of Johnson and Johnson, says, “In the center of it all is leadership and culture. You could have all those things—the customer view, the products and services, data, and really cool technologies—but if leadership and culture aren’t at the heart, it fails” (The Enterpriser’s Project 2018).

Have a Clear Vision

Even if a company is clear about their purpose and reasoning behind undergoing a digital transformation, leadership isn’t always clear about how to implement the vision. To some, it may mean to simply go paperless, while to others it may mean implementing AI technologies. Expectations of a digital transformation are all over the place, which prevents companies from moving forward in a productive way to fully utilize all the available technologies.

Necessary for Survival

Regardless, of the individual reasons why a business might choose to transform, the fact is, they must. According to Enterpriser’s Project 2022, it’s about survival: “In the wake of the pandemic, an organization’s ability to adapt quickly to supply chain disruptions, time to market pressures, and rapidly changing customer expectations has become critical.”

The next article in this series will explore more about the “how” of a digital transformation, digging in to what it looks like, how to do it successfully, and whether it is an ongoing process or a one-time effort.