Why some organizations need "the" digital transformation?
Where does the need come from? When did it start whispering to board members' ears as a silver bullet to all organizational and growth problems?
The digital transformation buzzword is mostly applied to organizations (public or private) where technology has not been leveraged to its full potential. Hence the use of the word “digital”, which implies the use of recent, not necessarily emerging, technology. The remaining word is transformation, which surges from the necessary, and many times desired, changes that come with the introduction of technology into an activity or process.
So why have organizations ignored technology and got themselves into this trap, for which digital transformation seems to be the only way out?
The short answer is… They were not looking and failed to act :)
Of course I’m over simplifying, but if you look to the graph below, and bear in mind that companies used to rely on 7-8 year strategic plans, it is easy to understand why many smart people failed to grasp the impacts of the technology revolution.
Most of the companies adopted technology on the basis that it was a necessary evil, an additional operational cost to the company. This necessary evil was meant to help organizations get rid of administrative manual labor, enhance communication and create an easy way to register/access operational and historical data .
For the 1st decade of the 2000s things changed, but core business technologies (ERPs) did not change that much. E-mail was broadly used as “the” communication tool and it seemed like the role of technology was somehow well understood and defined.
During the 2nd decade of the 2000s many organizations stopped paying attention to technology. Decision makers (board members and directors) assumed that the role of technology was now clear and wouldn’t change much. Big investments were made and it was now time to reap the benefits.
The damage was done.
The gap between the implemented technology capabilities and business needs started to grow. Somethings, that you might easily relate to, started to be noticeable:
Workers started creating complex Excel spreadsheets to be used as registry or operational support systems, many times creating and embedding business rules within these files.
Lack of visibility of an ever growing number of projects and tasks gave birth to a heavy use of e-mail, not as a communication tool but as an operational tool (e.g. workflows).
Core systems were many times subject to well payed customizations, in a vain hope that some quick fixes would suffice and keep the business on track, without breaking the budget.
It is now 2022, Digital Transformation is perceived as a silver bullet to all the inefficiencies across the value chain and as a path towards exponential growth. Summing up the starting points are usually:
a lack of operational efficiency
a need to power up or complement an existing value proposition
a need to explore what’s beyond the business as usual
***In the next editions my goal is to explore the starting points mentioned above, as well as aspects related to strategy, management and operational response for a Digital Transformation team. Please bear in mind that this is my understanding as someone in the field and not a thorough academic thinking. There are certainly aspects that I’m missing, but I guess that is part of the conversation that I intend to kickstart.***