Recently I was having a conversation about digital transformation. The person asked me what it really meant and if I could describe it.
"Digital Transformation" is a frequently used term these days, particularly in the enterprise. Some might say it's a buzz word.
Irrespective its meaning is extremely relevant to enterprises.
Wikipedia explains the term "Digital Transformation" a follows (I've bolded the text relevant for the enterprise):
Digital transformation is the change associated with the application of digital technology in all aspects of human society.
Digital transformation may be thought of as the third stage of embracing digital technologies:
digital competence → digital usage → digital transformation
with usage and transformative ability informing digital literacy.
The transformation stage means that digital usages inherently **enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods.**
In a narrower sense, "digital transformation" may refer to the concept of "going paperless" and affects both individual businesses and whole segments of the society, such as government, mass communications, art, medicine, and science.
While this is OK I feel it's good to state a story that resonates on a personal level while also explaining the business opportunity. Let's make Digital Transformation human:
An example of Digital Transformation is my almost daily routine of visiting Starbucks to get my triple shot tall latte. I used to have to wait in line to order my drink then wait for it to be created and delivered to me at the counter. Now with the mobile app I can press a few buttons and be in and out of Starbucks with a perfect drink to my liking in only a few minutes. This is a process that was previously not feasible for Starbucks to offer but with digital it is easy and the benefits for everyone far outweigh the cost.
For me the benefit is a more convenient morning routine. The value skyrockets when I'm in a rush. Because of this feature I an more eager to visit Starbucks and while the so cuts down my time spent in the store, I am significantly more loyal to Starbucks (Note to track the right metrics!).
Starbucks gains value in a number of ways:
1. Starbucks collects my data that shows what I order, when and where = this data can be used across the enterprise from hyper personalizing, business processes like staffing and supply chain, product and service development (including touch point and store design) and elements around new business models (coffee to pickup is essentially a new business model enabled by digital).
Here is a completely made up and not great example: Starbucks Morning Routine: Delivering more than coffee to make your day amazing. The Starbucks app connects with your news feed, calendar, todos and an app like Accompany to let you get ready while you sip. 🙂
2. Starbucks has me download and use their app = opportunities for customer relationship building.
3. Low hanging fruit can be captured as processes such as payment are automated = less error, cost, time to execute for a total of more throughout at lower cost.
4. Additional value of freeing up space in the cue to make technology laggards frown less.
Digital Transformation is impacting every business today. Every business has the opportunity to either embrace digital or find itself on the defensive as someone leverages digital against them.
How is Digital Transformation impacting your business and are you using it to your advantage or passively being disrupted?