The most popular definition can be found in Wikipedia – “Digital transformation is the change associated with the application of digital technology in all aspects of human society”.
As defined in Wikipedia above we see a slightly limited definition, as it covers only the digital half of the term “Digital Transformation”. The other half is the word “transformation”. When we talk of transformation, we associate it with a “Paradigm Shift” or Foundational change. This essentially means in the context of a business; that every aspect of the business from the operating model to the consumer needs; changes. This is necessitated by changes in consumer demand, competition and the impact of technology..
Many organizations have taken “Digital Transformation” in its literal sense, using digital technology in business for example using social media in a more aggressive manner, or having more interactive websites and or apps. Digital Transformation is now looked at as Transformation of business by the impact of Digital Technology, or being more specific Information Technology. Information technology has begun influencing business to such a large extent that business dynamics have been transformed. Logistics companies run on IT, e-commerce has changed retail, a downing of IT can stop all travel. Witness the outage in August 2016 wherein an outage at Delta airlines caused 2300 flights to be cancelled. HSBC, RBS and so many other banks have been greatly affected by well reported IT failures.
So, we come to the moot point, all business, no matter which industry they operate in, are heavily reliant on IT. It is not enough for one or two functions like Marketing, Sales, Production to be digitally or IT aware and comfortable. All support departments HR, Finance, Purchase and others must be equally aboard on “Digital Transformation”.
Digital Transformation is much more. Digital transformation is a journey across multiple interconnected elements, including digital technologies surrounding the interconnected world, societal shifts, new economic realities underpinned by the human element. The human element is key at all levels involving skills, culture, empowerment and collaboration. Business models are being changed by millennials and GenZ; where ownership is no longer critical. The sharing economy is the new normal.
Digital business transformation requires catering the Consumer. Changing consumer behavior and expectations require changes to the user experience. Convenience, speed and choice is the key. Businesses need to be able to provide access catering to these requirements. Technology is an enabler, design and approach is key.
In conclusion collaboration, communication, design, human-centricity, technology, speed, convenience, business processes, partnerships and finally technology are the touchpoints for a Digital Transformation initiative.
From an organizational perspective, this can be viewed as Enterprise Agility.
Enterprise agility: “The ability of an organization to move and adapt quickly in response to shifting customer and market needs.” Agile Shift – Axelos