Digital Transformation: Darwin Was Right


It's an understated reality in life -- business and personal -- that if half the people are doing something good, half the people aren't doing something good. If half of big businesses are seriously engaged in digital transformation, what the heck are the other 50% doing?

Credit: Pixabay
Credit: Pixabay

A study by Forbes Insights, How to Win at Digital Transformation, found that half of senior executives say their organizations have made digital transformation a "top strategic priority." That's great progress, but it's also a sign that plenty of organizations aren't committed to that same digital transformation.

Unlike many research reports that take a "rah, rah" approach -- I sometimes see researchers praising the heavens because some tech concept has achieved a 10% adoption rate -- I'll give this report's sponsor, Hitachi Data Systems, credit for acknowledging that the other half must get on the ball.

"At the center of transformation is data. It is both the creator and accelerator that has proven to be the currency of IT organizations. By failing to unlock the potential of data, organizations are falling short of their own transformation," said Asim Zaheer, Chief Marketing Officer for Hitachi, in a press release.

Use of data and analytics is a key element in the digital transformation process, but only 44% of the 573 respondents said they rate themselves as advanced or leaders in data and analytics. Fewer than half of respondents said that cross-functional teams are involved in developing and implementing a transformation strategy, leaving the bulk of the work to IT.

Digital transformation isn't just about using analytics, mobile technologies, and digital initiatives such as improved customer experience. It calls for rethinking how the organization operates, its core processes, and who gets hired.

Technology and business thought leaders are making a big deal about digital transformation today, as if it is something new. In reality, today's digital transformation is rooted in change that goes back at least as far as the introduction of the PC. Some corporate leaders didn't embrace the PC, or the other key digital components that followed, including the Web, mobile technologies, big data, and social media. The mindset always seemed to be, "What are we going to do with this?" (With the underlying thought being, "Can't it just go away?")

The mindset should have been, "How is this going to change the way we do business?" Or, "How will this change the way our customers live and do business themselves?" After all, if your business model isn't in sync with what customers are doing, it isn't much of a model.

The old mindset has cost a lot of companies their corporate lives as competitors responded faster than they did, and startups arose unencumbered by old structures and thought processes.

If half of enterprises aren't giving serious thought to digital transformation, then half of the enterprises are still prime candidates for disruption. Maybe it's time to learn some lessons from the past 30 years. As Darwin showed, adapt or fade into history. Who wants to be known as Dodo Bird Inc.?

Where is your organization in its digital transformation?

James M. Connolly, Editor of All Analytics

Jim Connolly is a versatile and experienced technology journalist who has reported on IT trends for more than two decades. As editor of All Analytics he writes about the move to big data analytics and data-driven decision making. Over the years he has covered enterprise computing, the PC revolution, client/server, the evolution of the Internet, the rise of web-based business, and IT management. He has covered breaking industry news and has led teams focused on product reviews and technology trends. Throughout his tech journalism career, he has concentrated on serving the information needs of IT decision-makers in large organizations and has worked with those managers to help them learn from their peers and share their experiences in implementing leading-edge technologies through publications including Computerworld. Jim also has helped to launch a technology-focused startup, as one of the founding editors at TechTarget, and has served as editor of an established news organization focused on technology startups and the Boston-area venture capital sector at MassHighTech. A former crime reporter for the Boston Herald, he majored in journalism at Northeastern University.

MIT's Andrew McAfee Chronicles the Incredible Rate of Change

Author, MIT researcher, and Interop ITX keynoter Andrew McAfee is set to explore the ways technology is changing the way companies do business, and how more changes will happen at supersonic speed.

A2 Radio: So Far, So Fast in Embracing Data

Enterprises are adopting analytics technologies and concepts at a remarkable rate, as highlighted by a UBM Tech research report. Our team of experts discusses the findings on AllAnalytics Radio.


Re: They need to make it work first
  • 1/14/2017 10:27:12 AM
NO RATINGS

How true that we often want to see other transform, but not so much ourselves. That seems to be true of both the managerial type personality and other that are more followers. We want to see the boss change his administrative style and the boss want us to change our work style.

Re: Maybe they need to decide what it is
  • 12/21/2016 9:00:20 PM
NO RATINGS

..

Ariella writes


Technology should always be a means to an end, but I do think that some people get carried away with tech for its own sake and so forget about business efficiency and user experience.


 

... Not to mention customer experience ...

 

Re: Maybe they need to decide what it is
  • 12/20/2016 9:54:05 PM
NO RATINGS

@Lyndon_Henry: Great points regarding the definition. Joe's speculation about the term being a simple buzzword now seems highly likely given the quotes you've presented.

Re: They need to make it work first
  • 12/19/2016 10:18:38 PM
NO RATINGS

I wonder if those companies who are seemingly moving slowly on the digital highway might be ripe to be picked off by more progressive companies who might swoop in and by the company at an undervalued price. Then, transform the firm, and sell or operate it at a higher ROI?

Re: Maybe they need to decide what it is
  • 12/19/2016 2:44:49 PM
NO RATINGS

<This sorta suggests to me they don't actually have a clear definition. Plus, this got me thinking ... where is there a company that merely uses technology as an "end"? This conjures up an image of a company doing little more than having its execs and managers (and staff I presume) surrounding themselves with techy toys for the sake of having techy toys.>

@Lyndon_Henry Indeed, some companies might consider a digital transformation to consist of just putting all records in digital format, while others expect to apply analytics to their data and uses it for making their decisions. But there's no universal view. Technology should always be a means to an end, but I do think that some people get carried away with tech for its own sake and so forget about business efficiency and user experience.

 

 

Maybe they need to decide what it is
  • 12/5/2016 9:45:15 PM
NO RATINGS

..

OK, the notion that only 50% of companies are cool with digital transformation got me to wondering what "digital transformation" actually means. After all, carried to its ultimate conclusion, it could mean turning the entire company operation, including management, over to robots.

So I went to the Forbes article reporting the survey. I haven't read the entire article, but the authors do take a shot at a definition in the early pages:


What is digital transformation? The definition varies depending on the company, its leaders, and industry. However, there are areas where executives agree. Digital transformation uses technology as a means, not an end.


 So the definition "varies"? This sorta suggests to me they don't actually have a clear definition. Plus, this got me thinking ... where is there a company that merely uses technology as an "end"? This conjures up an image of a company doing little more than having its execs and managers (and staff I presume) surrounding themselves with techy toys for the sake of having techy toys.

As an example "among the leaders in digital transformation" the report cites the French company, Orange. 


Its 2020 strategy calls for digital interactions with all customers, both business-to-businss (B2B) as well as more than 250 million individual customers. The company's objective is for over half of customer interactions across Europe to be through digital channels by 2018.


 And this is a crucial goal because why? They don't want direct voice interactions, or direct human interactions, but digital interactions are the goal for their own sake? Maybe a compelling explanation is there, but this sorta sounds like pursuing technology as an end rather than a means ...

What led me into this confusion was the fact that I really cannot think of a single business I have encountered anywhere that has not undergone a "digital transformation" of some degree. Even self-employed individuals use PCs, laptops, tablets, smartphones in their business transactions. Every business I've encountered, large and small, uses PCs and other digital technology.

So the "digital transformation" implies what? The transformative step is to ...

 

Buzz of DT
  • 12/5/2016 12:05:01 PM
NO RATINGS

I suspect that part of what may be holding some of that other 50% back is the very term, "Digital Transformation."

It's really nothing new--just an umbrella term for IoT, cloud, virtualization, Big Data analytics, and related tech.  Insofar as that, it's an uber-buzzterm.  And I suspect that we've reached a point where some cynical execs' BS-o-meters have become calibrated a little too sensitively over the past couple of years of tech buzz.

Re: They need to make it work first
  • 12/5/2016 11:25:39 AM
NO RATINGS

@SaneIT. I've found over the years that people are fine with change, as long as it's other people who are changing. And, we want to do things just the way we always did but maybe be able to do it faster and with new capabilities.

Right, that thought process permeates every role and every level of an organization.

One other observation is that leadership (corporate, departmental, and IT) often is to blame. They demand change, including new ways to do things, but they don't really take the time to learn how and why things are currently done the way they are.

 

Re: They need to make it work first
  • 12/5/2016 8:34:40 AM
NO RATINGS

Your assessment of the half hearted ERP/CRM implementations fall into your original assessment of Digital Transformation...

"The old mindset has cost a lot of companies their corporate lives as competitors responded faster than they did, and startups arose unencumbered by old structures and thought processes."

It's change and getting some people/teams/companies to enact real change is incredibly difficult.  Startups that don't have processes carved in stone make the shift much more easily than the 20-30 year old company that has to fight with individuals who feel like the gatekeepers of all thing related to their department.  In most instances when you ask what they need to be more productive they want more people doing things the way they do them, not a new way to work.  This mindset permeates all levels of a company and doesn't change without intentionality. 

 

Re: They need to make it work first
  • 12/1/2016 9:11:53 AM
NO RATINGS

@MagneticNorth. Good point about ERP/CRM failure rates. True, those companies committed to steps into the digital world, but they also did it half-heartedly, and the suppliers weren't all that helpful (preferring to focus on pushing more app modules onto unsuspecting buyers than selling them just what they needed to get on track). I say companies often were half-hearted because I recall doing interviews with a lot of them, and the common thread was that they wanted to keep all of the same business processes and definitions that they'd used for many years rather than adopt what someone like Oracle, PeopleSoft or SAP had built in (even though those vendor processes might not have been optimal). As a result they had three or four year implementation timeframes (and escalating costs) because of the required customization, and training. Plus, that training was marked by end-user griping as much as anything of value.

I think that the key to an effective digitial transformation is for management to accept and advocate for a rethinking of business processes, and sometimes even the purpose of the business. We're starting to see that with some smart retailers who understand the omnichannel approach and some manufacturers -- even those with their roots in the 19th century -- that see that their knowledge and the data that they can provide to customers is as valuable as the equipment they sell.

Page 1 / 2   >   >>
INFORMATION RESOURCES
ANALYTICS IN ACTION
CARTERTOONS
VIEW ALL +
QUICK POLL
VIEW ALL +