Terminology is important—and it’s particularly important for us to define terms that are central to what we do. So when it comes to the subject of digital transformation, what exactly are we talking about?
In speaking with clients and industry thought leaders, I’ve come to realize that the term “digital transformation” has a different meaning to different people. For a term that is so widely used — and that, on its surface, seems pretty straightforward — the range of interpretation is remarkable. It’s a bit like when we say “I’ll do it later.” “Later” to one person means “before the sun goes down today.” “Later” to another person means “sometime in the future”, and it could mean days or weeks in their mind. “Later” to a third person can mean “I have no plans to do it, and this is my way of telling you nicely.”
Because the term is so essential to the work we do for our clients, I thought it would be helpful to define what digital transformation means to us here at Pythian. There’s so much we can say on the topic, so I plan to follow up with a series of articles about how I’ve seen it implemented, or worse, not implemented or even embraced as a concept.
To start, “digital transformation” is about technology. I know that to some people it isn’t, but I disagree. These days, you can’t transform your business without technology. It’s not about which technology you choose, as much as it’s about how to use it. Even more specifically, we’ve found that the businesses that are achieving positive transformation are using technology to capitalize on data. I have yet to see a single transformation project that didn’t use data as a major component of its success.
Let’s look at the term “transformation.” This equates to change, but it doesn’t mean change for its own sake. The change we’re talking about has to benefit the business. However, the factor that can make or break successful change is people. Their attitudes, preconceptions, and ideas almost always have to be aligned with the change for successful transformation to occur. People need to get behind the initiative, people have to fund it, people have to develop it, and people have to support it once it’s developed. And we all know that getting people to change can be more difficult than developing any new technology. In short, the transformative capabilities inherent in technology can only be realized when coupled with the willingness to embrace change.
Why Digital Transformation?
Why is the concept of digital transformation important in the first place? At Pythian, we believe that it’s about using technology and data to change your business for the better. What do we mean when we say “for the better”? Therein lies the controversy. “For the better” means different things to different people depending on their company’s key objectives.
“For the better” can mean:
- Becoming more efficient to drive costs down so your profitability can improve
- Reducing mistakes and improving your reputation, or the quality of your product
- Differentiating your product to get ahead of the competition
- Doing what you do, only faster than your competitors
- Creating new revenue streams
- Improving the customer experience. This is a big one, so I will dedicate an entire blog post to exploring exactly what it means.
Digital transformation is the key to achieving any one, or all of these benefits, and knowing your objectives and priorities will help you shape your digital transformation initiative. So to start, focus less on what digital transformation is, and more on what you want the outcome of a transformation to be.