Here is the definition I offered in a recent interview with Forbes:
Digital transformation is not just about technology and its implementation. It’s about looking at the business strategy through the lens of technical capabilities and how that changes how you are operating and generating revenues.
Ultimately, digital transformation is about automating more of operations, generating revenue-leveraging digital capabilities, and bringing new convenience and value to customers. For existing businesses, it requires a fundamental review of everything it does today because digital disruption enables new product offerings and competition from nontraditional sources.
A transformation requires some basic understanding of where you are and where you think you want to be. Let’s call the endpoint a vision of your organization’s digital future. The transformation, therefore, is a journey that iterates you toward this digital future while enabling you to better define and even pivot your vision of the future.
Later chapters [of Driving Digital] will cover which aspects of the current state are important to measure and include more details on how to define a vision, but for now I will keep this simple.
To kick off the definition of vision and transformation, I recommend reviewing and answering two relatively straightforward questions:
- What would a startup do to disrupt this business model, compete digitally with your most successful products, or radically change the cost structure by fully automating key business processes? What would they do absent of legacy, physical constraints, and perhaps some regulation to compete or flank an existing model, product, or process?
- How do you define your digital future? If this digital disruptor appeared, what would you have to become to better compete with them? What would your model, product, or process need to become, and how could you use existing assets as a competitive edge?
If you can answer these two basic questions with even some fuzziness (no one has a perfect crystal ball), then digital transformation is the path toward your digital future that you target.