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What is Digital Transformation?

Executive Summary

What can data do for your business? That’s the question Isaac Sacolick seeks to answer as he builds a new definition of digital transformation and explains how it can impact your company.

  • In order to attain or maintain market leadership and circumvent disruptive competitors, a company must be willing to reimagine its business model, products, and vision.
  • An IT department that’s using outdated technologies and doesn’t understand how to meet customer needs will likely be of little, if any, support when it comes to rolling out your digital agenda.
  • Your first step to transforming your company’s digital future is to understand where you are and where you want to be. Next, you’ll need to adopt an organizational model that enables you to execute a digital agenda that’s based on customer and market feedback.

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:

  1. 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?
  2. 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.

How to nail down a definition of DIGITAL TRANSFORMATION

Defining digital business, a digital strategy, or the vision behind a digital transformation is an important exercise to take on in order to ensure a shared vision among executives. They must reflect on what’s driving digital opportunities, the impact of new competitors, and the aggregate risks to legacy businesses. A transformation charter needs to be defined, and there are various approaches to bringing executives together to align, define, and document a strategic vision.

But the question I ask is whether you have a seat at the table when strategic planning efforts focus on digital strategy and transformation. In fact, if digital is not on the agenda for strategic planning, do you have sufficient clout and executive relationships to make sure it’s added to the agenda? Have you demonstrated success to be given ownership of the digital agenda? How will organizations rely or redefine their leadership team to evolve digital capabilities? Will the CIO, the CMO, the Strategic Officer, or the new Chief Digital Officer be on the committee, and who will be leading it?

The path to get a seat at the table, to own digital programs, or to be the steward of the digital strategy is to illustrate that you and your team can define, mature, and master digital practices. Digital remains a new and emerging skill at most enterprises, so when you can lead by example, then that will pave the way for others to listen, consult, and ultimately partner on the transformation.

That’s been my experience across three different organizations that took on digital strategies and transformation programs very differently. The rest of this book [Driving Digital] spells out these practices so that you can embark on your journey.

I am going to start with the fundamental practices of a digitally driven IT organization. You can’t transform and establish digital capabilities without your technology organization operating differently with new practices, skills, and platforms. You can’t have a seat at the strategic table if your organization views IT as a poor performing service desk, a champion of risk management practices, or stewards of clunky, outdated technologies. You won’t hold an executive’s attention if the IT team’s perspective on meeting business need is centered around service levels, software releases, or compliance programs. Frustrated business leaders will find external business partners, look to outsource, or commission rogue technologies if they think the IT team can’t understand customer needs and execute a digital agenda.

The first place to start is to develop the organizational model and practices that enable the executing of a digital agenda driven by customer and market feedback. You need the IT organization to learn agile practices and develop an agile culture.

Excerpted with permission from Driving Digital: The Leader’s Guide to Business Transformation Through Technology by Isaac Sacolick, copyright Isaac Sacolick.

Bring It Home

My very first corporate job was in IT as a software analyst. My two co-workers and I spent our days on the phone with branch employees talking them through software patches or assuring them that if they could just mail their dinosaur of a computer in, we’d help fix it.

Had my life depended on it, I wouldn’t have been able to tell you what the definition of digital transformation meant. For instead of being focused on mastering updated digital practices or technology, it was all about customer support, compliance, and survival. Sound familiar?

How does your company view digital transformation? Is it a priority? Comment below with one way you think a digital strategy could transform your company. ~ HarperCollins Leadership Essentials

Isaac Sacolick

Isaac Sacolick is a successful CIO who has led digital transformation, innovation, agile, and data science programs in multiple organizations. He has transformed underperforming businesses by delivering new digital products, investing in strategic technologies, enabling agile practices, outsourcing commodity services and establishing performance metrics.

Want to read more? Get the book!

Every organization makes plans for updating products, technologies, and business processes. But that’s not enough anymore for the twenty-first-century company. The race is now on for everyone to become a digital enterprise. For those individuals who have been charged with leading their company’s technology-driven change, the pressure is intense while the correct path forward unclear.Help has arrived! In Driving Digital, author Isaac Sacolick shares the lessons he’s learned over the years as he has successfully spearheaded multiple transformations and helped shape digital-business best practices.

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