- The phrase, digital transformation,
is thrown around a lot these days.
But what does it really mean?
What constitutes true digital transformation?
I can tell you from my experience advising many companies
that often investing in modern technologies
is believed to be digital transformation.
This is an important ingredient
but it's a small part of the journey.
If you don't also change the way people work
and the methods they use, then your destination
will be far short of true digital transformation.
Digital transformation should lead to changes
to one's operating model and all aspects of the business
from people practices and skills,
processes, and then the technology
that some mistake for the entire journey.
In order to achieve meaningful outcomes
and sustainably strong performance in the digital world,
thinking more comprehensively is a must.
How will you evaluate how far you've gone
and how far you have left to go in this journey?
A digital maturity assessment can be helpful.
The first step in maturing your organization
is digitization which involves converting analog
or physical information into a digital format.
Most businesses today have digitized in some meaningful way.
For example, in the early days of the internet,
automakers put some information about their products online.
This represented digitization.
The next step in the journey is digitalization,
which suggests the use of digital technologies
and digitally-enabled approaches
to improve business models and processes.
As recently as 2011, General Motors executives
were quoted in The Wall Street Journal as saying
that, "Self-driving technology seems so far
"out of the playbook that it wasn't even addressable."
But as these technologies advance,
some traditional players move to digitalization
often by creating separate
digital groups within their businesses.
They still use legacy skills, processes and technologies
across most of their operations
but these innovation labs of sorts
allow them to experiment to a greater extent.
The final step is true digital transformation,
which is the coordinated digitalization at scale
diffused through the operating model
and all aspects of the business
including people, processes, technologies and metrics.
For example, Ford recently spawn out a new entity
Ford Autonomous Vehicles to accelerate
its self-driving business
and capitalize on market opportunities.
It's also re-aligned IT
under its Global Operations organization
to accelerate integration.
This follows the spin-out of Ford's Smart Mobility
which aims to help Ford become a mobility company.
Ford is in full digital transformation mode.
The words you use matter.
It's important for you to evaluate and develop
a more accurate depiction of where you are
on the digitization, digitalization,
and digital transformation continuum.
Plot the course for continuum maturity and advancement.