The challenges of Digital Transformation

By: Cristián Melo G.

“Be fruitful and automatizaos” is a phrase that I found while reviewing the prologue of a thesis title while preparing my own thesis. At that time I did not imagine that today, over 30 years later, that sentence would follow absolutely force. To be rigorous, the phrase never ceased to be in force as it was strengthened with the advancement of new technologies, which have been breaking hard and becoming fit faster. Thus today we speak of “digital transformation”, a goal that has become the aspiration of the vast majority of companies around the world, although many continue to understand the depths of its meaning and its implications without real.

What is actually the digital transformation? There are many definitions, as many as thousands of companies around the world after selling some tool either hardware or software use the concept as a wildcard for such purposes. I searched and found some definitions of “Digital Transformation” on the web, which give greater insight into this, as the following four:

It is the integration of digital technology in all areas of a company, fundamentally changing the way it operates and providing value to its customers.

It is the reinvention of an organization through the use of digital technology to improve the way the organization performs and serves its constituents.

It is the process of changing something completely with digital tools; it involves the adoption of new technologies and the necessary cultural changes to improve or replace existing resources.

It is the process by which organizations or companies reorganize their work methods and strategies in general, to obtain more benefits thanks to the digitalization of processes and the dynamic implementation of new technologies.

When reading this, different phrases and questions arise that we have heard in some companies, but that show little understanding of the speed at which the market is evolving: “Why are we going to get involved in a digital transformation initiative if today we are doing well?” or “Let’s see later, we don’t need it now.” Emblematic cases of technological disruption worldwide, such as Blockbuster, Blackberry or Palm, have shown us what happens when you do not react in time.

Other companies, which do recognize that it is crucial to take this path, mention other types of questions such as “where do we start?, what steps must be followed?, do we have to put together a technology team? a web page, we show ourselves on social networks and we publish notices in google ads?”, and a long etcetera.

I think that one of the great goals of Digital Transformation, even as a definition, is to change the way the company operates, through the use of innovative technologies, to achieve greater benefits and stay in the market. Meeting such an ambitious goal should allow the company to be very competitive in a world that is already competitive today, on a global scale. This, which seems simple, implies many things, where fundamentally we must mention the following five work fronts to take into consideration: Clients, Internal Culture, Organization, Processes and Technology.

Each word has a very clear meaning. The first, in my opinion the most important, is Customers, and it means that any change that you want to make must benefit the customer. The focus should always be on the customer.

The second, Internal Culture, considers that companies have a way of being, their own dynamics, a personality, which must be aligned with the changes that may arise. Organizational change management begins to take on a very relevant role when we begin to work on culture.

The third front, Organization, closely related to Culture, shows that all teams must be aligned, top-down, in what is going to be done. You have to show the need and sense of urgency that an initiative of this type has for a company. We are talking in many cases about the very subsistence of the company, so critical. It is not about imposing something that the organization will not accept; the goal is to sell it and get people to buy it and make it their own. The idea is to minimize resistance to change, since taking teams out of their comfort zone always has an impact.

The fourth word, Processes, refers to the fact that, when wanting to address changes, we must begin by reviewing the processes, starting with the most important ones. Having the documentation of the AS-IS processes (as they are today) is a valuable starting point, but if they do not exist, they must be raised to start from there to put together the TO-BE processes (as we want them to be).

The fifth front, Technology, refers to the fact that one must have knowledge of what currently exists in the market for new technologies, or have the capacity to investigate permanently, in order to apply them in the creation of new processes (the TO-BE) mentioned above.

If you notice, we leave the word Technology last on the list, not because it is less important but because it is not where you should start if you want to carry out a Digital Transformation initiative. Technology is just a tool for it.

All the words mentioned above are a fundamental part when starting to prepare the Strategy, a basic topic before undertaking the initiative. This strategy begins by defining the goals to be achieved. It is important to note that goals are often not quantifiable or measurable. For example, I can define as a goal to learn to play the piano. The objectives that are associated with each goal are the ones that are going to land what we want since they are measurable and quantifiable. Following the example of learning to play the piano, my goals might be to: 1) Take piano lessons for ten weeks straight; 2) Learn to play five songs correctly in that period of time and, 3) At the end of ten weeks, give a concert to my friends and play the five songs learned.

Additionally, we must consider that no company is the same as another, even if they are from the same economic sector, and these differences make carrying out a Digital Transformation initiative a little more complex than copying and pasting. There are many market experiences that show that models that worked in one organization when applied in another did not.

Finally, it is no less important to mention that Digital Transformation is a process that must be considered within the continuous improvement activities that any company that intends to remain current in today’s competitive market must have.