If Digital Transformation is the Answer…What’s the Question?
Some time ago, long before the covid lockdown era, I was spending large parts of each week flying between endless customer meetings in a sacrificial shoulder-to-cry-on role where I acted as part troubleshooter and part strategist. Needless-to-say, these were often difficult discussions, never quite knowing what to expect from one day to the next.
To cheer myself up I’d play a game of “what Monty Python sketch will I walk into tomorrow?”. This involved predicting the surreal conversation that will occur in terms many will recognize: From “is this the right room for an argument?” and “nobody expects the Spanish Inquisition” to “the communist leaders’ quiz” where a group of experts is asked ridiculously inappropriate questions with the prospect of winning meaningless prizes. Yes, I still bear the scars of those meetings.
These days, however, I seem to have shifted into a different gear. In discussions with a variety of organizations I am asked to provide insights, strategies, and commentary on digital transformation and its impact. To offer something new to an ill-defined request in a widely defined domain. The broad, inclusive characteristic of this remit leads to a key pre-requisite that must be faced in each case:
If digital transformation is the answer, what is the question?
A fundamental challenge for most organizations is to find ways to frame the discussions on digital strategy taking place within their organization. Then, to use this to build their understanding of digital transformation to enable them to deliver products and services appropriate for our digital world, using digital approaches to optimize their delivery, and supporting a digitally diverse business ecosystem. In recently formed organizations this challenge pushes many toward new, wholly digital approaches with lightweight processes, minimal investment in capital assets, and flexible working practices. In Large Established Organizations (LEOs) this challenge requires careful consideration toward managing existing technology investments in staff and equipment, making revisions to well-understood operating procedures, and driving enhancements in support mechanisms for existing and new clients as they redefine expectations about the products and services they consume. Addressing these needs is a high priority today.
Attempts to define digital transformation abound. For example, in Gregory Vial’s review he observed 23 distinct definitions across 28 academic articles. In general, they present a broad perspective characterized by using new digital technologies (such as emerging mobile communications, artificial intelligence, cloud-hosted services, blockchain-managed transactions, and connected devices via the Internet-of-Things (IoT)), enabling major business improvements (both in increasing efficiency of existing business processes and enabling entirely new ones), enhancing customer experience (to be online and accessible with greater availability), streamlining operations (by eliminating manual steps to be replaced by automation and using data to enhance predictive interventions), or creating new business model opportunities (encouraging innovation in how value is created, managed, shared, and maintained).
In my work with businesses and public sector organizations, I usually adopt a broad, intuitive perspective using the following definition:
Digital transformation describes a broad set of activities aimed at improving efficiency, value, and outcomes in delivering sustainable change in the use of digital technologies for the benefit of business, organizations, individuals, and society.
Then, to understand the key elements of digital transformation, I have found it useful to consider 5 different questions to reveal more about the key underlying elements and their priority.
- Digitization: What progress has been made converting data, transactions, and business artifacts into digital formats?
- Digital Process Modeling: How are you deploying digital technologies and processes to support key business activities?
- Digital Value Analysis: Which digital approaches are being adopted to generate new kinds of value from your products and services, information sources, and behavioral insights?
- Digital Business Model Innovation: Where in your environment do you see restructuring and redefinition of existing markets, customers, and supply chains that encourage new digital business opportunities?
- Digital Organizational Redesign: How are you redefining the organization’s strategy to be better suited to digital technologies and business models, and changing management structures to ensure it can be effectively implemented?
I have found that working through these questions offers a framework for building a deeper understanding of digital transformation. Unlike other such frameworks which emphasize maturity and stage-based improvements, these 5 questions present a straightforward way to open discussions and build engagement around the key themes of digital transformation. They guide the conversation toward what matters in your organization to set the right course for success.
Armed with these questions, the next time you’re asked to participate in discussions about digital transformation in your organization, avoid that “Monty Python” moment by adopting a constructive framework for enhancing the conversation and making sure you’re asking better questions.