Digital transformation is the change associated with the
application of digital technology in all aspects of human society.-Wikipedia
Digital Transformation is a buzz-word which has been
cropping up in a big way over the last few years. Everyone talks of the need to
have a Digital Transformation. But what exactly is it?
As defined in Wikipedia above we see a slightly limited
definition, as it covers only half of the term “Digital Transformation”. The
other half is the word “transformation”. When we talk of transformation, we
associate it with a “Paradigm Shift” or Foundational change. This essentially
means in the context of a business; that every aspect of the business from the
operating model to the consumer needs changes. This is necessitated by change
in consumer demand, competition and technology impact.
Technology has been affecting us for decades. Are you aware
that it was an employee of Kodak, who demonstrated the first proof of concept
of a working “Digital Camera” and by around 1989 and a working model like the
ones available today was showcased? There was stiff resistance to this product
internally at Kodak as it was felt that it would negatively impact their camera and
camera films business. The quick shift to Digital Photography and the demise of
Kodak is history.
Going further back by a hundred years, Western Union, the
first true Communications company in the world failed to get on the bandwagon
of a new product developed by Alexender Graham Bell, “The Telephone”. The rest
is history
In the words of the Oxford dictionary, transformation is “a
marked change in form, nature, or appearance”. Transformation of businesses has
been happening for a very long time, the only change is that the latest change
is impacted by technology.
Digital Transformation is now looked at as Transformation of
business by the impact of Digital Technology, or being more specific
Information Technology. Information technology has begun influencing business
to such a large extent that business dynamics have been transformed. Logistics
companies run on IT; e-commerce has changed retail; a downing of IT can stop
all travel. Witness the outage in August 2016 wheren an outage at Delta
airlines caused 2300 flights to be cancelled. HSBC, RBS and so many other banks
have been greatly affected by well reported IT failures.
So we come to the moot point, all business, no matter which
industry they operate in, are heavily reliant on IT. It is not enough for one
or two functions like Marketing, Sales, Production to be digitally or IT aware
and comfortable. All support departments HR, Finance, Purchase and others have to be equally aboard on “Digital
Transformation”. To achieve Digital Transformation you need to bring about a
change in Mind-set, Processes, delivery capability and communication with all
stake holders.