Why digitally transform in the first place?
Survival of the Fittest
To close off release week I wanted to give you some of thoughts on the big question Why? Again, as I entered the industry yearning to learn, this was another question to which I never found a clear-cut answer.
As I established in earlier articles, “Digital Transformation” has become the next big buzz word but it has also become the next big justification. Despite its murky and rather subjective definition, it sounds grand and well thought out. In many cases well thought out enough to get senior management to loosen the purse strings. One of those situations where we don’t really know what it means but we know it sounds good. So, rather than pretend, let’s try and justify it.
In my opinion, the answer to why we need to digitally transform has its roots in digitisation. In a very short space of time we have seen the mass conversion of society from on-page (analogue) to on-screen (digital). Our entire lives have been transferred from words on a page to 0 and 1’s on a drive. So, to keep up, companies and entrepreneurs have had to change the way they do business to keep up with evolving demands and expectations. In the words of Einstein:
In the digital age, larger businesses need to start thinking like disruptive start-ups, matching their agility, their propensity to change. At modern digital speeds, if they don’t, it won’t take long before they’re obsolete. Given established businesses don’t have the luxury of starting over, they must transform. To simplify, why digitally transform? – to survive.
The Customer Experience
Technology has made the world obsessed. I think this is true in general, everyone has to have the latest phone, the latest smart watch, but if I had to pick the one obsession that stands above the rest, it’s speed. I’m convinced that more often than not, people would choose the 2nd best over the best simply if the 2nd best came twice as quickly. At the heart of this obsession is digitally motivated transformation. What would happen to the world if Apple came out this year and just said: “Sorry, we’ve run out of ideas, you’ll have to wait until next year. We need more time.”
So, again, I simplify: Why digitally transform? – because that’s what the customer expects.
The Digital Puzzle
To deliver on bigger and bolder ideas faster than before, you need to work more efficiently and productively than before. This is true from the top all the way down to the bottom. To get quicker from quick, every single process involved from input through to output needs to be reviewed and optimised. Digitisation gives you the opportunity to log each of these processes down to the individual workflows that govern them.
What do I mean by this? – let’s take it back to the example I gave in my previous article “What actually is a digital transformation?”
To get IT’s software request approved Brian had to run the licence contract over to Legal – our workflow. What if we could build a digital record of that licence that triggered a notification on Jane’s computer to tell her it needs approval? We save Brian a lot of time and we gain approval quicker. We have optimised the approval process by digitally transforming it.
Result? - That software gets implemented into the business quicker, which makes the rest of the company more productive sooner, which allows them to get the companies next big project to market quicker = lots of satisfied customers.
Game Theory - Backwards Induction
For any for-profit organisation, any and every investment, innovation or even minor change has to answer the question how can we improve profitability?
Any company, even the small ones, is built on such a complex array of processes that lead to this one outcome. The only way you can even begin to answer that question is by simplifying.
In Game Theory, the process used to understand how to optimise the sequence of actions that lead to a given situation or problem is called Backwards Induction. Understanding how a company reaches profitability, is the mother of all problems. To even begin to understand, you need to start from the end and take it apart piece by piece moving backwards.
This is where the true power of digitisation is revealed. Digitisation gives you the tools to understand like you’ve never understood before. And what it offers you is actually shockingly simple – it’s a glorified note taker. When you digitalise, every process and every workflow behind that process is logged. In an analogue world, there’s no way you’re going to chase a piece of paper around the organisation to understand where it’s been, how it got there or how long it took to get there. And if you don’t know these key details, how are you supposed to optimise?
If you understand what you are dealing with, you can remove the inefficiencies that are holding back your employee’s ability to serve your customers. If you do that, profitability is just a given. Once you digitalise your organisation, only then can you truly transform how you operate. Manual processes that were sapping your time and productivity can be fully automated and end-of-life processes that were cluttering your systems can be removed. This understanding gives you the power to optimise through and through. Every minute your employees spend at work is used to take you a step closer to your goal.
When I peel back the layers, the answer is quite simple. Digitisation gives you a much-underrated power – understanding. Transformation is based on change and the only way you can make effective change is if you understand exactly what you’re doing and why. This is no longer the future but the present. If you’re still pushing paper around while your competitor is automating parts of their business from top to bottom, you’re not going to survive. Simply because it is so fundamental answering the question every business is based on – how can we increase profitability?