The Digital Transformation Series – Part 1 – What is Digital Transformation?

A transcript of part 1 of 6, from the Digital Transformation series, produced in partnership with the Business Transformation Network. Video: https://www.thebtn.tv/exclusive-content/video/what-digital-transformation-chris-micklethwaite

[TRANSCRIPT]

Introduction

Hello I’m Chris Micklethwaite, I’m founder and principal consultant at 3pointsDIGITAL. I’ve spent my career in technology, working with web and customer-facing technologies, and using technology to help find efficiencies in business, and that help people collaborate and work better together.

What I’ve learnt from the businesses I’ve worked with is that technology alone can’t make a change in an organisation; to use technology effectively to help people to become more productive, and for an organisation to better connect with the customer requires fundamental changes in people, skills, structure, approach and culture. I founded 3pointsDIGITAL to help businesses of all types tackle these challenges, and the challenges and opportunities from balancing three points of a triangle: Customer, Business and Technology.

In this series of videos we will to explore this type of technology and the permanent changes required in an organisation to adopt, use and generate benefit from it, which in short is called digital transformation.

We’re going to talk about digital disruption, what characterises digital native businesses and what we can learn from them, and how to create a digital strategy and embed change in your business.

What is Digital?

So let’s start with the basics. The origin of the word digital is from the Latin ‘digitalis’ which means ‘fingers’, which has been adopted and used as as term for counting and numbers. In the 19th century that was further adopted in computing through binary digits which are the foundation for basic logic in computer science. Then the consumerisation of technology has driven the development of digital counterparts of physical things such as music, currency, books, news and film. So we started to see this convergence of technology and people, partly by the consumerisation of technology and partly by the exponential increase in power for the same relative cost (in computing power)… and how we integrate tech into our daily lives is now increasingly the driver for what we now call digital.

Digital technology has enabled us to become more connected, more collaborative, more informed, it supports better decision-making and it can also free us from mundane and repetitive tasks. So we are seeing a convergence of technology and people, and I think that sums up digital in its broadest terms. In a business sense I define digital as ‘technology that helps you get closer to your customers’, whether that’s to interact or trade, do business with, for them to receive service from you.

Ultimately technology still just a tool, it needs to be accessible, usable and intuitive for humans to use, and in the context of digital which is a convergence of technology and people, that’s incredibly important. It applies to technology within a business as well as technology that you use to connect, trade and exchange value with your customers and organisations outside of your business. If your product and service is completely digital, as it is for digital native businesses (airBnB and Spotify being some obvious examples), or if you have opportunities to improve customer satisfaction and loyalty, or find efficiency in operations through technology, then usability and adoption become the key measures of success.

So in the digital world, customers and users are effectively the same, and this means developing your technology to meet their needs, solve their problems, and make it easier for them to do business with you.

So ‘digital’ in a business sense is “Technology that helps you connect with customers“.

What is transformation?

Many people talk about digital in different terms. Some talk about technology, whether it’s moving to the cloud, infrastructure as a service, big data, AI, machine learning…. some talk about digitisation of the workforce and collaboration, or some talk about optimising e-commerce and marketing activities or using social channels and platforms. My view is, it’s about all of those things, but none of in isolation; it’s about using and adopting those things to better connect with and service the customer and the organisations that you interact with.

So to be able to do that, you need to change how you operate; to become customer led, to become data driven, to be able to experiment and learn and adapt, and to wrapper your physical products and services with digital experiences. It’s also about having the skills and the approach to be able to do that over and over again. So transformation is a permanent change in an organisation to achieve that state of ongoing development and delivery which is iterative and experimental, and where you are able to adopt and continually change your business and how it operates.

Why is digital transformation important?

If you look at digital native businesses like Amazon and airBnB, they don’t talk about transformation because they were born digital. They approach things in a certain way and that way of experimenting, taking technology, experimenting with customers and learning what customers value… and then building a business off the back of that… that is what is leading to sweeping change and competitive pressure across industries. So it’s important for traditional/incumbent businesses to look at that seriously, to look at the disruption and the competitive threat, and at the opportunity that new technology can bring.

It is simply something that cannot not be ignored when you’re operating in a disrupted industry… and I don’t see very many industries in today’s world that aren’t being disrupted.