The four pillars of digital transformation

Transforming an organisation is both daunting and exciting. Here we'll explore what digital transformation is - and isn't - and how it can help an organisation grow.

You'd be hard pressed to find a modern company that isn't already using digital technology to deliver products and services, to engage with customers, or improve operational efficiency. And most business leaders are looking for ways to improve the ways they're using technology. But that's not necessarily transformative.

Digital optimisation and transformation have similar goals, but are significantly different in terms of scope, approach, and risk. For that reason optimisation is a very comfortable place. The thought being that if I improve operational efficiency, I will be more competitive and more successful.

Seismic shifts require organisations to significantly broaden their thinking.

However, in today's fast changing world, that approach could be disastrous. Many large and successful companies were caught off guard by the rise of Amazon, and failed to answer an existential challenge effectively. They kept working hard at making improvements, and didn't stop to consider the fundamental shift in customer behaviour that was occurring around them.

So what are the four pillars?

Process transformation

Perhaps the most straightforward of the bunch, process transformation is about changing the way you work. It’s re-thinking the way you do things, interact with your customers and suppliers, and how you interact with your own employees.

In many cases this will require new technologies to support all new processes e.g. self-service kiosks, however it also includes new ways of managing work in an organisation e.g. Agile.

Business model transformation

Business model transformation is about making your company more agile, flexible and responsive to changing market conditions. For many organisations this is perhaps the most frightening place to be. It requires leaders to re-think and re-imagine what their business is actually all about.

One of the more well known examples of this is how Netflix transformed from a mailbox DVD business to the streaming behemoth it has become.

Domain transformation

Domain transformations occur when a business is able to leverage its success in one domain, to launch into another. Amazon's leap from online bookstore, to cloud computing powerhouse, to streaming content provider is one of the most obvious examples.

Both of these domains already had significant major players, however Amazon's resources allowed it to not only enter but to quickly become a serious competitor.

Cultural transformation

Culture is an unspoken set of shared values, beliefs, and accepted behaviours that an organisation adheres to. When a business has to adapt to meet new external challenges then an internal shift in culture may need to occur.

The shift to work-from-home as a result of the pandemic, and the subsequent attempts to re-align as things return to a new normal is a recent example. Technology played a major part in facilitating these cultural changes and as a result has reset the way many of us view work and our use of time.

Digital transformation is not just about technology.

It’s about understanding how to make your business more agile, innovative and customer-centric, and then converting that insight into an actionable plan.

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