Digital Transformation is often used as a buzzword in C-Suites to describe the transition of media investment from traditional to digital. Companies that have a strong social media presence boast of having completed the digital transformation. This is folly at best and dangerous at worst because digital transformation encompasses much more than blue and orange icons on an iPhone screen – and digital transformation, like any sort of change, can never be “completed.”
Digital Transformation can accurately be divided into three different categories of how digital solutions are implemented to transform how a company conducts its business: internal digital transformation, external digital transformation, and data-driven transformation.
Oftentimes businesses think that they are “behind” in digital, but digital transformation should not mean digital disruption. A business has to transform itself according to the flexibility of the business – its readiness to use new solutions and the teams it can put in place to manage it. A solution put in place to transform a business process that doesn’t have organizational support is doomed to fail.
Internal Digital Transformation
The first type of digital transformation is what goes on inside of a business. This has been happening for decades already, long before the term digital transformation came into existence.
Internal digital transformation is any sort of technology that employees use to work with each other and business partners.
It might sound like a given but fax machines and the early Internet is where it began. Then email came along, as did Microsoft Office, and ERPs like SAP for billing and accounting. Palm Pilots and BlackBerries freed people from the desktop format and now Viseo and Skype are enabling face to face collaboration without having to get on an airplane. Internal digital transformation continues today with the likes of Slack for collaboration, Trello for task management, and Box for storing files in the cloud.
When choosing between services, companies have the option to go with third part software like Slack or Office, or to create a custom solution based on their needs. Shiseido just introduced MIRAI, an all encompassing HR software that groups together employee information, reviews, team structures, and things like time off and training plans.
The question of whether to create your own internal software versus use third party services takes on a new dimension now that software is easier than ever to build.
It might seem best to make your own solution, something that is perfectly customized to your needs, but that actually might not be advisable, for a number or reasons.
First, the solution you build will have to be adaptable to your future needs as well as your needs right now. This means either being beholden to your technical agency that is building the solution or internalizing a group of developers to keep the program growing.
Second, any new software has a learning curve. In today’s job world where turnover continues to increase, that means each employee will have to familiarize themselves with your platform instead of being able to transfer their skills from other companies that use the same third party system.
Finally, the costs of building something yourself are usually higher than licensing existing software. Not only does it take longer to implement, the return on investment can take much longer – and if a business change comes along that renders your solution less effective, that could mean you lose the ROI all together.
If there is no solution that fits your need completely, by all means build your own. Just be aware that going it alone doesn’t always make the most business sense.
External Digital Transformation
External digital transformation refers to technology that you use to interact and conduct business with your customers. This can be internal/external tools like SalesForce Marketing Cloud, social networks for communicating and advertising, customer service portals like chatbots, or direct sales channels like an e-commerce website. Since it is the most visible – it is in front of the public after all – it is often deemed the highest priority for a business.
Technology can provide great solutions for your customers, and in 2019 customers expect to be able to interface with you wherever they are. But since technology is also consolidating, that means that you don’t necessarily have to be present on all of the social platforms, for example. Take the biggest company in the world, Apple, who has no Facebook or Instagram accounts.
In fact a lot of the time people want to be able to call and talk to someone. Chatting by text with customer service representatives can be frustrating, especially when you are already frustrated. Even though customer support chat platforms are much more efficient for businesses (the usual argument for adopting them) they might not be the best choice for your customers.
So the level of your external digital transformation should be a balance between time and cost efficiencies and your overall customer experience.
And a quick note about social platforms: if a social platform is not relevant to your business, do not open accounts on those platforms just to try to build an audience there. You can have an account to direct people to your website, but Tweeting just to tweet is a waste of time. Same thing about building an app, if your customer doesn’t have a reason to check your app everyday, you don’t have a solid reason to build an app.
Digital strategy is as much about what you choose not to do as it is about what you choose to do. Make your decisions wisely.
The last few years have been focused more and more on data-driven transformation. This is the study of the information your business generates in order to make decisions to better conduct your business.
Gone are the days of going by your gut or following a leader who has had a few successes in the past. Businesses today have collective intelligence in the analytics and data they create during the process of doing business. Tapping in to that means collecting, organizing, and analyzing data.
Technology is here to help with all of those three steps. Storage space in the cloud lets businesses gather all potentially relevant information and keep it for as long as necessary. Hadoop services and distributed databases allow data to come together, often if the data architecture is different (this is called a Data Lake, in case you were wondering).
Then when it comes to analyzing, data scientists are starting to pop up across all major organizations. In fact Data Scientist was the highest paid role across all industries (relative to years of experience) in 2016.
Software exists to help the analysis of data, and when your data is coupled with third party data, the real magic starts to happen. External services are then increasingly valuable to your business as they become repositories of more and more information. But with a veritable deluge of information comes the difficult task of sifting through all of that noise to find your signal. If you business doesn’t have the capacity to properly analyze large quantities of data, keep it simple. In a lot of cases, a simple dataset can go a long way towards aiding decision-making, and you don’t need a John’s Hopkins data scientist to do it.
How are you using technology to transform how your business works?