If you’re interested in business and technology, I’m sure you’ve come across the term “digital transformation” quite a lot in recent years. The basic take is that it’s about leveraging the latest emerging technology trends – perhaps artificial intelligence (AI) or the Internet of Things (IoT) in order to do business more effectively.
That isn't entirely wrong, but it certainly isn't the whole picture. When we start to look into it in a little more depth, it becomes a bit more complicated. Businesses that manage to drive successful digital transformation understand that it requires architecting holistic changes, encompassing culture, leadership strategies, and customer experience. It also involves running a gauntlet of hype, misconceptions, and misinformation.
To help chart a steady path through these turbulent and stormy waters, here’s my overview of some of the biggest misconceptions when it comes to digital transformation. Understanding these points is key to starting to think about how digital transformation can be initiated in any organization.
You Do It, And Then It’s Done
Karl Marx saw the concept of socialist revolution as a process that is ongoing rather than something a society goes through and emerges in a "revolutionized” state. Likewise, Socrates cautioned against listening to those who considered themselves "educated" because he saw education as a lifelong process. Digital transformation should be thought of in the same way – it isn’t a journey that an organization embarks on in the belief that when it is complete, it will be “transformed” and ready to reap the rewards. Instead, it’s an ongoing strategic system of behavior that involves constantly examining opportunities and adapting to them as they occur. Driving successful digital transformation requires adopting an agile mindset and a continuing willingness to embrace change. It's a long-term investment and business model, not a one-time project.
It’s All About Technology
In some ways, technology is the easy part of digital transformation. Far trickier is understanding and adapting to the human challenges involved. These involve everything from managing leadership expectations and driving behavioral changes among decision-makers to achieving buy-in among the "shop floor" staff whose jobs will be affected, to promoting a culture of digital awareness and literacy, to developing the requisite skillsets through investment in training and upskilling. If there's one takeaway you need to keep in mind, it’s that digital transformation is about driving human change as much as, if not more so, than it is about technological change.
It’s Only For Big Business
Many people hear about the technologies that are driving digital transformation across industries today – whether that’s AI, Big Data, IoT, virtual and augmented reality, blockchain, the metaverse – whatever – and assume it’s expensive and requires a large, highly trained and technologically-competent workforce to implement. This leads them to believe it’s something that only affects international enterprises and big businesses.
This simply isn't true – and many small and medium-sized businesses are, at best missing opportunities and, at worse, losing out to the competition by believing that technology and digital transformation aren’t for them. The availability of cloud-based as-a-service delivery means that powerfully transformative technologies, including AI, have effectively been "democratized" – made available to all – via an affordable, pay-as-you-go model. You only have to look at today’s business landscape to see that there are many fields where tiny startups have proven that their size and agility can be used to their advantage when it comes to leveraging new technology, and there are many examples (Amazon and Netflix being two of the most obvious) of companies using technology to grow from tiny acorns to mighty oaks, hugely disrupting traditional markets as they do so.
You Have To Follow The Latest Trends
A couple of years back, everyone was talking about blockchain. Last year, the hottest buzzword was "metaverse." And so far, 2023 has undoubtedly been the year of AI, thanks to the impressive debut of new generative AI tools, most prominently ChatGPT. Absolutely the worst way to go about achieving digital transformation is to think that you have to jump on every emerging trend simply because it’s the latest hot thing.
When deciding what technology to implement, it’s important to never lose sight of your business strategy and core business aims. Evaluate new technologies and trends on the basis of how they help you achieve your objectives rather than looking for ways to make them work for you just because they are the subjects that are being hyped right now. By carefully selecting the technologies that are most relevant to your business priorities, you make it more likely that you will hit a whole bunch of targets that are critical for success – from achieving organization-wide buy-in to avoiding unnecessary risks.
It’s About Replacing Humans With Technology
It’s probably inevitable that some job roles will become obsolete, particularly within larger organizations, due to AI and automation. However, in my opinion, it’s just as inevitable that a lot of businesses will damage their customer experience and become less trusted by being too eager to replace humans with machines. What is certain is that the transition towards more tech-driven, automated models of business has to be managed very carefully. In particular, businesses need to think about where the time and skills of staff who are displaced due to their repetitive, manual tasks being given to machines can best be redeployed.
Businesses of all shapes and sizes still face a multitude of very human problems and challenges – from complex customer service issues to the need to creatively align new products and services to customer needs. These complex issues won’t be automated or handled by machines any time soon. It’s my belief that the increased availability of human “soft skills” like communication, creativity, and problem-solving will easily be as valuable a resource to most businesses as AI in coming years, and developing an understanding of how they can be used will be as critical as any technology.