I had an interesting conversation with a senior non-IT manager regarding the “Digital Transformation”. I have summarised my explanation below for everyone’s benefit. Happy to learn your thoughts too.
During the conversation, the individual thought that the digital transformation refers to modernization of the systems (i.e. replacing 15-year-old desktop-based systems with the web-based and mobile-based apps).
Also, he challenged me about how digital transformation initiatives are different from other IT initiatives. Ultimately you have to modernise systems from time to time and embrace new technology too!
Here is a simple explanation -
Imagine...
Imagine you are a car manufacturing company. You have Car as a product and you have an assembly line responsible for delivering the product.
(A) Car development goes through the stages such as design, prototyping, parts manufacturing, assembly, quality control and then delivery.
Continuous innovation is required in new car development to remain competitive in the marketplace (to survive in the marketplace)
(B) Whereas assembly line goes through its own lifecycle of modernization, implementing latest hardware, software, robotics and process improvement.
Continuous innovation & transformation is required to the assembly line & corresponding processes to deliver the best quality product, reduce defects, reduce running cost, reduce wastage, improve the speed of delivery, improve output and handle complex new tasks.
Traditionally IT initiatives were focused on delivering products & solutions (A above). But not much on the assembly line (B above). There was a good reason for this. Most traditional organisations implemented and integrated off-the-shelf products which needed minimal software development.
It does not make sense to invest in an assembly line if you are only repairing cars in a garage right?
On the other hand - most technology organisations (likes of Microsoft, IBM, Oracle, Google etc) delivering technology products invested effort in improving the assembly line because they were developing these products from scratch. They were literally running a car manufacturing company.
Over the last decade, the landscape has changed. All non-technology organisations see IT as important for their survival in the marketplace. The investment in IT within every department increased substantially. This brought a need to customise and integrate off the shelf products as well as do new development inhouse.
Most organisations demand their IT to deliver frequent changes within the shortest time possible (to mitigate market risk) at the same time demand defect-free product with minimum downtime.
In a nutshell, IT products are becoming critical for organisations, so do the assembly line producing these products. The transformation of this assembly line has an umbrella term called “Digital Transformation”.
- It is driving cultural change - in the form of Agile
- Improving development and operational practices - DevOps
- Collaboration practices (throughout the product lifecycle)
- Scalable and flexible solutions (SaaS & Cloud migration)
- Tools required for all of the above
Going beyond the basics, many organisations are capitalising on this wave and embracing modern technologies which capitalise on the digital assets (i.e. data analytics), provide a competitive edge in the marketplace such as Artificial Intelligence (AI), Machine Learning (ML) and deliver cool features which were not previously available to the end-users using Internet Of Things (IoT).
Almost every organisation is going through transformation programmes or thinking about it. However, there are several challenges in this process which I will explore in the next article on this subject.
One quick note - ‘digital transformation’ is not equal to ‘Digitization’. Digitization refers to converting manual processes and paper-based systems into digital (software-based) systems. Most organisations been on a digitization journey for the last 30 years and will continue.
What do you think about this article? Do you agree? Disagree? Any comments welcome.
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