Tech Terms: Digital Transformation

This week our tech term is not really a technical term, it is more of a marketing concept used to sell products and services. The term is Digital Transformation.

Digital Transformation

Digital Transformation is like “The Cloud” was ten years ago: a straightforward and simple concept that has been around for some time, hyped up in an effort to sell more products and services. That being said, as with “The Cloud,” there is legitimate business value in the reality that is Digital Transformation.

While the definition of Digital Transformation varies considerably depending on who you ask, at its core Digital Transformation refers to using technology to create new (new to the organization undergoing Digital Transformation) products, services, revenue, and businesses. While this may seem appealing to most of us, especially those of us in commoditized or highly competitive industries, it is unrealistic and often detrimental to try to create true Digital Transformation. Wholesale ripping out established processes and businesses models can be disastrous for an organization, especially when the product or service is not technology-centric to begin with. We prefer the approach of Digital Optimization.

Digital Optimization

Digital Optimization is the replacement of physical tools and processes with digital (software and hardware) tools and processes. Doctors who switch from using paper charting and record patient data in an Electronic Health Records (EHR) system have undergone Digital Optimization. Highway toll collections that implement an electronic license plate reader to bill drivers instead of collecting cash at a roadside kiosk have undergone Digital Transformation. Over time, a consistent program of Digital Optimization can result in sustainable Digital Transformation. Digital Optimization allows an organization to identify high value/low impact processes to be optimized and allow employees to adapt to changes in tools and processes at a pace that does not disrupt the delivery of products and services to customers.

While Digital Transformation sounds like a great thing when a marketer is spinning it, the reality is a strategic and measured approach to implementing digital is more likely to yield long-term gains with minimal pain.

If you are not sure what processes in your organization could benefit from Digital Optimization, give us a call. We’ll help you identify the best roadmap for optimizing and automating your business with technology.