Digital Transformation: What’s in a Word?

A picture paints a thousand words — a saying equally apropos for words themselves.  Based on experience or context, a single word can have a wide range of connotations. For example, take  ‘transformation.’ Its dictionary definition is, “to change in form, appearance, or structure; metamorphose.” Caterpillars to butterflies. The horse and cart to cars. From nature to technology images all evoked from the same phrase.

Now consider it from the perspective of your business. Transformation elicits an entirely different interpretation, maybe envisioned as innovating legacy systems or a company reorganization. Different concepts become further convoluted when the word ‘digital’ is added. Randomly poll a thousand different people across multiple organizations and industries and you’ll receive just as many definitions. In fact, discerning the meaning of digital transformation itself is often the first hurdle companies encounter when embarking on the journey.

Digital transformation is frequently thought of as synonymous with ‘digitization’ and ‘digitalization’. So what? Why does that matter? It’s important because in truth, these terms don’t hold the same meaning. This often leads to a scenario in which leaders mapping out digital transformation strategies aren’t speaking the same language. According to Forbes, “…people are confusing them in ways that shortchange the power and importance of digital transformation.” It’s easy to see why this happens when looking into the descriptions, or lack thereof.

Digitization is the process of changing from analog to digital form. In other words, taking analog information, encoding it into zeroes and ones so computers can store, process and transmit information. Pretty clear, right? Digitalization, however, isn’t so divisive. Even Gartner differs in its definition of digitalization. According to Gartner, Inc., digitalization is, “…the process of employing digital technologies and information to transform business operations.” But if you consult Gartner’s glossary it states, “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities. It is the process of moving to a digital business.” One operationally oriented, the other focused on the business model itself. Other non-Gartner references vary associating everything from process efficiency, data transparency, and technology alone to digitalization.

Then there’s digital transformation. Google states it well, “Digital transformation is the profound and accelerating transformation of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way.”  In other words, not simply a project or implementation of a new technology, but strategies that drive cross-functional and bi-directional organizational change that include the implementation of digital technologies.

It’s no wonder then, ninety-five percent of IT leaders or CIOs said in a recent survey by Couchbase that they view digital transformation as “an insurmountable task.”  Especially if IT, Digital, Operations, Procurement, Product, Marketing, HR, Finance, and other divisions have vastly different ideas, expectations and verbiage as to what digital transformation entails. That’s a lot of different outlooks that can affect the company at every level.

So, what’s in a word?  A dictionary definition jam-packed with associations, visualizations, concepts and emotions each unique to its beholder.  Leadership needs to take the time to wrestle, define and agree upon what digital transformation means to the organization from a business, technology, partner, CX, and cultural standpoint.

As time-intensive as it may be, it’s only the first step within the digital transformation journey. It effectively demonstrates the scale of effort required to get digital transformation right. The good news is, this isn’t a process that businesses need to tackle alone. In fact, the right partner network is one of my Four Pillars of Digital Excellence, a guide designed to outline what it takes to implement a successful digital transformation program. Rather than boiling the ocean, businesses need to look to a comprehensive partner ecosystem to ensure priorities can revolve around customer need.

Interested in launching the next phase of your digital transformation journey? Find the full Pillars of Digital Excellence series on our CSG Blog.

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