Beyond Paperless: How Digital Transformation Can Revolutionize Your Organization
Reed Deshler | March 6, 2019
Digital transformation is happening across all industries and sectors – in business, government, education and nearly every type of organization around the world. It is a way to rethink how value is delivered and how technical systems and capabilities are blended with human and organization systems and capabilities. Digital solutions have, at this point, become so widely used and adopted that virtually every business has already transformed digitally to a certain extent.
The implications of digital transformation extend much farther than simply switching from paper to a computerized billing system, for example. Digitization, when undertaken strategically, has the potential to transform an organization (and even an industry)—and its potential for growth—in previously undreamed of ways.
However, as with any major change endeavor, digital transformation must be orchestrated wisely. A great place to start is to consider what it could look like for your organization to achieve optimal results.
Recognizing Digital Transformation’s Vast Potential
There are many dimensions and moving parts to take into account when initiating a digital transformation. Here are a few of the foundational characteristics of revolutionary digital transformation efforts to consider for your business:
1. It’s all about experience.
Digital transformation entails changing the experience a customer, a user, or an employee has when they interact with, conduct business with, and/or do work with your organization. Ideally, digital transformation will improve these experiences, making them more intuitive, more efficient, more scalable, and/or easier than they are today. Successful digital transformation is about more than automating tasks. It is about transforming the experience of how value is delivered or how work is performed.
2. Its potential is exponential.
We are currently experiencing an explosion in technological capability that is opening up new opportunities. Until recently, improvements in performance were usually marked in modest increments (e.g., a 10% improvement or a 3% market share increase). Indeed, these are incredible results using traditional improvement approaches and thinking. But we are now at a point where the question we should be asking when it comes to digital transformation is “Why not 10x improvement?” Digital transformations should be about exponential improvements, not incremental step changes.
3. It’s scalable.
In the past, most businesses and industries gained value through vertical integration, by controlling assets and the means of production, by becoming bigger, and so on. Many large scale mergers and acquisitions are really an attempt to consolidate assets or means of production, or to gain dominant access to markets and customers.
In contrast, value in the digital world is all about information, access to information, transactions, and interactions that can be facilitated digitally or virtually. Influence and scale in the digital world is not necessarily achieved by controlling assets or becoming bigger. It is done by leveraging data, attracting more users, bringing disparate parties together to exchange value or by rethinking the customer experience.
In other words, digital transformation is best leveraged by building scalable platforms.
One of the hallmarks of the digital arena is that influence, power, and control do come in ways that often can be infinitely scalable–virtually. Take Uber as an example. It may have taken them a few years to figure out their platform and the right formula, but once they did, it almost instantaneously spread globally. Now, in nearly every city in the world you have the ability to hail an Uber car.
To compare it to a traditional model, McDonalds’ decision to enter China was exciting, but it takes years to acquire land, build the restaurants, establish distribution networks, and establish a local market. When Uber enters a new market, their ultra-scalable platform makes it virtually instantaneous. There’s nothing to build, no assets to own, and limited infrastructure to run. They just sign people up and they’re ready to go.
Uber’s scalable, flexible model also allows them to pivot into other market opportunities. For example, most people look at Uber and see a ride sharing app. However, one of the most exciting aspects of Uber is their burgeoning freight business. They are simply taking their existing platform and tweaking it to allow independent truckers to have access to work just by utilizing an app. It has the potential to change the trucking and logistics industry just as profoundly as it has the taxi industry—and Uber could just as easily pivot again and apply their same basic model to trains, planes, or transoceanic shipping. Digitalization has afforded them a nearly infinite ability to scale and grow.
4. It expedites progress.
Digital transformation allows industries and markets to move and evolve quickly, because industries that implement digital approaches become more agile. With digital transformation, the potential for being able to correct problems and address issues—even proactively or remotely in many cases—becomes almost instantaneous.
For instance, someone reported about a friend they knew who had bought a new Tesla S. Within a few hours of driving it home, the car came down with a whole litany of issues: the locks wouldn’t lock, the car wouldn’t start, and the person was complaining. The next day, when asked, “Did you have to take your car in?” the Tesla owner replied, “No, I just called the dealer. They reset the software and everything’s fine.”
Creating Revolutionary Change—the Digital Way
The opportunity for growth through digital transformation is huge, even in older industries. (For example, Amazon is now piloting retail stores that have no workers.) And increasingly, people are starting to expect the convenience of digital solutions.
For this reason, it’s a safe bet that even if you aren’t transforming digitally, your competitors are. But going digital as a knee-jerk, keep-up-with-the-Joneses reaction will not result in optimal growth for your organization. Instead, it pays to take a strategic approach. Leveraging digital transformation in ways that transform experiences, create exponential improvements, are highly scalable, and expedite progress could result in revolutionary changes for your organization.