It may be that the key to digital transformation for your company or organization is simply to ensure that everyone has the same equipment, such as new laptops and subscriptions to Microsoft Teams or Office365. However, it is important to remember that digital transformation is not just about the technology itself, but the whole process and how the different components come together to achieve an overall result.
Today’s definitions of digital transformation
Digital transformation has been a prominent theme of the 1980s and 1990s, with enterprises digitizing business processes and workflows, adopting client/server systems, linking facilities and branch offices with high-speed wide area and campus networks, and building out data centers to store an increasing amount of digital data. ERP, CRM, BPO, SCM, and other large-scale software projects were essential components of this transformation.
Whilst many of these initiatives are still in place today, and are of paramount importance, they were relatively conservative compared to today’s standards. The focus was on internal processes, with the aim of increasing productivity and efficiency through the reduction of manual labour.
Today, the foundations have been laid for genuine digital transformation, where technology is used to drastically change an organization’s daily operations, interactions with employees, customers, partners, and suppliers, product and service development, and, in many cases, the business model upon which the organization was established. As an example, take the transformation of product-based corporations into service-based ones, and vice versa. Companies such as Apple, Microsoft, and Amazon readily come to mind.
Today’s primary objective is to drive growth in our organization by providing an exceptional customer experience. Streamlining processes, cost savings and improving efficiencies are all still important, but they take second place to growing our top line. In today’s competitive, digital marketplaces, capturing and maintaining customer loyalty is a challenge as customers can easily move to the next best option.
Then a global epidemic occurred.
It is widely accepted that the COVID-19 pandemic caused a dramatic acceleration of digital transformation. As a result, businesses were able to achieve in a matter of days what would have typically taken months or even years to accomplish. For example, supermarkets such as Kroger have revolutionized the grocery shopping experience through the introduction of curbside pickup and delivery options. In response to the severe economic implications of the government shutdowns, the restaurant industry has also responded quickly and relied heavily on online ordering, curbside pick up and delivery services.
Companies that formerly employed hundreds of thousands of people may now send most of them home and still run smoothly thanks to the cloud.
Business executives recognized that the digital transformation initiatives they had implemented prior to the onset of COVID-19 were key in preserving their companies, as IT teams worked to procure additional computers, headsets and VPN licenses. This was a surprise to many. It became apparent that technology and IT were of greater value than initially projected in terms of cost.
I had a discussion with the Chief Information Officer of a major telecommunications company last year, who shared that the implementation of cloud-based telephony enabled the business to accommodate thousands of customer service personnel to work remotely. As a result, their Net Promoter Score (NPS) rose significantly during the pandemic.
The Chief Information Officer I am aware of expedited the process of computerizing paper invoices from the organization’s network of external suppliers. As the invoices continued to accumulate, there was nobody available to process them due to the office being empty. This was not a priority before the emergence of the COVID pandemic.
It’s hard to tell what’s internal and what’s exterior.
It is evident that modern interpretations of digital transformation differ from those of the past, in that the need to focus on both inward and outward strategies is paramount. In order to be successful, businesses must be able to successfully manage both of these tasks concurrently.
If a company fails to modernize its data storage network while developing a customer-facing application, resulting in substantial delays, it could lead to customers turning to rival businesses. In the current climate, this applies to both the business-to-business (B2B) and business-to-consumer (B2C) markets, as there is a lack of distinction between them in terms of technology.
Redefining the CIO’s function in an era of digital disruption
The Chief Information Officer of one of the leading and most prestigious technology companies globally has recently emphasized that delivering an exceptional digital experience to customers is currently a key element of digital transformation. Customers now have the same expectations of speed and simplicity which they have of popular digital services such as Netflix and Amazon.
When BestBuy experienced a decrease in sales due to competition from online retailers in the early 2010s, they responded by closing underperforming stores and, more importantly, by connecting the online and in-store shopping experiences for their customers. This strategy was successful, as can be seen by their share price which has risen 728 percent since its lowest point in 2023, and the business has seen great success as a result.
CIOs must focus on creating shared platforms, services and capabilities for the entire enterprise in order to enable digital transformation in the present tense. This will enable all departments to benefit from the same resources, which will facilitate the company’s digital transition, as well as creating a consistent customer experience.
The speaker emphasized the necessity of adaptation for CIOs, who should not act as traditional technologists or meekly comply with orders, but rather like a CEO or COO, possessing a broad understanding of the business. It is the CIO’s responsibility to ensure that technology is employed to drive the company’s success, not to impede it.
