Digitize to Survive - Just What is Digital Transformation? Featured

By Burns Phillips January 29, 2019 410 0

Does Your Organization Know Its Customers?


Knowing your customers and how they interact with your company and its products or services has always been important to any business. Customer experience has an enormous impact on revenue and profitability. It doesn’t take much for a customer to leave a brand today. One bad experience and 85-90% of them will look elsewhere.


But in today’s digital world of highly-portable and pervasive connectivity, where sensors embedded in all matter of machines and other physical objects from refrigerators, automobiles, coffee makers, cell phones, televisions, medical devices and even toilets, the ability to really know your customers is more possible than at any other time in history.

Sensors are continuously collecting data, which is to the 21st century what oil was to the 20th century. The organizations that can collect it, organize it and analyze it will have the fuel they need to fully understand their customers and personalize their customer service through optimization of their business processes and procedures. Beyond that it can provide connectivity and understanding of their entire ecosystem, their employees, buyers, partners and vendors.

By applying algorithms to the data collected predictive analytics can provide them an insight into their business sector and give them an advantage over their competitors who are either reluctant or overly cautious about moving into the digital age. This is the basis of competition in our digital world and will become more so in the future; the most important driving force in the economy today that will ultimately be deciding the winners and losers.

Every company should be actively evaluating how it can utilize the tools of digital technologies to create value for itself and its customers. Those that ignore it or try it and get it wrong will make themselves easy prey for those that succeed at what is labeled as digital transformation.

Making this transition is far more than adopting and integrating digital technologies by shoving them into legacy processes and procedures. It is a journey. One that involves a significant transformation of a businesses’ organization and leadership from a traditional hierarchical, decree down structure to one that is more agile and innovative. One that is not only customer centric but employee centric as well. It requires significant changes to processes and procedures that shape interactions with customers and connectedness between divisions within the organization if it is to fully reap the benefits of new technologies. In short, achieving digital transformation requires reshaping every part of an organization if it is to survive in the 21st century.


If Digital Transformation Is So Important, What Is It?


Frustratingly, there isn’t a consistent definition of digital transformation. It has evolved since the late 1990’s to be inclusive of all things necessary for a business to compete in the new reality of our ever-changing digital economy. This definition, though a bit broad, is correct, but it lacks detail necessary for a complete understanding of what is needed for achieving it.


Furthermore, three terms, digitization, digitalization and digital transformation, each a distinct concept, are often used interchangeably as being digital transformation. You can throw in the term digital business as well.

Though each of these are the building blocks of digital transformation they are not necessarily conveniently consecutive steps on the road to its realization. Except that without digitization occurring first, digital transformation cannot happen.

Nevertheless, let’s take a shot at defining it by breaking out its components because there is no question that it is the most important force impacting business today and will continue to be so in the future.




Before an organization can achieve digital transformation the first step must be digitization. Quite simply, the conversion of its analog data, be it text, sound, photos, video or data from devices connected via the IoT, with document scanners to digital 1’s and 0’s.


Doing this enables an organization to capture data that can be extracted and analyzed then converted to actionable information that can be used to realize increased efficiency from the automation of existing workflows, business processes and procedures through the elimination of as many paper centric and manual processes as possible.


Once an organization has converted its analog data to digital it can move toward digitalization.




Digitalization moves an organization into the area of business process engineering. The organization converts data collected from its digitization initiative into knowledge upon which informed action can be taken. It gains insight into how to improve business and maintain competitiveness by taking advantage of previously out of reach or unseen value-producing opportunities to generate new revenue.


The organization becomes a digital business with a focus not only on the customer and his journey when interacting with the organization but also on employees, partners and vendors.

From here the organization moves toward a digital transformation.


Digital Transformation


Digital transformation encompasses all aspects of business not just the digital, which is but a small part of digital transformation. Yes, it is about implementing digital tools to gather relevant data and converting that into actionable information. But that alone will not maintain an organization’s competitiveness.


So, what is to be done with the enormous amount of data that will be generated?  It can be analyzed to create a competitive advantage. How? By providing the organization insight into their customers behavior, a better understanding of which internal processes are functioning as intended, need to be streamlined or even eliminated. By revealing where the organizations resources can be better allocated to maximize their employees’ skills and knowledge and by the distribution this information to the decision makers throughout the organization. So informed, timely decisions can be made that keep the organization’s internal changes in step with the rapid changes occurring outside of the organization in the economic environment.

But this does not happen without an intentional, strong focus on the human factor. Individuals within the organization and throughout the organization’s ecosystem need an environment of free, clear, thorough, steady always on communication top to bottom, bottom to top and across business unit lines.


This can only happen when the organization understands it must break away from the traditional structure and reorganize into an agile organization that eliminates silos and unites previously separated departments. One that creates a culture that is devoid of fear and thrives on collaboration, ingenuity, creativity, experimentation and distributed decision making. One that makes decisions on the basis of reality, what the data, as close to real time as possible, reveals is happening outside and inside the organization.


Doing this will facilitate process and procedure change, new business structure, increasing productivity, becoming more efficient and surviving the unrelenting pressures of competition in our digital environment.


After all. It is about tracking and measuring the individual and connected experiences of people within and outside your organization, so you know if you are delivering value. Knowing if you are from their perspective, as created from their experience with your organization and in the wider digital world, is what will make you a winner or loser in the rapid and unforgiving change that is the new digital world in which we do business.

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Last modified on Wednesday, 20 February 2019 14:04

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