What is digital transformation?

March 20, 2018

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Design & Strategy Director

Digital transformation is at the forefront of everyone's mind. It is not new, having been on the executive agenda for the last 10 years. Digital transformation spending is projected to hit $1.7tn by 2019, and research suggests that up to 84% of companies report failing at digital transformation, so unless things improve companies could stand to waste $1.42t by 2019, Ouch! Why is it so hard?

I believe the problem is the word ‘digital’.

Transformation is inevitable in business, as it should be. We have prefixed the word ‘digital’ because we are in the digital age. This leads to a focus on the format of the tools and technology, not the reason for the transformation in the first place.

What it isn’t.

A recent example; a client asked,

“We have invested heavily in digital platforms and systems to capture data, we have paid very expensive consultants to create a process on how our business should be run. It’s not working. Can you help us use the data to enforce this process?”

This is exactly what transformation isn't.

Transformation is a continuum, not an isolated endeavour that is ‘finished’ on a project timeline then left until a new technology turns up. In fact, this is often an expensive and very risky strategy.

  1. Transformation is an organisation that has the capability and autonomy to react and adapt to the changing expectations of customers. It’s about responding to customer needs rather than ‘turning the ship’

  2. Transformation isn’t just a rush to catch up; a race for feature parity; it is an opportunity for companies to grow and realise their human potential.

  3. Digital is very much part of this process in our world today, but it is primarily an enabler of doing better work, delivering a better service and serving happier customers. Organisations tend to allocate far more resources to the procurement of technology than to the experiences of the individuals upon which the success of the business hinges. Adding digital layers to existing processes does not transform a company on its own, and if done in isolation it just adds noise.

Adding digital layers to existing processes does not transform a company on its own, and if done in isolation it just adds noise.

What it is.

The capacity to innovate is fragile in the face of entrenched habits and unspoken fears. Company politics, resource constraints, demanding executives, infinite stakeholders, inexperienced teams; no amount of new technology or expensive consultants can overcome these challenges in isolation. And it's definitely not about top-down complicity.

For Reason, transformation is about people within the business; it’s the link between being human-centered and being successful. Business transformation should be driven by meeting and exceeding customer expectations and making the lives of the people who work in the business clearer, easier and more rewarding. ‘Digital’ is the enabler; it allows people to be more human and thus do better work.

We believe that Lean, Agile, autonomous cross-functional teams will overcome the barriers and allow businesses to achieve transformation. Companies open to transformation allow people to reach their creative potential, work smarter, be happier and ultimately drive more meaningful relationships with each other.

These teams represent the ‘end-state’ of any successful digital transformation: people working brilliantly together, teams that are greater than any individual, delivering quality service to happy customers, powering a businesses that continually evolves, creating new business models and unlocking new growth.

How do we build it into our own business?

Our mission at Reason is to create places where people can do their best work. We believe that empowered, cross-functional teams are the engine of this human-centered transformation; it is the logical next step from human-centered design.

Giving people the power to operate in this fashion allows for constant learning, strong relationships and a purpose; everything that research tells us about happiness in the workplace.

People empowered to do this have the potential to make coming to work better, make the work they do better and ultimately deliver a better service to the customers they serve. Because that is what it is all about in the end.

Read our case study about how we transformed employee systems at Gap