For some unknown reason, we seem to love these grand and a bit fluffy (at least ambiguous) expressions in business. We often stage them as “the next big thing,” irrelevant of whether they represent anything new or not. Currently, “Digital Transformation” gets a lot of attention, and this post aims to provide some clarity on two key questions:
- What is Digital Transformation?
- Where can it be applied?
What is Digital Transformation?
It is easy to get confused simply due to unclear or different definitions of the same thing. For example, these three definitions:
Digital transformation is the adoption of digital technology to transform services or businesses, through replacing non-digital or manual processes with digital processes or replacing older digital technology with newer digital technology. (Wikipedia)
Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation. (Salesforce)
Digital transformation is the strategic adoption of digital technologies. (Citrix)
These definitions maybe help a bit, but they are still on an abstract level. What does it really mean, in practical terms? How does it impact my business or my daily life? As you will see, digital transformation (from now on DT) does not have to be something grand, or difficult to understand. An excellent place to start is with the American author and futurist John Naisbitt:
While many things change, most things remain constant – John Naisbitt.
He has written insightfully about trends and changes in general, and he makes an essential distinction between WHAT and HOW. What we do remains constant to a large degree. If you look around chances are you are more or less dealing with the same type of problems today compared to some years back. That’s the “what we do,” which is in no small degree orchestrated by human nature. On the other hand, we have how we do things, which changes more frequently. We learn new processes, imply new rules or regulation, or get new tools and in so doing, change how we do things.
This distinction between WHAT and HOW may seem trivial, but it helps a lot getting a grasp on a rather fluffy thing as DT. It is also the key to understanding an aspect often neglected: DT is often not about technology – it is about human beings, as pointed out in this quote from Harvard Business Review.
Digital transformation is not about technology. Why do some digital transformation efforts succeed and others fail? Fundamentally, it’s because most digital technologies provide possibilities for efficiency gains and customer intimacy. But if people lack the right mindset to change and the current organizational practices are flawed, digital transformation will simply magnify those flaws.(HBR)
Technology belongs in the “how” category. It is how we solve our daily problems, but the issues remain constant to a large extent. And yes, we have today access to some much smarter technologies compared to a decade ago, but as the above quote indicates that does not in itself provide any value. If Mr Naisbitt is right (and my many years in business tells me he is) and what we do mostly remains constant, we are up against a mighty opponent, human nature. To harvest more benefits of these remarkable technological developments, we have to focus more on human nature. That means our habits, our fears and in general what we do.
Where can Digital Transformation be applied?
I will end this post with an example of where DT can be applied, and it illustrates the versatility of digital technology. It is a misconception that DT is reserved for large organisations, and involves enormous projects and resources. The opportunities for doing something smarter are all around us, as this down-to-earth example clearly demonstrates.
Early spring 2020, I faced a problem, that clearly illuminates the difference between “what” and “how.” We – my wife and I – are the happy owners of a small farmhouse, which we use as our summer retreat. There we have a greenhouse and due to cold, sometimes freezing, spring nights, frost can be a threat to the plants in the greenhouse. What to do? The easy answer was to install an electrical heater. To save energy, I decided to only run it during the night (controlled by a timer), which is the “how.” Low key solution, but moving the problem into the digital realm, completely new opportunities emerge. As a small training project in Enuda, the team created some cheap and fun gear and developed an app to control the heater. Now, the heater operates according to a set point, and I can handle everything via my smartphone.
Our small private greenhouse went through a digital transformation!
We made this short video explaining the project, and the solution created. Total cost is less than 100 Euro, and the smartphone application can be built on the Ignition Maker Edition from Inductive Automation, which is free-of-charge for such home automation projects.