The term “digital transformation” has a nice ring to it, but few organizations understand the true meaning of the words. Most believe it simply refers to moving away from inefficient, outdated technologies. However, the textbook definition of digital transformation necessitates a fundamental shift or evolution of your business model, changing the very way in which your business is conducted.
Few organizations complete full-fledged digital transformations. For instance, updating an outdated mainframe system to a modern, service-oriented architecture in the cloud is not a digital transformation. A brick-and-mortar bank shifting its focus to an electronic online presence with new products and services is.
It’s important to acknowledge that while many organizations either believe that they need a digital transformation or are in the midst one, few actually require a large business transformation. Yes, many businesses could benefit from leveraging cutting-edge enterprise technologies to expand their products and services, or optimize their revenue, market share, and customer experiences. However, it’s a misconception that the majority of organizations need to digitally transform who they are as a business in order to improve those things.
Below are three additional myths about digital transformation that today’s businesses need to overcome:
Myth 1: Digital transformation is a standalone exercise. Most of the time, a digital transformation is a collection of initiatives that all share a common theme. These initiatives build on each other, resulting in larger, cumulative change. Also, it’s important to recognize that digital transformation isn’t a solitary exercise. It requires groups of people committing to change and revamping the way they do things together as opposed to changing one thing they already do individually.
Myth 2: Digital transformation can be completed in one big step. Most organizations have a picture in their mind of what successful digital transformation looks like. However, if they were to use that picture of success for their implementation plan, analysis paralysis would inevitably ensue. Businesses need to work on key initiatives one at a time and aim the outcome of each one in a manner that will facilitate transformation over a period of time. For instance, incorporate new technologies progressively while you extract value out of older technology investments, until the legacy pieces can be eventually replaced.
Myth 3: Digital transformation involves moving to the cloud. Often, technology vendors muddy the waters and confuse businesses about exactly what digital transformation is. No matter what providers may have organizations believe, moving to the cloud is not a digital transformation; it’s a technology initiative. Though it is also a notable component of a digital transformation, a singular technology initiative is never one in and of itself.
For organizations seeking true digital transformation, the most crucial first step is for the CIO to align the technology roadmap with the overarching business strategy that the CEO is driving forward. Where is the organization headed? What business challenges need to be solved to get there, and what are the key initiatives that the CIO needs to activate to achieve those ends? For example, should the CIO focus on streamlining operations around the current legacy architecture to optimize the current state? Or, do they need to look at a more substantial and massive shift away from their legacy infrastructure towards a flexible and scalable architecture to foster a new business model?
Once a digital transformation is underway, it behooves CIOs and the rest of their organizations to refrain from “boiling the ocean.” In other words, start with one key transformation initiative, make it successful, and then build upon it. Rather than attempt to reinvent the wheel or build initiatives in a siloed fashion, remember that each time a new project is created it should help create subsequent projects. Well-established enterprise architecture patterns will support this ethos, and they can be tailored to suit specific business needs and goals.
Perhaps most importantly, when conducting a digital transformation, organizations need to follow one cohesive architecture strategy. No matter an organization’s industry or size, it’s easy to become overwhelmed by a myriad of solutions and disparate data streams. To drive individual business outcomes and foster long-term innovation through effective digital transformation, organizations need to strive for a singular area at which information is processed, stored, and retrieved. In practice, this is done particularly well through micro-service-oriented approaches in front of big data stores. With a flexible, scalable foundation, an organization’s data can be better managed, its core security can be maintained, and its transformative technology initiatives can evolve over time. Absent a strategy like this, most transformation initiatives will struggle towards success.
Jonathan Bingham, co-founder and CEO of Janeiro Digital, has spent over 15 years as part of the technology eco-system. His focus on business strategy and innovation drives the direction of the Janeiro Digital team and continued success for their clients. He began his career surrounded by innovation at Forrester Research. Prior to Janeiro Digital, Jonathan founded Intrusic, an enterprise security solution that raised over $20 million in venture capital, and Surrge, an online music social network. Jonathan has won multiple awards for product innovation, spoken as an industry expert around the world, and been quoted in the New York Times, Wall Street Journal, Financial Times, USA Today, and numerous technology sector publications. He also sits on the Board of Directors for Horizons for Homeless Children.