Needed: An Actionable Definition of Digital Transformation.

A good definition provides a clear picture of what an asset or concept is (and, by extension, what it isn’t). It is something you can cut out, tape to the bottom of your computer screen and stare at every time you feel you are losing your way. The best definitions are prescriptive, not descriptive, and provides actionable insight.

I struggled with the definition of digital transformation as I was writing my book on digital transformation, Winning in the Digital Tornado. I traversed Wikipedia, technology publications, management consultants and respected bloggers, but could not find a definition that placed its finger on the essence of this term. Yet, it was only as I approached completion of my book that I began to realize the flaw inherent within the existing definitions. My journey, however, was enlightening:

By Allan Thomas Chiulli, DigElearn
www.DigElearn.com

November 1, 2018

A good definition provides a clear picture of what an asset or concept is (and, by extension, what it isn’t). It is something you can cut out, tape to the bottom of your computer screen and stare at every time you feel you are losing your way. The best definitions are prescriptive, not descriptive, and provides actionable insight.

I struggled with the definition of digital transformation as I was writing my book on digital transformation, Winning in the Digital Tornado. I traversed Wikipedia, technology publications, management consultants and respected bloggers, but could not find a definition that placed its finger on the essence of this term. Yet, it was only as I approached completion of my book that I began to realize the flaw inherent within the existing definitions. My journey, however, was enlightening:

The best definitions are prescriptive, not descriptive,
and provides actionable insight.

Here is where I and many others begin: Wikipedia, who provides this definition:

Digital transformation is the change associated with the application of digital technology in all aspects of human society.

Then, I looked at CIO (Chief Information Officer) Magazine:

Digital transformation is application of digital capabilities to processes, products, and assets to improve efficiency, enhance customer value, manage risk, and uncover new monetization opportunities.

And here is TechTarget’s definition:

Digital transformation is the reworking of the products, processes and strategies within an organization by leveraging current technologies.

What interesting is that, while none of these definitions are wrong, none of them provide actionable insights. By this I mean, what do you know after reading these definitions that you did not know before you read them?

Overall, I found these definitions offered a lot more about “How” than the far more important “What” or “Why”. So, my journey continued as I then examined what the leading management consultant firms had to say in defining digital transformation. Here is what I found:

Here is Gartner’s definition:

Digital transformation leverages digital technologies that enable the innovation of their entire business or elements of their business and operating models.

And Forrester:

Digital transformation is an enterprise-wide transformation — driven by the aggressive adoption of digital technologies but supported by equally important changes in culture, leadership, skills and processes.

And, finally, McKinsey:

Digital Transformation is creating value at the new frontiers of the business world, creating value in the processes that execute a vision of customer experiences, and building foundational capabilities that support the entire structure.

Of these three definitions, McKinsey by far does the best job. We’ll discuss why in a bit. Gartner and Forrester get lost in the How’s and skip over the What and Why’s. Finally, I looked at two highly-respected writers/bloggers in digital transformation to catch their insights:

Here is Brian Solis (www.briansolis.com):

Digital transformation is the realignment of, or new investment in, technology, business models, and processes to drive new value for customers and employees and more effectively compete in an ever-changing digital economy.

And Galen Gruman, Executive Editor, InfoWorld:

Digital transformation is the application of digital technologies to fundamentally impact all aspects of business and society.

One more time: Good definitions, but a lot more on How than What and Why.

What is missing in these definitions? I searched far and wide: These are the best of the best and I still found them wanting. In my humble opinion, either they are missing something critical or I am. Let me make my case:

The focus of these definitions (excepting McKinsey) are primarily on technology. At first glance, this approach may make sense. Isn’t our world changing due to technology? However, the result is that these definitions are limited, by this approach, to the How’s and not the What’s or Why’s of digital transformation.

A useful comparison might be defining an automobile by describing the manufacturing process without telling you what an automobile is used for and why. When you stop and think about it: Aren’t the reasons a person might want a car (freedom to travel) and how they would use it (to visit family or travel to work) far more important that the technology behind building an engine or constructing an assembly line? The What and Why are prescriptive while the How (technology) is descriptive.

The same is true for modern medicine. The technology behind a knee replacement is far less important than the new-found freedom of mobility and feeling of joy that a knee replacement provides to patients. Again, the What and Why are prescriptive while the How (technology) is descriptive. Nobody wants to see a video on how knee replacement is performed (except some surgeons), but tons of folks with bad knees are thrilled to watch a video of a knee replacement patient describing how they threw away their wheelchair and now enjoy long walks on the beach at sunset.

Digital transformation without a central focus on the
User Experience is like describing an ocean without water,
or human beings without love.

In my journey to Digital Savvy, it took me a while to understand that digital transformation is not about technology, it is about people. And, above all, how people interact with one another. That is the What and Why of digital transformation. Technology is one of the How’s. This is also true for business. So, we could conclude that digital transformation is about how a business interacts with its customers and other businesses. Still, it does not seem like we are quite there yet. And, that’s because we have not addressed the most important ingredient in the definition of digital transformation: The User Experience or “UX”.

Digital transformation without a central focus on the User Experience is like describing an ocean without water, or human beings without love. The core or essence is missing. We also call this the What and Why. The How (technology) comes later, much later.

Here is my and DigElearn’s (my company) definition of digital transformation:

Digital transformation is the impact on people and business from prioritizing and elevating the user experience (UX), through the convergence of enabling information, social collaboration and real-time connectivity.

We begin with “people and business”, the What of digital transformation, and then shift to the “user experience (UX)”, the Why of digital transformation. However, not just the user experience, but “prioritizing and elevating” the user experience. This means that, above all, digital transformation is about “prioritizing and elevating the user experience.” McKinsey, to their credit, also observed that the user experience reigns above all in digital transformation.

Now, we are beginning to have something you can cut out, tape onto your computer screen and stare at every time you begin to feel you are losing your way. A definition that is prescriptive, rather than descriptive. One that provides actionable insight. If you are working with digital transformation, then your user experience is your North Star, and prioritizing and elevating your user experience is your finish line (although you never reach it). Technology is a means to do this, not an end in itself.

Above all, digital transformation is about
“prioritizing and elevating the user experience.”

And, we go further “through the convergence”, because digital transformation is the result of people, technologies and data working in concert.

These factors converging include “enabling information, social collaboration and real-time connectivity.” Think of a rider using an Uber or Lyft app on their mobile phone and watch how digital transformation works. Information is enabled, including the rider and driver’s location, the rider’s credit card number, mobile number, destination, route and time of travel to arrival, the driver’s name, car make, model and year, mobile number and rating. All this information is immediately shared between the driver and rider and a fare is computed.

Enabling information also includes shopping platforms that use Artificial Intelligence (AI) to mine data about a shopper’s preferences. Their online shopping experience now conforms to their actual needs and desires. No more pushing baby formula on 70-year-old men. Brick-and-mortar shopping now relies on payment zones, not checkout lines. Friction is removed as information is real, alive and delivered on-demand.

Social collaboration is people or groups working together to accomplish a goal. For example, a driver decides to turn his or her car into a taxi and begins to earn money by driving riders to their desired locations. The ride is higher quality and lower cost than most taxi alternatives; and this in turn bring forth a greater demand for rides from riders that in turn attracts a greater supply of drivers, all a lower cost to the rider than before. Enhanced user experience at a lower cost—this is the essence of digital transformation. This new and higher market equilibrium of supply and demand for taxi services is called the two-sided network effect of platforms and is an integral part of digital transformation.

If you are working with digital transformation,
then your user experience is your North Star.

Real-time connectivity is the glue behind these digital transactions. A shopper in a grocery store turns down the pasta sauce aisle and immediately receives a text for a 20% off coupon for Bertolli’s marinara and garlic pasta sauce. Real-time connectivity also drives omnichannel marketing, whereby a customer’s online, brick and mortar, multi-device (phone, tablet and desktop) and multi-channel (email, text, website, social media and phone) experience is seamlessly woven into a single experience for a customer. The siloed interactions of the past, whereby the same information is repeatedly provided by a shopper, disappears.

Technology does fit in and is critically important, but as a How. We use technology, such as artificial intelligence (AI) and platforms, to prioritize and elevate the user experience. Now, we can view our technology needs with respect to the North Star of digital transformation—the user experience. If a technology contributes to prioritizing and elevating the user experience, then we may need it. Otherwise, it may not fit.

Still, we are not there simply because we have a prescriptive definition of digital transformation. The key become how the prescription is used, that is, how it becomes actionable. Culture is an important driver (once more, those dang human beings!) The emphasis on prioritizing and elevating the user experience becomes a company or organization-wide imperative.

This begins at the very top:

The CEO and Board Members need to systematically focus on how the company or organization is prioritizing and elevating the user experience. The same is true for the senior and junior executives, employees at every level, salespeople, admins and HR. This is equally true for the partners, suppliers, vendors and distributors. And, of course, user feedback is critical. Now, everyone across the entire value chain has the same focus—prioritizing and elevating the user experience. And through this complete focus, digital transformation occurs as technology is the enabler of many of these initiatives. That is, technology remains a How, but a very important part, of the big picture of digital transformation.

The emphasis on prioritizing and elevating the user experience needs to
become a company or organization-wide imperative.

Can you imagine? The big picture of digital transformation across a company or organization begins with a simple definition. But, only if it is the correct, prescriptive and actionable definition. That is why a proper definition of digital transformation is so important. In this manner, a definition becomes liberating, as it sweeps aside all other distractions and thereby creates a focus that is empowering and effective. Above all, a definition that always focuses us on the fact that digital transformation is about people, business and their user experience.

And, just to recount, here is the definition of digital transformation:

Digital transformation is the impact on people and business from prioritizing and elevating the user experience (UX), through the convergence of enabling information, social collaboration and real-time connectivity.

Allan Thomas Chiulli is the co-founder of DigElearn, an online digital learning membership experience at www.DigElearn.com and the author of Winning in the Digital Tornado. Both are guides to digital transformation for business and technical people needing to catch up and stay ahead of digital transformation. Readers may take a free quiz to measure their Digital Savvy at www.DigElearn.com.

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