The business world and the marketplace in which you compete is changing, quickly! Customers demand products, services and experiences that utilize modern technology. They expect all the information your company knows about them to be the basis of your business processes and each interaction they have with you. Customers don’t care if you are a small business or large enterprise, if you are a young company or have been in business for decades – they just care their needs are addressed quickly and efficiently, so they can pursue their daily tasks and goals.
If you make them happy, then your customers will tell their friends about the experience. If you make them angry or frustrated, then modern customers will be very active telling the world. Operating effectively in the modern digital world isn’t a “nice to have” – it is a necessity! Your competitors are experiencing these pressures too and those companies which are proactive and satisfy customers’ expectations will benefit from a competitive advantage others will struggle to achieve. This is why digital transformation of your business processes is so important for your company – it enables you to compete successfully in the modern world.
Transforming your mindset about technology and business processes
For many companies and business leaders, digital transformation is seen as a technology issue: modernizing the IT environment and adapting business processes to use data and technology in new ways. This is partly true (most companies do need to upgrade and refresh some of their IT systems), but digital transformation is more about changing and updating your mindset about technology than updating the systems themselves. Technology can no longer be considered separate from your business processes, it must be embedded and inextricably connected to everything that you do.
Traditionally, companies have thought of technology like they would physical assets (such as buildings and machinery) that are acquired, used and depreciated. That perspective was appropriate 10–20 years ago when IT environments consisted of expensive servers, network infrastructure and other components that were acquired through capital procurement processes and expected to last for a long time. Business processes were designed for the long-run – they were stable, consistent and didn’t change much. Changing systems was costly and time-consuming, so when you bought a new asset, you planned to keep it. It wasn’t uncommon for an IT system to be essentially the same for 5, 10, or even 20 years. That world is gone and isn’t returning. Modern business processes must be fluid and adaptive to take advantage of the newest technology to support them.
Making decisions in the present and expecting the future to change
Modern companies are increasingly framing technology decisions as, “What must we do to support business processes today?” instead of, “What will we need during the next few years?” This mindset of making decisions in the present and embracing change is at the heart of digital transformation. Business processes and the technology that support them are dynamic and disposable – less like long-term assets and more like tools and consumable resources used to achieve a specific outcome, and then discarded. There are more choices of devices, software and services available in the marketplace than previously and acquisition/switching costs have decreased.
More importantly, the variety of 3rd party IT components is changing and expanding faster than ever. As soon as a new need is identified within the business process, someone is building an application, a service or a new device to satisfy the need. This is important in the context of digital transformation, because the accelerated pace of technology change doesn’t have to slow the pace of change in your processes. Digitally enabled processes support a faster evolution of your business.
Digital transformation isn’t about a one-time upgrade to modern technology and reaching a certain destination, it is about embarking on a technology journey on which your company will be able to adapt continuously and embrace new features and capabilities as they become available to support your evolving process needs. During 2018, that might be big data, social media, digital advertising and IoT devices. Next year it might be machine-learning, artificial intelligence and next-generation automation. Digital transformation is all about embracing change and designing business processes that can change to keep pace with your business needs and customer demands.