Digital transformation has become a dirty word. Executives that I speak with don't like the phrase and Wipro Digital reports that only 6% of the companies they surveyed still use it. Labels can help, or hurt, but with digital transformation failure rates being reported that are north of 60, 70 and 80%, this label is clearly falling out of favor.
But that doesn't mean that there's not value in digital transformation. What it does mean is that execution is so far, failing strategy. However we've seen this story before with large scale enterprise technology efforts. If you've been around long enough in enterprise IT, this might sound reminiscent of the issues that many large scale ERP implementations went through in the 1980's and 1990's.
Rebooting today's efforts around digital transformation should include several key concepts that have been under emphasized in the initial efforts taking place. Bake these concepts into the path forward and execution will start to align with the promise of "digital transformation," you just may not want to call it that.
Own The New Truths
Technology is a tool. New tools capture and exploit different, and often new effects. I refer to these effects as the New Truths. For example, bridging the last mile and last minute of customer engagement through mobile technology is a New Truth that offers different ways to create and capture value; ones that have not existed at scale before.
The exponential lowering of engagement or transaction costs is another New Truth that is exploiting economic effects in new ways. Uber, Airbnb, eBay and Amazon have created markets where none could have been made before because of the massive lowering of engagement costs brought about by many new technologies that capture this core New Truth.
Where engagement and transaction costs are low, markets follow. Markets are the foundation of every business, from how human capital comes together, to how companies create and capture value with their customers. Every company can exploit the power of efficient markets; the connected corporation that now exploits low, to no engagement/transaction costs, is a much different one than the one contemplated over the last century.
AI, the IoT and many other emerging technologies are continuing to push these costs even lower. Understanding the "techonomics" behind these tools will drive a different perspective and an approach anchored around exploiting the effect, not the shiny technology object.
Blaze A Path To New Value
The consumer led nature of technology adoption has permanently changed human behavior and expectations. As a result, what consumers and customers value has shifted. Business has entered not just it's 4th industrial revolution, but the 4th phase of it's evolving value proposition. Having evolved through periods that focused on optimization of the work, the scale organization and understanding and meeting individual needs, competitive advantage is now being created through experiences. Value is being captured by experiences that offer a harmonious and unique integration of on and offline engagement in real time, and real space.
73% of executives surveyed by PwC view their digital efforts as a top driver for revenue growth. Revenue follows value. Any product can embody a unique experience, and an end-to-end digital experience is increasingly the only thing that is unique about many products.
The path forward for digital transformation is about exploiting these effects and a changing customer value mandate. All stakeholders, including the Board, need to be educated and aligned to the foundational root impact issues being altered by the many innovative technologies emerging. Once they are, it won't matter what you call it because you'll be focused on what business has always been about, new ways to create value.