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What does ‘digital transformation’ really mean?

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Digital transformation means the end of silos, an agile approach to developing the business, seamless communication with the customer from across an organisation, marketing science, empowering staff, internal and external collaboration, but hanging above it all, like a cloud in the sky, will be the, well will be the Cloud.

In traditional businesses, silos were dominant. The business was often broken up like a department store – barriers between each department – with some companies broken with respect to different products too. Silos gave way to the multichannel business. Communication between departments was managed by a chain of command, only people at the top, who were higher up than the walls that separated the business, could oversee multiple departments.  In a digital business, the divide between departments dissolves into the ether – teams made of people from multiple departments are set up to work on a project.  Once a project is complete, the teams are broken-up, and new teams are formed for the next project.

Agile is the watchword in the digital business. Companies need to try new ideas, test them quickly and if the ideas fail, let them fail fast, learn and try something new. This is the digital way, failure is not something the digital business fears, rather it acknowledges that this is an important part of the learning and product development process. The key is not so much to avoid failures. But to fail fast, fail in small ways and learn.

Staff are empowered to drive new ideas forward, to make decisions – without cascading every decision up the management hierarchy; and when things go wrong because a new idea or experiment failed, staff are not admonished – the key is to learn, not create a culture where people are afraid to make decisions or experiment.

In the digital business, the customer is core to everything – whatever the business does, the customer must be the focus, but at the same time the customer expects seamless interaction with the business, whether their contact is social media, chat rooms, email, online booking, telephone or in person at a store. To the customer the different experiences must feel similar, and the characteristics of the company, its identity, must be common to all customer communication.

The Cloud is a key part of the digital company, supporting collaboration within the company, with the customer and maybe with the outside teams. The Cloud supports a more dynamic way of enabling people to work together, they are no longer tied to the same office area or desk. At the same time the Cloud makes IT infrastructure a largely variable cost, something that can be ramped up and down.

If a traditional company could be compared to a department store, with each level corresponding to a department, the digital business is like a one-storey building with a flat roof.  The first floor is the customer. The roof is the business, never far from the customer, and above, is the sky, and in the sky, is the Cloud.

 

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Tags: Business, Digital Transformation