While I am a consultant, I have to say that the consulting world is notorious for coining phrases that create mystery and intrigue to their listeners whereby they hope to create a sense of need for their services. After all, since the consultant uses terms no one can understand, they must possess some kind of knowledge that the client in front of them needs, right?
As I look back over the last couple of decades some of those terms stick out in my mind. They are terms that consulting firms first used in a report or book somewhere, and the industry blindly took their lead and used the same term too (often with varied intended meanings). Some examples are:
- MRP – instead of just saying “make sure you have the right raw materials”
- MRP II – rather than “oh yeah, manufacturing consists of more than just materials”
- ERP – instead of “your primary computer system”
- Lean – rather than “cutting the fat”
- Kanban – instead of “let’s use pictures”
- JIT – rather than “delivering on time without a boat load of leftover inventory”
The list goes on, but my new favorite is the term “Digital Transformation,” and since I am a consultant in the ERP arena (and yes, I see the irony in my using one of the terms I just described), the term is close to home for me. What does Digital Transformation mean anyway? It could mean many things:
- changing old lightbulbs to LED bulbs
- watching numbers on a screen change from one to another
- a pianist performing on an electronic keyboard instead of a piano
- surgery to use my big toe to replace my missing thumb
Many consulting firms are capitalizing on this new term by adding mystique to their own personalized definition. Most consulting firms or academic writings will define Digital Transformation as some version of the following:
Digital transformation is the process of creating new business and operating models by building a foundation to implement and integrate digital technologies.
In other words, using computers to get better at what we do.
It is a radical rethinking of how an organization uses technology, people, and processes to fundamentally change business performance. It requires cross-departmental collaboration in pairing business-focused philosophies with rapid application development models.
Which basically means we all need to use computers as a group.
It connects a company with customers by speeding up the pace of new concepts allowing businesses to gain more business and more profit.
i.e. you can use computers as a group to make more money.
…and now the fear factor:
Tomorrow, only digital businesses will succeed. The best have already moved from being providers of traditional consumer goods to digital leaders.
Only companies with computers will succeed into the future? Wow, I heard someone say that in 1972… fascinating!
I feel better now. I was able to use some of my intellectual bandwidth to deploy sarcasm while taking a 5000 foot view of how the industry has defined Digital Transformation. I am now free to expound my consulting wisdom and value-add to right size the topic while I do a deep-dive into the subject matter, which is consulting speak for, ‘Let’s use a bit of common sense and discuss the subject.’
For those of us who found the above definitions of Digital Transformation a bit confusing, allow me to offer a straightforward explanation:
Digital Transformation is the use of modern computer tools to create transactional visibility across an entire company for the purpose of improving business performance.
Sound too simple? That’s really all there is to it. However, in all fairness, to get the full value of newer technology there are many factors that will impact a company’s ability to move past the pack within their industry. These factors involve many aspects of the company such as the leadership philosophy, the internal processes, the underlying systems and above all, the willingness to create visibility. You might ask, visibility of what? And I would answer: almost everything.
Over the next few posts, I will explore what led to the need for Digital Transformation and also the fundamental elements needed to accomplish it. This should demystify Digital Transformation once and for all and give you a straightforward roadmap, which you can use as you think about your company’s goals and what it may take to apply the fundamental elements necessary for a successful Digital Transformation.