Digital Transformation gets thrown around a lot these days as a buzzword in corporate boardrooms or CIO strategy meetings and that’s all fine, but what does it mean and how do you actually do it?
Before I get into those answers, I must start out by saying this is going to be based on my experience and not an excerpt from Wikipedia, as I would not want to waste anyone’s time with something textbook that you can look up yourself. Don’t get me wrong, there is nothing wrong with textbooks or studying up on a topic to get some grounding before you dive in. My experience is centered around Quickbase, an essential tool for digital transformation.
We are going to start in part 1 with outlining what DT is and then part 2 will help you see how Quickbase plays a key role in this process. Anyway, here is what Wikipedia says on 9/9/2019 as far as a definition goes for this topic. (They also flagged this a potentially confusing, imagine that!):
Digital Transformation (DT or DX) is the use of new, fast and frequently changing digital technology to solve problems often utilizing cloud computing, reducing reliance on user-owned hardware but increasing reliance on subscription-based cloud services. Some of these digital solutions enhance capabilities of traditional software products (e.g. Microsoft Office compared to Office 365) whilst others are entirely cloud-based (e.g. Google Docs).
As the companies providing the services are guaranteed of regular (usually monthly) recurring revenue from subscriptions, they are able to finance ongoing development with reduced risk (historically most software companies derived the majority of their revenue from users upgrading, and had to invest upfront in developing sufficient new features and benefits to encourage users to upgrade), and delivering more frequent updates often using forms of agile software development internally.
The change to the subscription model also reduces software piracy – which is a major benefit to the vendor.
Some of these digital solutions enable – in addition to efficiency via automation – new types of innovation and creativity, rather than simply enhance and support traditional methods.
One aspect of digital transformation is the concept of ‘going paperless‘ or reaching a ‘digital business maturity’ affecting both individual businesses and whole segments of society, such as government, mass communications, art, medicine, and science.
Digital transformation is already underway but is not proceeding at the same pace everywhere. According to the McKinsey Global Institute‘s 2016 Industry Digitization Index, Europe is currently operating at 12% of its digital potential, while the USA is operating at 18%. Within Europe, Germany operates at 10% of its digital potential, while the UK is almost on par with the US at 17%.
It’s that second from the last paragraph where my own personal definition lies, and I do agree that in my experience doing process transformation with hundreds of clients, our Digital Potential is still vastly untapped.
Let’s start with the “Digital” part…
To me, Digital is clearly talking about computers, software, the Information Technology (IT) department. It also means that some of those things, especially the software, are migrating to running in “the cloud”. Honestly, though, I don’t think the cloud has to be involved to digitally transform a process, or by extension, a business, but it sure can help.
If you boil down the ocean for us businesspeople…
If you are an IT Architect, please move on at this point as you are going to accuse me of oversimplifying…
For almost any business there are some really basic BIG segments of the digital landscape that you pretty much have to deal with in some way. I honestly feel like we can all sometimes get hung up in lofty strategy sessions and get lost in a maze of our own creation. So, here we go with my Big 6 (or 7 as you will see at the end).
- At the far left of our diagram, we find the Blue Can and the WordPress Logo, which is one of the most popular website management softwares out there. A web presence is pretty much required for any business especially any B2C but also with B2B, who does not make the first stop at the website to check out a business before you would even do business. Websites and other social precedence can be important ways to involve clients, customers, and people out in the world in your business, and again there are LOTS of choices and it’s not my intention to tell you how to build and manage this wedge of the ecosystem pie.
- Next, let’s look at that Green Can with the QuickBooks logo. Everyone must have some type of Accounting Software. Businesses run on money and you have to track what is coming in, going out, moving around and when. Skip this progenitor of the Digital transformation revolution and you are keeping paper ledgers with Bob Cratchit. Lots of great choices here and it depends upon the volume of your business financial transactions and how complex your business accounting really is. QuickBooks is the king for small business, Sage is a great step up and then, of course, the big ERP’s at the top of the heap like Oracle and SAP have the Accounting Module at their core.
- Going back to the left side we find the Orange Can with the Microsoft Office Logo. Since Mimeograph sales in the US are pretty much bottomed out, I think it is safe to say that the next obvious but necessary leg of an average “Ecosystem” is some type of OFFICE software. Now this can be desktop, server-based on-prem, and of course the cloud, yes Google and Microsoft are the big kahuna’s in this space, but there are actually a lot of choices. Especially for the one ubiquitous member of the OFFICE products. your Email Client. (Outlook, Gmail, etc. etc. etc.)
- At the far right of our diagram, we have the Yellow Can, Business Intelligence with a nice Microsoft Power BI logo. While Analytics and BI are super important for taking a business to higher highs, this is often not well done, especially for smaller businesses without access to professional IT help. However, with the advent of low cost and very powerful, lower-cost cloud options like Microsoft Power BI and Tableau, anyone with really good spreadsheet skills can figure this out. Simply find out if your process support tools have a native “connector” to your BI tool and if they do its pretty easy to learn, if not get some help from a pro, like com That said, you can certainly get a lot of hardcore INTEL from your operational systems on their own, but eventually real BI lets you bring data together, called “Data Marting”. This is where the “cool kids” hang out, so you can see how information from different systems might correlate.
- One can that might be missing would be the good ol’ Documents but I ran out of colors and space on my diagram. Aaaahhh Documents, yeah, we still have ‘em, lots of ‘em, and it’s amazing how even small businesses have 5+ different places to store the digital ones and so many still do paper ones it is amazing. We also interchange the words Documents and Files but no matter what you call them, they are inevitably stored on various “Drives”, how fondly I remember my Y drive (sigh). For my purposes here they are the same thing. In my humble opinion, this is the low hanging fruit in the digital transformation garden, but it is not always as easy as it seems. My advice; get ONE digital content/document management system and stick to it. Put everything in there and make sure all of your systems will work with it. That said, specialty docs like engineering or CAD files, or really big files like high-resolution movies are exceptions and may need their own special options.
- Finally, we get to the meat and potatoes, the Purple Can with the Quickbase Logo. The Operational Systems of a business are where the rubber really meets the road. This is typically what helps you gain customers and deliver your product or services to those customers. Along the way you have to manage things like materials, purchasing, inventory, people, equipment, work orders, manufacturing orders, order filling, packing, shipping, HR, compliance, timekeeping, safety, scheduling, estimating, contract management, asset management, resource management, etc, etc.. whew, I hope you get the point. There is such a wide array of software from super-specific professional tools (those you need If you are in a specialized function or industry), to more general things like CRMs, Project Management, and Timecards. This is the area where you almost always have the most opportunity to realize some of that “Digital Potential” we saw in the Wikipedia definition. Here is the playground where my company, mcftech.com, spends its time. I have become a firm believer over the past 15 years of delivering significant process improvement to processes from A to Z from small businesses to the largest corporations, at the department level the challenges and solutions are very similar. The rest of this blog series will focus on Digitally Transforming the Operational processes of a business, and to be even more specific how you can use the new breed of Cloud-Based Platforms (PssS) to fulfill many if not all of your operational software needs. I will pick this concept up in detail in part 2 where we will look at what it takes to use these tools to support your business across the board. They are not always inexpensive, but when used to their full potential the ROI is tremendous.
- Before we end though there is the BRIDGE in the diagram above. What is that all about? you may ask. The bridge represents INTEGRATIONS. It is important that your strategy includes integration. This used to be super hard, expensive and mysterious, but again the cloud comes to the rescue. There is a whole new breed of Integration Platforms out there (iPaaS). Look to part 3 to deep dive this concept but as a general goal, you want to integrate your systems so that NO PIECE OF DATA is ever entered twice by a human being. This will tie your whole business together, get everyone on the same “TRUTH” and that alone will energize so much efficiency and productivity, you will wonder why it took you so long to do it. And yes, like most of the newer tools they are working hard to make it more and more possible for a business person to understand it and even use it themselves. See articles on Citizen Development if you need a confidence booster.
Check out Part 2 coming soon, where I want to highlight how Platform as a Service is supercharging process improvement at the front lines and driving REAL digital transformation for those brave enough to try.
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