The Inevitability of Digital Transformation

The Inevitability of Digital Transformation
The Inevitability of Digital Transformation

At the inception conference for Microsoft’s Envision this past week in New Orleans, digital transformation was at the heart of CEO Satya Nadella’s keynote address. Anyone not present for the keynote or not particularly focused on the software industry could be forgiven for wondering why a speech was delivered about transferring your photos or music to digital media. After all, haven’t we already done that?

However, the subject was actually nothing quite so mundane or basic. No, when Satya speaks about digital transformation he is actually talking about the transformation that happens to everything in our lives when all the data we need for decision making becomes immediately available to us through digital access. The audience for Envision is the business leader and we all tend to think of digital solutions or the deployments of those solutions as business-related investments and decisions. But to Satya’s point, the true benefit of all of this digital engagement should be realized in our very personal human life and in the opportunity to reclaim time and attention for the things that matter most.

Sounds exciting and powerful, but it makes me wonder how ready we are, the rank and file of businesses, for this transformation. And if we admit to not really being ready, are we willing to take the steps individually or in our organizations to participate?

Do we understand digital transformation?

Let’s look at what digital transformation means. It means that the gaps that currently exist between one point of integration in a process flow and another will be narrowed or even closed with the use of a digital solution. In plainer terms, it means employees with mobile devices record their field work digitally and submit the transaction details with the push of a button. It means customers are billed and payments are made without any further manual or physical activities. In such a scenario, not only is the cost of completing many different physical transactions reduced, but managers can easily access analytical and other data so that decision making is more useful.

Why Now?

These ideas and expected outcomes have been around for a while, so why the fuss? Simply put, it is because the reality of achieving these outcomes is so significantly closer to us today than it was back in, say, the 1990’s. Gordon MacDonald, in his presentation at Envision on the future of business solutions for SMB’s, mentions that today’s college graduates entered high school in 2008 and many who will be the business leaders of the future don’t know a world where green screen dumb terminals were the only data processing option. There is, in fact, a growing wave of human resources who will be intolerant of less than full digital engagement and yet so many business are still far from up-to-date in their digital transformation journeys.

Digital transformation, like any transformation, will take resources. Businesses are very protective of their resources and how they deploy them. The cost of any transformation cannot exceed the benefit that will be earned and yet there are some investments that must be risked in order to simply stay in the game. I believe we are approaching a point where businesses will have to undertake investments in digital transformation because of the service levels their customers expect and not simply because of obvious strategic benefit.

Will it be less of a ‘choice’ and more of a ‘must’?

In the early days of the World Wide Web, those of us in technology encouraged business to be early adopters of ideas like developing their own web sites. We preached that customers or potential customers were signing up for ISP’s at an increasingly rate and would ultimately want to be able to place orders and view product information online. We believed a web site was a strategic and competitive necessity. While we weren’t wrong, we weren’t completely correct. Our error was mostly in understanding how much time was available for adoption. We weren’t fully aware of the time it would take for all the elements that were needed to come together. Our evaluations did not consider tasks like laying fiber to carry content or developing batteries that were lightweight or even establishing the infrastructure required to bring us our connections. But having been through that process, we know that once the elements come together the transformation is very rapid.

So, for this next wave of digital transformation, does anyone know how much time individual businesses will need to prepare for participation? Will those who move later in the cycle still be able to realize comparable benefits? What will the difference in cost be for moving sooner rather than later?

So, what do you think? Is the rate of digital transformation moving so fast that companies should be concerned about being left behind?