Last week, I saw a company’s LinkedIn post that promised: “Digital Transformation at a fraction of the cost.” This cost-saving would be achieved by acquiring the company’s chatbot technology. If you’re not clear where this is going, I refer you to this article’s title. Unfortunately, the approach being used by many organizations is: Let’s “transform” by buying a new tool. In this case, I invoke the character Inigo Montoya from The Princess Bride by saying, “You keep using that word. I do not think it means what you think it means.”You keep using the word digital transformation, but I don't think it means what you think it means – @RoyAtkinson (channelling The Princess Bride' Click To Tweet
What does digital transformation mean?
Let’s start with some definitions of the word transform:
- To change in form, appearance, or structure
- To change in condition, nature, or character.
There are no definitions of transform which include the words “install a chatbot” or “retire legacy software” or “do mobile first” or even, “use machine learning and other emerging technologies.” All of these things can be components of your transformation strategy, but they’re not transformation, digital or otherwise.
There is a lot of good technology out there. You could, conceivably, substitute some software or other for many or most of the processes, procedures, and tasks your organization performs, but if you aren’t doing the right things (and more about this follows), you wind up doing the wrong things faster. It’s not the digital transformation your organization is looking for.
What are we transforming?
Transformation starts by examining every aspect of your organization including your mission and vision – not the statements but the actual things – to see if you’re providing value to your customers in the best way possible. It continues through the elimination of silos, an increase in collaboration, an openness to innovation, an emphasis on leadership, and commitment to the customer experience.If you find yourself thinking about #digitaltransformation as a suite of shiny, new technologies, stop. Begin by understanding that it’s business transformation that is driven by customer experience and enabled by digital technologies –… Click To Tweet
An excellent example to draw from is the former photographic giant, Kodak. They led the world in consumer-level cameras, but their real cash cow was processing film. When a young Kodak engineer came up with a digital camera, albeit primitive and slow, the company didn’t see its potential. By the time Kodak did produce a digital camera – 18 years later – it was too late, and the company was bankrupt by 2012. No matter what technology Kodak applied to processing film, they still would’ve gone out of business because they didn’t realize that customers don’t care about processing film. They care about taking and viewing pictures. Digital photography eliminated changing the film rolls, finding a store at which to drop off film, paying high prices for developing, and waiting for the results. The customer experience changed entirely when digital photography became the norm. Kodak had optimized and automated their film processing capability, but they were doing the wrong things faster.
The overused Uber digital transformation story is a parallel one. Uber realized that people didn’t want to “get a taxi.” They wanted to get from point A to point B without having to hassle with parking, rental cars, tolls, hailing a cab (or phoning the cab company), dealing with public transportation schedules and routes, and so on. Uber simplified the customer experience and disrupted the industry. Yes, they accomplished this using digital and mobile technologies, but those were the means, not the goal.
So, digital transformation is about the customer experience?
Transformation is about changing the way businesses do business, to paraphrase Doug Tedder. If you’re not paying attention to the customer experience, you’re headed for trouble which usually comes in the form of disruption.If you’re not paying attention to the customer experience, you’re headed for trouble which usually comes in the form of disruption – @RoyAtkinson #digitaltransformation #CX Click To Tweet
Let’s start with two basic questions:
- What is your customer trying to accomplish?
- Does your product or service help them accomplish it in an easy, straightforward way?
If you aren’t sure about the answer to the first question, then you’d best get that sorted before moving to the second. Kodak thought the answer was “Get their film developed faster,” when it really was, “Get good photos fast with as little effort as possible.” The taxi industry, on the other hand, wasn’t thinking about this at all.
How do you find the answers to these digital transformation questions? Ask your customers. One of the best projects I was ever involved with started with the project team asking the customer, “What, exactly, do you need to accomplish?” Then we asked them to “Show us exactly what you do when X happens. Walk us through every step.” We got to understand what they wanted and needed to get done and how they were approaching it. (Remember about examining the vision and mission?) We were able to cut out about 85% of the steps they were taking, thus greatly reducing customer effort. Only then did the software team begin configuring the new tool that would enable this all to work in a way that made sense to and for the customer. The tool was not the goal.
What does all this have to do with IT?
As long as we bear in mind that this transformation is not an IT initiative, program, or project, we can certainly show the relevance of the IT capabilities of the organization. IT – whether that means a department or a capability to your organization – has the job of enabling the digital part of the transformation. The transformation is a business decision and initiative.As long as we bear in mind that this transformation is not an IT initiative, program, or project, we can certainly show the relevance of the IT capabilities of the organization – @RoyAtkinson #digitaltransformation Click To Tweet
As I said in a post for the Institute for Digital Transformation, “Information Technology has a huge role to play in creating and delivering innovative products and services to your customers.”
If you find yourself thinking about digital transformation as a suite of shiny, new technologies, stop. Begin by understanding that it’s business transformation that is driven by customer experience and enabled by digital technologies.
Could one of those technologies be a chatbot? Yes. AI or machine learning? Yes. Mobile technology? Yes, all of these; just don’t put them first and forget the work you have to do.