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Beyond technology: the process of Digital Transformation

No doubts that Digital Transformation (DT) has been part of most business strategies in every industry (Telecom, Finance, Retail, Software, and more) in the last couple years. Every executive I’ve had the opportunity to talk to, is either in the process or about to be in the process of Digital Transformation. Moreover, the message is direct, if you are an executive and are NOT thinking about Digital Transformation, you need to acknowledge, your company may not be able to compete soon.

However, what is Digital Transformation? The concept of Digital Transformation is somewhat ambiguous and a simple Google search will show multiple definitions. To me, Digital Transformation is the integration of technology, process, and culture to deliver value to customers while continuously challenging the status quo in the Enterprise.
One thing is to note, no matter what is the wording around the concept, the following pillars for digital transformation are consistently present across the board:

  • Customer Experience
  • Leadership and Culture
  • Digital Integration
  • Operational Agility
  • Workforce Enablement

Let’s dive a little bit into what these pillars mean in the DT process:

Customer Experience: This one is the most important and straightforward of all the pillars, it is about putting the customer needs first, translating their requirements into business drivers. It is about understanding the customer expectations and behaviors to drive innovation and change within the organization.

Leadership and Culture: The lack of leadership and cultural transformation inside the organizations is, in my opinion, the first reason for failure in the DT process. To win, leaders need to be more than supervisors and managers; they need to lead by example and be able to adapt and react quickly to changes. This new breed of leaders should also think differently and encourage people within the organization to do the same. Leadership is paramount to create the culture needed to transform, a culture based on openness and merit. That will be key in the success or failure of the transformation process.

Digital Integration: Digital Integration is the concept that all the information and data from one platform or device should be able to be ingested and processed in another. It is about enabling the distribution and movement of data across systems, perhaps to be analyzed and make decisions based on it.

Operational Agility: It is the ability to find and seize opportunities in order to improve operations and processes within the Enterprise. Becoming agiler while improving responsiveness and collaboration with ad-hoc actions.

Workforce Enablement: Last, but not least is Workforce Enablement. It's about molding your workforce to adapt to the new ecosystem, enable it for the required future work. Prepare employees and leaders to embrace digital strategies, be flexible, innovate, collaborate, and share. Building a strategy that allows retaining the top talent, while also driving the recruiting and enablement of skills that you need in the organization.

Why becoming digital is important ?

I want to point out the importance of Digital Transformation with two real life examples:

Blockbuster vs. Netflix:

Blockbuster was without doubts the biggest provider of movies and game rental services of his time. At his peak, employed around 84000 people worldwide and had 9094 stores. However, in the 2000s something happened: Netflix.
Netflix's initial business model was a rent-by-mail subscription that evolved to streaming services and original content. They were capable of innovating, using technology to create a superior product while not losing eyesight on the final customer and their experience. Today, Netflix has a whopping 125 million subscribers worldwide with revenue winnings (2017) of 11.692 billion.

The TAXI industry vs. Uber:

Uber is one of my favorite examples of using Digital Transformation to disrupt an old industry (Taxi). Founded in San Francisco in 2009, the company created more than an App; they created a global system to connect consumers and providers of transportation services.
Critical things for Uber's success:

  • Having a clear value proposition
  • Investing in their product and customer experience
  • Building the right team
  • Been early adopters/disruptors on the ridesharing space
    In 2017, Uber generated 7.5 billion dollars in revenue.

However, Netflix and Uber are not alone in this list of companies that were able to succeed by transforming into empowered digital enterprises, here are couple more examples:

  • Alibaba
  • Amazon
  • Airbnb
  • Tesla

If you are still reading and don't have substantial reasons to digitally transform, let me give you a couple:

  • Your company will be more profitable and efficient
  • You will be able to retain current customers and create new ones
  • Your competitors (the ones that you know and the new ones to come) are most likely already doing it

The world is a digital landmark, to compete, Digital Transformation is not an option, it's a necessity for survival.

Julio Villarreal Pelegrino

Julio Villarreal Pelegrino

Julio Villarreal Pelegrino is an Architect and Systems Engineer with over 15 years of experience in the Software Industry. Currently, he is a Chief Architect - Cloud and Infrastructure at Red Hat.

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