For many organizations, digital transformation consists of replacing older legacy systems with more efficient mobile and cloud-based technologies, or reorganizing IT and business workplace structures to accommodate more collaboration and smaller and more agile teams.
While these are important elements, true digital transformation begins when a company shifts from a product and service mentality to a platform and network mindset. The effort continues and thrives when the people and culture transform to create an ecosystem that engages consumers and suppliers in the creation of new products and new services, and uncovers new insights into what is needed and what should be developed for the market.
A digital transformation roadmap is critical, of course, but may deliver only minor improvements and efficiencies or fail entirely if the framework itself is based on accomplishing small objectives and projects rather than more widespread and more sustainable successes.
“Today’s corporate leaders grew up in the industrial age and often fail to understand the significant differences between the mental models of a product and service company and its primary drivers of better, faster, cheaper and a platform and network company and its primary drivers to engage, enable, and empower networks of buyers and sellers to do the work for you,” notes CIO Executive Council member Pradip Sitaram, SVP & CIO at Enterprise Business Partners LLC in a CIO.com article he co-authored on the importance of developing an accurate digital transformation model before taking that necessary first step.
It is the first in a series of articles written by CEC members who offer their point of view on various strategic, technology and digital transformation topics – hence the column name: CIO Executive Council POV.
This inaugural column tackles the tough issue of defining exactly what digital transformation is and what actions and elements can result in tangible and sustainable success. Typically, a game plan will involve old approaches that don’t mesh well with new technologies and business models. The result “is a reluctance to invest in them at all, rather than an effort to update skills and competencies,” the authors point out.
The three pillars of a successful transformational game plan, according to the authors, include:
- Digitization – allows creation of digital versions of your products and services, like something as simple as an electronic or scanned copy of a loan application.
- Digitalization – automates your business processes to create efficiencies and promote collaboration and communication.
- “Platformation”– creates new platforms and collaborative and interactive networks. This opens the door to re-imagining your business to digitally transform it.
True digital transformation will result in holistic changes across the entire organization, from the leadership and organizational structure to business processes and overall priorities, the authors conclude.
If you are interested in learning more about the strategies outlined in this article and the CIO Executive Council POV column, or would like information about joining the CEC, contact us.