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There is no doubt that digital transformation is hyped at the moment and on many senior management and board agendas. That’s why I in this chapter would like to dig into the root course of why it has begun to be hyped and look at the difference between technologies and digital transformation.
As mentioned in the first chapter, transformation – in a historical perspective – is not new, but every time we have encountered transformations in our society and work, we have often seen things been hyped or given as doomsdays prophecies for companies. It is sometimes disguised as innovation or disruption too.
But who is delivering these prophecies?
If you look closer, they mostly come from either political side, consultancies that either are within this field or can see a benefit of switching their companies into the area of subject, technology companies or general media and especially business media that lives of the latter’s money on advertising spend.
I am not going into a huge historical trend or moral discussion here, but just cut it clear that of course, hyped matters comes from somewhere and especially those who want to sell you their time and competencies after they have created a demand and urgency.
I believe that most of you readers already know that, but for me, it is important to explicitly mention this. So before going any further into the digital transformation trip from the empty and lost buzzword plains to the boardrooms, I would like you to join me for a short definition journey.
The basics of digital transformation
Let’s try to dig a bit into the very core of transformation itself. Transformation can be defined in various ways depending on the context. But the very basic definition of transformation is “a change in form, nature, or appearance”.
From a mathematical point of view transformation is “a process by which one figure, expression, or function is converted into another one of similar value”.
In linguistics, it is “a process by which an element in the underlying logical deep structure of a sentence is converted to an element in the surface structure”.
And in biology, it is “the genetic alteration of a cell, by the introduction of extraneous DNA, especially by a plasmid or a heritable modification of a cell from its normal state to a malignant state”.
If we look at the typical definition in an organizational context it is “a process of profound and radical change that orients an organization in a new direction and takes it to an entirely different level of effectiveness. Unlike ‘turnaround’ (which implies incremental progress) transformation implies a basic change of character and little or no resemblance with the past configuration or structure”.
So, a transformation is going from one state to another, which means that the previous state is no longer valid or used and taken over by the new transformed state.
If we then add “digital” into the equation, we are not only transforming, but also transforming from an “existing digital” or “non-existing digital” into a new state of digital.
That was a tough one, but in layman’s terminology it means; whatever we have digitalized before, will turn into a new digitalized form or anything non-digitalized will go into a digitalized form.
So that was the very core of what transformation and digital transformation is, from a definition perspective, please note that and then we jump quickly into the next part.
Internal and external digital transformation
We now have the core definition in place, so let’s talk about the different types of digital transformation.
Well, digital transformation can either be internal or external. Internal digital transformation is transformation related to your company. It can be anything like; transforming the way you work together, how you organize, how you communicate, how you do sales an obtain customer insights that will give you new knowledge about our market and help you prioritize product development.
When we are talking about external transformation, we are talking about transformation in your products and services towards our market and customers. It can be IoT for physical products, new ways of building your software, how you offer maintenance and support, new pricing models or anything else that is customer oriented.
And now comes the tricky part.
When you do internal and/or external transformation you are transforming into a new state. This means that the state you were in before is changed. The effect of this is, that regardless of what kind of change you are talking about, you must change the way you work accordingly. Otherwise, you will put new tasks on top of already existing tasks and create stress, frustration, and inertia and slow the digital transformation down.
While we are at it, I would like to mention that since digital transformation is changing to a new state, which is a fundamental change in employees’ tasks and daily jobs, it is not advised to do a radical change across the full organization at the same time, as this will cause slowdown and significant inertia on the organization.
It will most likely cause the company’s revenue and profit margins to stall or drastically fall and then you will not see the true benefits of the transformation – this I will get back to later in the chapters.
Well, now we covered some of the basics about transformation and digital transformation. Let’s move on to the buzzword part.
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