Digitised vs Digital Transformation

Nina Muhleisen | 1 August 2019


Over four days at MIT, research presented to us proved both digitisation of an organisation as well as ‘going digital’ or true transformation (innovation and new revenue streams), were integral to digital transformation. The key was to keep both moving forward simultaneously in a step by step approach.

Often the focus is on just one or the other, but by simplifying what you do and componentizing the work that enables your organisation to develop digital offerings, is the magic that will fast track your organisation in a digital world.

Digital offerings should be a combination of great tech and customer needs. There are lots of great tech solutions out there but in essence, who actually needs them? We have all seen this before when our technology teams get so excited or focused on the technology that the use case disappears, or where we have spent the time developing the ideal customer journey but it can never be built in our environments.

As with any design, it is knowing precisely what your customers want and iterating your product/service that will make you successful. By doing this, we are able to create, “information enriched solutions that engage customers in a seamless personalised experience.” Jeanne Ross.

The five

At MIT,  they spoke to their framework of 5 key components that you need to start acting on today to avoid having your revenue streams reduced through new and more mobile entrants.

  1. Find the point of intersection – What you can do and what your customers are willing to pay for. Build your capability around shared customer insights.

Developing new offerings is no longer a 5 or 10-year process. It has to become a habit. Understand what customer want, test it and make it better. There are no longer standalone solutions. With digital you can offer a range of different solutions and services bundled together, creating greater value for your customers. To do this you need to balance both the customer desires and translate them into complimentary services, work out what you are capable of in the short term and what your operating model is in the longer term. This can be completed using a structured approach:

  • Ensure all your innovation efforts are aligned to your organisation’s vision and objectives and stop any projects that don’t.
  • Focus on your people across the business not just in an innovation team. Empower them to engage and pursue digital offering effort.
  • Develop a funding model that supports experimentation. Generate hypothesis on where customer value could be offered, develop a pitch and continuously come back to see if it’s correct then either iterate or stop. Make it easy to experiment and learn more often.  The lean canvas is a great tool that can help to support these conversations.
  1. Enhance your Operational backbone – this is getting critical for organisations. It is what will enable companies to scale and be better at their core offerings. This is the core engine and the processes that support that let you do what you do as a business.

Building and improving the digital backbone is often the most complicated thing organisations will need to go through. They are complex beasts formed over time, and to be able to focus on the transformation we can’t be firefighting on the foundations of what we do.

To be successful the real change also needs to happen in the people. It requires a change of mindset. Once you have the executive buy in and the money, the real hard work begins. It’s about the individual and making the change they want to see. IT, the business and operations need to talk together and build one vision.

  1. Operational backbone is table stakes for becoming digital – this is really important and needs to happen
  2. It takes a long time sometimes over 5 years, this is true transformation and requires a cultural We don’t have the time so business transformation, not just tech or process.
  3. Don’t have the time, and want to speed things up? Reduce the complexity of your project, narrow the scope and lower your standards. It doesn’t need to be perfect.
  1. Build your Digital platform – this is where your products and services live and where you can configure features to use again and again instead of building from scratch for every single customer. Making changes to existing features makes you efficient. You can then begin to bundle reusable components into new digital offerings and test and learn faster than you could before. Having a digital platform enables you to partner closely with others to build out the end-to-end value proposition.

Building your digital platform should be completed with the business and aligned to their value chain. Working together every step of the way, working toward the same goal will help make those important decisions. For this to work, you must have an operating model that supports this partnership and provides flexibility to iterate on the design as requirements change.

  1. Establish an Accountability framework – A key component to the operating model is  Assigning accountabilities to ensure that the components are built and reused with the end goal in mind. This is a different way of doing business because it requires designing your organisation in a way that enables you to design and build simultaneously, leveraging the work of multiple teams. In a digital environment, we need greater agility to meet changing needs, with business, technology and operations working closer in unison to deliver the outcomes. With an established structure, you can then have the flexibility to scale up and down as required.
  1. External developer platform – This is where your customers are asking to connect into your platform to extend the offering. By enabling integrations into your business you can further develop the relationships with your customers and have this be completed with partners who have aligned missions.

Transformation isn’t that easy.

However, it’s not just about running an operational excellence program or running an incubation workshop to generate that next big idea. Whilst I hate to use a buzz word, it is a journey. It is going to be challenging as you face into legacy systems, unclear value chains, complex operations and let’s be honest, corporate politics. To be successful this needs the organisation aligned and working together on a clear vision of how you are going to get there. Even with that, it is still going to take five years or more. There’s also no silver bullet that will work for all organisations, but there are world-class methodologies and frameworks that can be used to achieve the transformation you want.

All of these will be components that will form part of your journey, the hard part now is mapping out your unique path to get there.

Where is your focus for digital transformation?