Creagh is a global Strategic Business and Technology Leader and Advisor (CIO/NED), focusing on the people, process, and strategy aspects of business and digital transformation, with the mantra of Bridging the gap between Business and IT, Not Technology for Technology’s Sake and ‘Why’ vs ‘What/How’. With a reputation as a highly valued strategic partner and a passion for driving business through technology and digital innovation, Creagh has a career spanning three decades of international experience, working with small businesses through to large global enterprises. Working across multiple cultures, Creagh has successfully fulfilled senior technology-focused business leadership roles and specialises in ensuring that M&As and expansion objectives are successful by analysing and considering target market cultures and ways of working – which he believes are too often the unconsidered factors leading to failed endeavours and significant impact to the time and budget estimations of transformation and expansion initiatives.
Over the past few months, a relatively new role has emerged, that of the Transformation Director or, as is being seen more and more, the Chief Transformation Officer (CTrO). It seems that in many cases this role is looking to work alongside (in some cases reporting directly to) the Chief Technology Officer (CTO), in others reporting directly to the CEO, in order to provide a more strategic and business-focused approach to digital and technology. In many cases, though, the role does not appear to be purely an IT role and, instead, has purview across the entire business and may even consider all forms of business transformation – not just ‘digital’. The role usually has a remit somewhat in common with the fading Chief Information Officer (CIO) role, in aligning transformation initiatives with board and company strategy and objectives, whilst also crossing paths somewhat with a Programme Manager.
In alignment with this, it would appear that many companies are starting to ask where the promised benefits are from the magic wands of technology buzzword bingo and they are seeking to shift from a purely technology for technology’s sake perspective, with more than a few putting the brakes on digital transformation initiatives. With the rise in interest in this new role and perspective, though, companies still seem a bit confused about their forward direction. As such, there are still a lot of these roles (and other similar senior roles) that are being put ‘on hold’ as boards and senior executives look to better understand the lack of expected ROI from digital transformation initiatives and circle the wagons, so to speak, to evaluate their strategic direction and business objectives, particularly in the trying financial times being experienced all around the world.
This situation potentially begs for some further refined clarity around both business and digital transformation. Let’s start with examining some digital terminology, leading to, hopefully, getting a clearer picture of what Digital Transformation means for businesses.
The word “digital” has somewhat morphed in more recent times and is largely viewed as somewhat ambiguous and, often, seen as just a new term for “technology” in general. The Cambridge Dictionary defines digital with two meanings:
- “Recording or storing information as a series of the numbers 1 and 0, to show that a signal is present or absent”
- “Using or relating to digital signals and computer technology”
Both of these terms are along the lines of the more traditional definition of the word.
The Oxford Dictionary, on the other hand, has the following definition:
- “Of technologies, media, etc.: involving digital data; making use of digital computers or devices. Also: of or relating to such technologies or media”
This definition more aligns with the emerging concept of the word.
It is interesting to note the difference in definitions from two of the world’s top universities, which highlights the ambiguity.
The word “digitisation” or “digitise”, unlike “digital”, sees a much more synonymous definition from both of these universities:
- Cambridge Dictionary – “To put information into the form of a series of the numbers 0 and 1, usually so that it can be understood and used by a computer”
- Oxford Dictionary – “The action or process of digitizing; the conversion of analogue data (esp. in later use images, video, and text) into digital form”
The word “digitalisation” sees both the Cambridge and Oxford Dictionaries refer to the definition of “digitisation.”
A common definition by various people on LinkedIn, such as the below definition by Paul Meredith, though, states:
- “Digitalisation is about how consumers interact with businesses. It involves moving away from analogue technologies such as paper mail and phone calls, to digital ones such as Zoom, social media, and so on”
It seems similar to “digitisation” but there is a subtle difference, much like the often misunderstood difference between the words “affect” and “effect”. Paul’s definition would seem to indicate that digitalisation is, perhaps, more about usage post-digitisation, rather than the actual process of digitisation.
Do these definitions help us to understand what “digital transformation” is, though? Let’s look at breaking this term up into its constituent words. We’ve already covered “digital” so, with respect to the word “transformation”, again both the Cambridge and Oxford Dictionaries have very similar definitions:
- Cambridge Dictionary – “A complete change in the appearance or character of something or someone, especially so that that thing or person is improved:”
- Oxford Dictionary – “The action of changing in form, shape, or appearance; metamorphosis.”
Staying clear of the word “digital” for the moment and extrapolating “transformation” to business, I asked a colleague of mine, Tom Saunders (a very respected and very experienced and accomplished senior specialist in the technology world), what his definition of “transformation” was in this context. He responded that transformation in business, digital or otherwise, is, essentially, a process that results in a change in operating model.
Summary – What Exactly is Digital Transformation?
Extrapolating on all of this further and bringing it all together, I believe that this makes “digital transformation” a subset of “business transformation”, incorporating “digitisation” and/or “digitalisation” i.e. the use of technology to support business transformation (and improvement), with the objective of a change in operating model, in the pursuit and support of business/board strategy and objectives.
The key here is, as anyone who has spoken to me knows, one of my mantras – “why more than what/how”. Many see digital transformation as the implementation of, essentially, technology upgrades or consolidation/integration of various technology-based systems, in what is predominantly a technology for technology’s sake approach, which sees many companies asking questions like “After spending all this money, what does this new system do that our old one didn’t – how does it help us achieve our business objectives?”
Before embarking upon a “digital transformation”, first ensure that your board and senior executive have a clear – and consistent – definition of business strategy and objectives. With this, you can then ask yourself a few very important questions, that are fundamental in achieving ‘successful’ digital transformation:
- Why are we considering this initiative?
- What is the [comprehensive] Return On Investment analysis from this initiative – considering not just implementation costs but ongoing support and maintenance costs?
- What are the organisational (and potentially target market) cultural challenges that may provide hurdles to a successful implementation of this initiative? For example:
- Does the system(s) involved support our business processes or might they require further, and costly, customisation?
- Will adequate business input be sought in defining the scope?
- Is the business being brought along on the journey, with appropriate advanced information, training, and clear benefits to how they go about their daily tasks?
- Does the change in operating model align with the culture of our [new or existing] target market(s)?
- Does this initiative fulfill at least one of the principal business growth objectives of:
- Increasing profit
- Increasing sales
- Reducing operating costs
- Attracting new customers
- Retaining existing customers
- Establishing a USP
In conclusion, “Digital Transformation” is utilising technology to support and drive board/business objectives and results in a change in an operating model(s). When undertaking any transformation, though, (digital or otherwise) ask the all-important question “Why” and if it doesn’t result in a change in the operating model, is the label “transformation” the correct description?