Because of its importance, it’s a phrase that is increasingly in our orbits.
But I feel like digital transformation is, to some people, the Wizard of Oz – this grand, great mystery that intimidates everyone because they don’t know exactly what it is.
The reality is that digital transformation is in fact the Wizard of Oz, or at least the old guy behind the curtain, in the sense that it may mean different things to different companies, but in the end it will be a simple salvation that will carry you forward.
In the abstract, digital transformation is the intersection of aggregated data and technological advance that is, in effect, this era’s version of the industrial revolution.
If you Google “digital transformation,” it says it’s “the profound and accelerating transformation of business activities, processes, competencies, and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way.”
And I say: no wonder people don’t know how to define it.
So let’s take some real-world examples to give you a better idea of how some industries are digitally transforming, and hopefully that will give you a sense of what it means to different companies and different customers.
Automobile manufacturing used to be the work of assembly lines, people working side-by-side literally piecing together, painting, and churning out vehicles.
Much to the dismay of local unions, Detroit and others slowly made a transition to automation, reducing costs and marginalizing human error. That was a business transformation.
Now, we are seeing companies like Tesla and BMW incorporate technology into their vehicles that essentially make them computers on wheels. Cameras. Sensors. GPS. Self-driving vehicles. Syncing your smartphone with your car.
The one that astonished me: I was sitting with a colleague at a meeting recently when her Tesla texted her to tell her that, based on traffic, she needed to leave in five minutes to get to her next appointment on time. Incredible. I doubt Henry Ford ever predicted that the Model T would evolve into that.
This is a perfect example of digital transformation. Tesla has made the investment to take its automated assembly robots and allow them to not only put together cars, but to incorporate the most up-to-date technology in those cars. Moving forward, Tesla will then use the data collected from the technology in their cars to not only improve the next version of that vehicle, but to refine and reduce the cost of manufacturing.
The point here is that companies need to make the upfront investments in infrastructure to take advantage of digital transformation, and that upfront investment will pay dividends in the long run as technological innovations abound. It is our job to collaboratively work with our customers to understand what infrastructure changes need to be made to achieve and take advantage of digital transformation.
I’ll give you another example, just in case you don’t own a Tesla.
Electric companies. Remember a few years ago, when you used to go outside your house and see the little power meter spinning as it recorded the kilowatts you are using? (And like me, you thought, if only my kids would turn off the lights in their rooms, that thing would spin a little slower.) Monthly, the meter reader would show up in your yard, record your usage, and report back to the electric company.
Most electric companies then made a business transformation and installed smart meters – eliminating the cost of the meter reader and integrating most homes into a smart grid that gave customers access to their real-time information.
Now, as renewable energy evolves and integrates more fully in our lives, these same electric companies that switched over to smart meters are going to make additional investments to be able to analyze the data and make more informed decisions that will benefit both the company and the customers.
That is digital transformation.
Obviously, banks, healthcare, entertainment, trucking, and e-commerce all have different needs than auto manufacturers and electric companies. It is up to us – marketers and account managers promoting digital transformation – to identify those needs and help our clients make the digital transformation as seamlessly as possible.
How to do that? That’s a topic for another blog. But for now, let’s pull back the curtain on digital transformation and make it a little less intimidating.
Be what customers want you to be. Unlock Your Digital Super Powers: How Digitization Helps Companies Be Live Businesses.
Yellow brick road photo courtesy of Philip Samuels, St. Louis, Missouri/National Archives.