The more I study digital transformation, the more I realize that it’s not mostly about either “digital” or “transformation.”
1) Digital transformation is not about technology. A key misconception about digital transformation is that it is something that companies choose to do with technology or is primarily about their implementation and use of technology.
Instead, digital transformation is about how technology changes the conditions under which business is done, in ways that change the expectations of customers, partners, and employees.
For example, the rise of new disruptive businesses like Uber Technologies Inc. and Lyft Inc. resulted in large part from changes in the technological infrastructure that were not initiated by the company’s founders. Instead, these startups recognized that the widespread adoption of personal mobile devices equipped with certain features provided new opportunities to bring people together to exchange goods and services. They responded to these opportunities by developing novel services that catered to changing customer (and driver) expectations. The success of these platforms further changed business conditions, creating even more new opportunities. For instance, the New York-based restaurant technology company Mobo Systems Inc., doing business as Olo, is building upon the Uber platform to offer restaurant delivery that relies on Uber drivers as delivery people.
So, while Uber, Lyft, and Olo are certainly technology companies, at least in part, the more significant technological shifts that gave rise to their businesses were those over which they had little influence and took place before the companies were founded. Likewise, many of the most significant technological changes to the competitive environment your company faces lay outside your control, but they are created by a pervasive digital infrastructure that continues to evolve. The key question of digital transformation is whether you are paying close enough attention to these changes to respond to the resulting changes in expectations of customers, partners, and employees for how business is done — or whether a competitor or a startup will respond first?
2) Digital transformation is not about transformation. Looking up a number of definitions for the word “transformation” demonstrates that they exhibit a common characteristic — they all define transformation as a singular process that occurs and is then completed.
Digital transformation, however, does not work that way. It is not a process that will ever be complete, at least not in the near future.