Many boards of directors and senior management teams aspire to the efficiencies, innovation, and competitiveness that digital transformation might deliver. But in my experience, the path to transformation — like most major corporate initiatives — is a risky one.
I have spent much of my career overseeing and participating in digital transformations in both government and private sector settings. Specifically, I have served as the director of the Cybernetics Technology Office of the U.S. Defense Advanced Research Projects Agency (DARPA); as CTO and senior VP of Safeguard Scientifics Inc.; and as CTO and senior vice president for technology strategy at Cigna Corp. And I have observed that in the vast majority of cases organizations will make significant mistakes — unless the transformation is well-planned, exquisitely executed, and enthusiastically sponsored by upper management.
Villanova University — where I now teach and direct research about digital transformation and emerging technologies — collects data about technology adoption and digital transformation trends. I’m constantly hearing about the “amazing,” “fabulous,” “terrific,” and “incredible” projects under way with the potential to “revolutionize” companies and “disrupt” whole industries. But when I probe survey respondents for key details about their initiatives, I often find that there is still confusion about the process. To replace this confusion with some clarity, I have distilled my observations and experiences into five myths about digital transformation — each of which has a corresponding reality. If you understand these myths, you’ll be less likely to fall prey to the hype about digital transformation and be more aware of how arduous the process really is.
Myth #1: Every company should digitally transform.
Reality: Not every company, process, or business model requires digital transformation.
Digital transformation is not a software upgrade or a supply chain improvement project. It’s a planned digital shock to what may be a reasonably functioning system. For example, to launch a digital transformation of business processes, it’s necessary to purposefully model those processes with tools that enable creative, empirical simulations. Think, for example, of the software programs that enable business process modeling and business simulations.
So, as a first step to digitally transforming your processes, you need to honestly assess if your company can create digital models that simulate the nuances inherent in its procedures. Simply put, the question is this: Can my company model its existing processes? Many companies cannot. That’s no crime.