Five Myths About Digital Transformation

If you want to lead your organization’s technology transition, the first step is grasping the realities of digital transformation — rather than getting seduced by the hype.

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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.



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Comments (6)
Yuliia Soroka
In the era of digital technologies, we cannot imagine a successful company that does not keep up with modern technological trends. Have you ever wondered how to make your business more effective? Are you interested in technological innovations? If so, digital transformation is a solution for your business.

According to recent research, over 39% of companies worldwide include digitalization in their business strategy. However, there are many myths about the digital transformation which can confuse someone who is considering this improvement. Don’t worry, though! Having extensive experience in this sphere, we are here to dispel seven popular myths related to digital transformation.

Perhaps here you will find an addition to what has already been said -
Kirk Counard
The article only hinted to the definition of digital technology. What is your Digital Transformation definition or more accurately, what is the expected outcome?
For me digital transformation started in the 70’s with the introduction and adoption of the ATM where you could bank 7/24/365. The purpose of the machine, from the bank’s perspective, was to remove the expense of human-to-human interaction.
John McAuliffe
Good article. It offers a pragmatic view on DT. I agree that timing is indeed everything - it can be hard to find the best balance of exploration v exploitation. For large organizations, it is a change program and without leadership 'buy in', it's importance will not compete with the urgent needs of the current revenue generation.
Could not agree more about the use of BPM:  first you model and then you improve.  Just modeling "as is" processes does not facilitate transformation.  We must then develop new processes that represent testable changes.  

I tried to note that "digital" transformation is the intersection of emerging and disruptive technologies and hypothetically improved business rules, processes and models -- which are then tested for impact.  I included the "buy in from top leaders" because of data that suggests that most DT projects fail precisely because they have limited executive support.  One idea that I think has real merit is that not all processes are broken and can therefore be improved via operational, emerging or potentially disruptive digital technology -- until one day when "successful" processes become obsolete.  In other words, DT requires timing.  

Thanks for the comments!
Nothing terribly insightful in this article - I'm afraid :(
In general most articles on Digital Transformation end up merely regurgitating mother-hood statements about any type of crisis induced Transformation ( buy in from top leaders etc )  - so what really is 'Digital' and what is unique in this type of Transformation.
Ken Moyle
If the simple threshold question is confined to "Can my company model its existing processes?" then the entire advantage of digital transformation is lost. Time and again, design teams limit their scope to automating current processes, rather than questioning them. The true "transformation" comes from recognizing that existing processes were designed, at least in part, based on the then-current limitations on available technology; and then redesigning them to take advantage of the advances that have occurred since they were put in place.