A term that seems to have taken increased prominence over the last decade or so is digital transformation. It has become such a frequently used part of the organisational lexicon that it is rarely questioned. It’s a term that is accepted, it sounds like something that is self-explanatory and somehow obvious. I mean who doesn’t want a digital transformation? In the next breath there will be the inevitable cliches of Blockbuster, Netflix, Uber and others (cliches, by the way, that I am just as guilty as anyone as using…).
Within the business analysis community I hear a lot of discussions about how to work within a digital transformation programme, whether the tools and techniques are different to “other” types of initiative. I occasionally hear debates about whether there should be a “Digital BA” role. These are sensible questions for us to ask ourselves—but shouldn’t we start by asking what does digital transformation actually mean anyway?
Far be it from me to reinvent the wheel. A bit of research will uncover scores of books and papers about this topic, here are two definitions that I find particularly interesting.
“…involves the usage of new technologies to drive significant improvements […]. This includes capitalizing on new opportunities as well as effectively transforming existing businesses and technology that enable them.”
— Anup MaheshwariMaheshwari, A., 2019 “Digital Transformation”, Wiley
“…encompasses the profound changes taking place in society and industries through the use of digital technologies. At the organizational level, it has been argued that firms must find ways to innovate with these technologies“
—Gregory VialVial, G., 2019 “Understanding digital transformation: A review and a research agenda” in Journal of Strategic Information Systems
Now, it’s hard to argue with either of these. Yet, haven’t practically all projects that involve information technology in the last 40 years met these definitions? Here are some (deliberately provocative) examples:
- Banks providing automated teller machines (ATMs)
- Electricity companies moving from manual records to batch processing with punch cards and stored data on magnetic tape
- Banks offering automated services via touch-tone phones (in the 1990s)
- The online services provider Compuserve offering FTP and Gopher access (this actually happened, look it up, it’s fascinating)
- Shops implementing electronic point of sale (EPOS) systems so they can better track stock and predict demand
- Just about every project you (or I) have ever done that have seized an opportunity (or protected against a threat) by using technology
I know, I know, there are projects that deal with entirely manual information systems. Yes, there are industries that still (sometimes for good reason) have stacks of paper files or where there’s little technology at all. But in our worlds as BAs, in my experience it’s normal to have at least some technology as part of the future state.It might not be sexy, it might not be Netflix or Uber, but pretty much everything we do has an element of ‘digital’, surely? So why the excitement over ‘digital transformation’, and the suggestion (from some) that it is somehow new and more important? Or are there really people working on purely ‘analogue’ projects, writing their documents on a typewriter and making edits with correction fluid?
The Emperor Has No Clothes!
I’m being deliberately facetious of course. In practice, I find that at least some organisations use the term digital transformation to mean “moving the boundary of automation closer to the customer” often combined with “changing the business model”, and this last part is often more important than it appears. Let’s be honest, the often-cited examples like Netflix and AirBnB were just as much about business model innovation as they were about technical innovation. Imagine if Netflix had reused Blockbuster’s business model (You can rent any film for £3.99 per night!) rather than a subscription based model…. History would likely have been very different.
And of course if the automation boundary is moving closer to the customer (for example, customer self-service), then user experience, customer experience design and similar topics are important. But is this really anything new? Surely whoever designed the first ATM had to make sure people could actually use it? It’s important, but is it new?
So, as in the classic Hans Christian Andersen story of “The Emperor’s New Clothes”, with ‘digital transformation’ I think the emperor really is naked! There’s nothing fundamentally new or different about how they need to be approached. That’s not to say projects have always been approached in the right way in the past. As with so many things context is what matters, there’s no ‘one size fits all’ approach and (in my view) there never has been.
It Reinforces The Strategic View, Innovation & Customer Insight
However, some things have changed:
- Speed of technological change
- Ability for new entrants to disrupt (some) industries
- Societal fashions, trends and expectations
What this highlights is the need for the strategic business analysis before, and throughout change initiatives. Scanning the external environment, using techniques such as STEEPLE (and others) to understand what is coming and how the organisation and the specific initiative might respond. It also highlights the need for innovative thinking, re-designing work and really understanding customers, users and beneficiaries of the services we define.
Plus of course stakeholder engagement. And perhaps a question we should ask of our stakeholders is:
“When you say digital transformation, what type of digital transformation is that?”
What are your views? Please add a comment below, and let’s keep the conversation flowing!
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About the author:
Adrian Reed is Principal Consultant at Blackmetric Business Solutions, an organisation that offers Business Analysis consulting and training solutions. Adrian is a keen advocate of the analysis profession, and is constantly looking for ways of promoting the value that good analysis can bring.
To find out more about the training and consulting services offered at Blackmetric, please visit www.blackmetric.com
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