One of the most mentioned concepts in recent years in the field of business and technology is perhaps that of digital transformation. With the COVID-19 pandemic, this term has been widely used and disseminated in webinars, courses, certifications, master’s degrees and all kinds of academic and business meetings.
The McKinsey Global Survey of executives* conducted in July 2020 during the onset of the pandemic confirmed that when consumers turned massively to digital channels to acquire all kinds of products and services, companies responded to this pressing need in a decisive manner. McKinsey found that on average, companies had accelerated the digitization processes of their services or products by 7 years. This means that without Covid-19, many of the digital offerings we have in the market today would have taken 7 years longer to develop than if nothing extraordinary had happened. Most of the executives surveyed agree that the changes brought about by the pandemic in business dynamics from digital are here to stay.
Some important definitions
In order to understand what digital transformation is, I would first like to clarify two terms that are usually confused or interchanged in an unsuspecting manner: digitalization and technological appropriation.
Digitization is nothing more than converting analog information, i.e. physical, into ones and zeros that are the basis of the binary language used by computers. Once digitized this information can be stored, transmitted and reproduced by digital devices. An example of digitization in the music industry is the change from the immortal vinyl records or magnetic tape cassettes to CDs and later to MP3 files that can be downloaded or played in real time on streaming platforms. We can find numerous examples of digitization in industries such as entertainment with VHS to DVD and streaming video and the traditional paper files found in offices around the world converted to digital files.
Technological appropriation , on the other hand, refers to the use of available technology to be used in a specific or transversal process of a company. This is the case of the implementation of a CRM (customer relationship management software) in a company to manage its commercial process, or the use of a payroll platform to optimize human resources processes.
The question that arises next is: “If I have digitized information in my company or I have just bought the latest ERP (enterprise resource planning system) on the market, am I carrying out a digital transformation process in my company?” The answer is NOT necessarily….
Digital Transformation
There are many definitions that can be found when searching on the subject in various sources of information. And there is no single truth written on a golden tablet descended from the heavens. In my constant research on the subject I have found several very accurate definitions, from my point of view one of the most concise and clear is that of Mark Benioff the Chairman and CO-CEO, of SalesForce, one of the most innovative technology companies in Silicon Valley. “Digital transformation is the process of using digital technologies to create new business models, culture and customer experiences, or modify existing ones, to meet changing business and market requirements. This reinvention of business in the digital age is digital transformation.”
Digital transformation, then, is the use of existing technologies to improve the user experience (external or internal) through the digitization of products, services, processes and/or business models.
When a company decides to initiate a digital transformation process, it must be very clear about the following aspects:
- The strategic and business vision of the company and its corporate culture.
- The user or users to be impacted
- The initial definition and scope of the product, service or process to be transformed.
- The people involved in the process both developers and internal users in terms of their culture and skills.
- Project leadership
- The allocated budget
- Performance indicators or KPI’s to measure the progress and results of the process.
At Focux Digital, we specialize in Digital Transformation and strategic design and management of omnichannel digital ecosystems, we use technology and digital strategy based on data to generate more business opportunities through digital channels for our clients. We impact marketing, sales and customer service processes through the digitization and automation of interaction processes with our clients’ users.
In a future article we will see how products, services and processes can be digitally transformed, and how this generates digital ecosystems that allow the creation of new business models.
