Digital Transformation is Here, Ready or Not
10/07/2020 by David Septoff
Digital transformation (DX) may feel like a new concept, but it’s not. Remember vinyl records? Many years ago, we went to brick and mortar shops and searched through stacks of records to find the perfect one. Then we paid with cash, took a record home and played it on a turntable.
The transition from vinyl to CD to streaming is digitization. The way music is recorded, paid for, distributed, and listened to is a digital transformation disruption!
Salesforce defines DX as:
“… the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements.”
File sharing and ultimately music sold online replaced brick and mortar stores. Music went into the cloud. We pay for it with digital apps and stream all our favorite songs.
The music business was an early form of digital transformation that, from the outside, didn’t appear to be planned but more driven by new technologies applied by grassroots innovators and a consumer base that embraced them. Once new file sharing technologies became commonplace, the industry was disrupted, and there was no turning back no matter how many laws were broken or lawsuits filed.
The music industry was forced to change, and change fast rather than having a well-thought-out plan to change. It was going to work out … or what? No more music? Of course not, but that doesn’t mean it was easy, and 20+ years later you can expand this discussion to all types of media. You’d think all the kinks would be worked out by now, but look at the controversy today in the entertainment industry where movies are releasing to streaming services before theaters. Nobody envisioned a scenario where we couldn’t go to theaters, but here we are. Movies will continue to be made, and there will be a way to watch them. It just may not look like what you — or even industry experts — would expect.
What we should all learn from the music industry, or media, is that DX is going to happen and is happening to all industries, ready or not.
The music digital transformation didn’t happen overnight and neither will other industries. But the changes will come at varying speeds, and the reason is simple. DX is happening because of demand; DX creates opportunity, and it creates value.
The World Economic Forum expects transformation to generate US$3.7 trillion in value across all industries globally by 2025 with the rise of new products, services, and technologies.
What if someone came up to you and said, “We can streamline your processes, collect more data to make better and quicker decisions, gain a competitive edge, and increase profit”? What would you be thinking in response? That sounds like a lot of value — if it can be done.
When DX is attempted by companies with existing systems and hardware, it’s clear that DX is as much about leadership and change management as it is about technology. Like all major change projects, senior management must believe in it and must not just manage but lead the way through communication and actions. And don’t forget about your employees. A 2019 Forbes articles states that 70% of digital transformations fail, most often due to resistance from employees.
So make sure to get buy-in at all levels of the organization. Technology won’t get it done alone. DX requires a change of culture and a controlled change is almost always better than a forced change.
A recent study of executives showed that 87% of companies think DX will disrupt their industry, but only 44% are prepared, and 27% of senior executives rate DX as now being ‘a matter of survival.’ Of companies that haven’t started a digital transformation, 59% fear it might be too late.
That’s a staggering statistic, and if they don’t start to change, it will be a self-fulfilling. Many of those business will ultimately fail because they simply didn’t adapt to the changes in their business world.
So take clear and decisive action. Start today!
Only 15% of businesses said their employees had the necessary skills to plan and implement their digital transformation. Like any large transformational project, it is very difficult for any single company to undertake a project like this by themselves. Success with DX requires a change in culture and mindset. It simply can’t be done without the right people and trusted partners.
A recent white paper written by Zencos COO Fritz Lehman states:
“But with digital transformation an ongoing hot topic, companies are right to be suspicious of unprincipled consulting firms that are more committed to establishing a long-term and potentially lucrative relationship than delivering the sustainable transformation you need.
The right partner will work with you on designing a plan tailored to your goals.”
Invest in the training and tools for your employees and do your homework to get the right partner that works with you and fits into your culture.
Digital transformation is happening and happening very quickly in every aspect of society. New businesses without decades of history are likely to be ahead of the game because they may have been digital when they started. Businesses that have been around for decades may have a lot more work to do, but they have to make progress if they want to continue to exist.
Look around at the extremely successful businesses that are thriving in today’s pandemic world, and you are likely seeing businesses that have gone through a digital transformation. It’s happening today in your business or industry, whether you’re ready or not.
Now it’s time for me to stop writing. I’m off to put on my vintage vinyl copy of Alive!