Digital transformation: you’re doing it all wrong

The term ‘digital transformation’ has become so overused that it is descending into cliché territory
Boasting about going digital is akin to being proud that the office has light bulbs instead of candles

Michael Bruck

Published: 9:00am, 3 Apr 2021

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The term “digital transformation” has become so overused that it is descending into cliché territory. First coined to highlight the need for companies and organisations to fully embrace technology, it has since become an umbrella term so broad it could mean almost anything.

Faced with increasing challenges from digital-first start-ups, traditional companies are finally realising that they can no longer rely on fax machines. Many firms seem to think that digital transformation is a type of fairy dust: sprinkle some around the office and poof, your company is now ready to face this new world of “innovation”.

Digital transformation, however, is not that at all. What it provides is the critical infrastructure, like electricity and running water, to enable the pursuit of innovative ideas and practices.

Any company that has not adopted digital technology throughout its organisation and still relies on paper is a dinosaur. Boasting about going digital is akin to being proud that the office has light bulbs instead of candles.

When new technologies emerge, these usually create a digital doppelgänger of existing analogue products or services. Photo: Shutterstock

As the late Clayton Christensen, a former professor at the Harvard Business School and the first to explain disruption, once said: “Disruptive technology should be framed as a marketing challenge, not a technological one.”

Intel Corp, where I formerly worked, is a case in point. The company’s biggest innovations weren’t just in technology, but also in marketing. It simultaneously created the hugely successful “Intel Inside” branding campaign, while also building a dominant ecosystem around its x86 computer architecture.

When new technologies emerge, these usually create a digital doppelgänger of existing analogue products or services. The real innovation comes later. Think of the early days of the internet, which was a publishing platform to provide corporate brochureware through websites. One of the big innovations that came after is e-commerce.

The second wave of technological innovation occurs when the unique attributes of the new systems are used to address previously unaddressed, maybe even previously unacknowledged, business and marketing challenges. Think smartphones, the first-generation models of which were pocket-sized devices for web surfing. Through companies like Uber Technologies, which used smartphones’ Global Positioning System capabilities, entirely new categories of apps – including location-based services – have sprouted into their own idiosyncratic ecosystems.

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The path to transformative success lies in finding and understanding market-specific customer requirements.

Around the world, for example, there are millions of people who remain underbanked or unbanked. Emerging start-ups are using alternative data analysis to find and serve them

Dozens of virtual banks are emerging across much of Asia. Their key insight: people don’t want to go to a bank branch and wait in line. By offering the same basic services of a traditional high-street bank, virtual banks can cut oppressive charges, cost-ineffective physical branches and legacy information technology infrastructure to offer innovative solutions to their customers.

Transformation lies in how hitherto unknown or unobserved information is put to use for the benefit of both the provider and the end-user. It is in the balance of those benefits that the secret to lasting success can be found.

Applying digital technology to transform industries and dream up creative solutions for customer problems require fresh ways of thinking. To be truly innovative, we need to think bigger and better about digital transformation.