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Learn About Digital Transformation

Learning Objectives

After completing this unit, you’ll be able to:

  • Identify factors common to digital transformation projects.
  • Describe a real-world example of digital transformation.

The Fourth Industrial Revolution

We are in the midst of significant changes in technology, industry, and day-to-day life. The speed, breadth and depth, and systems impact of change are so transformative that we describe this time as the Fourth Industrial Revolution. It’s likely that you’ve experienced some of these transformations firsthand, in your own life. You may have noticed how the photo app on your phone recognizes and categorizes the people in your pictures. Or perhaps you have a digital assistant device in your home that can turn on the lights, order groceries, or tell you the day’s weather. 

The rate and magnitude of change is affecting our world in profound ways. Innovations in mobile technology, the Internet of Things (IoT), and robotics are reshaping consumer behavior and business trends. They’re affecting people’s work and social relationships. Organizations that are looking to the future have acknowledged this and are trying to adapt to stay relevant and drive growth. 

What Is Digital Transformation?

Advances in robotics, artificial intelligence, and IoT give organizations an opportunity to accomplish good things. Digital transformation is about embracing that opportunity. 

There are three key characteristics that nearly all digital transformation projects share. 

Design First

Should your TV’s remote control be as easy and intuitive to use as your phone? A lot of companies think so, and they are designing products and solutions that delight people in just this way. Often called design thinking, this approach prioritizes empathy for the end users of a product or service. 

Rapid experimentation and iteration close the loop in this continuous process. Traditionally, when leaders thought about the future of their business and drew up strategies, they analyzed industry trends or ran competitive analyses. But looking at trends or the competition limits the discussion of what’s possible. It demonstrates why many companies fail to foresee the disruptive innovations of technology. 

If you’re a design-first company, you’re thinking about your users first and not worrying so much about your competitors. When you use design thinking to solve business problems, you have a powerful set of tools to solve ambiguous problems that don’t have straightforward answers. When you shift to this human-centered approach, it becomes clear that improving users’ experiences is an ideal foundational principle. From advertising to medicine, if we can deliver a personalized experience to each customer, outcomes are better compared to those of a standardized delivery. 

If you’re just beginning to explore digital transformation, start by thinking about how your decision-making process can improve when you have better insights into the behaviors and needs of your customers, employees, and partners. What frustrates them when they’re doing business with you? How can you deliver more useful products and services? 

The companies that approach their user experiences with an empathetic mindset and a willingness to implement more customizable solutions are the ones that succeed in the Fourth Industrial Revolution. A well-known athletic brand is doing this today. By connecting with its customers across channels beyond just its website, the brand has been able to increase ecommerce sales by 66%. 

Culture

Often when people start to think about digital transformation, they assume that once they invest in new technologies, their work is done. However, as anyone who has experienced these big, transformative projects can tell you, if you don’t address the change management side of things, that’s a recipe for failure. Tony Colon says it best in this article in Forbes :

One of the biggest issues I see is the assumption that ‘there’s an app for that’—a concept that gets a lot of play in executive heads today as a quick fix. And while in many cases an app does exist to fix a specific business problem, the issue runs a lot deeper. Technology clearly makes it easier to execute on key business strategies. But while technology is a key component of a digital transformation, it’s not the only component. Just implementing technology doesn’t solve your business issue.

Without a change in the way people work and behave, the technology falls flat. In other words, without actively fostering digital cultural characteristics, such as customer centricity, responsiveness or breaking down the silos that traditionally exist between business and IT, digital transformation efforts flounder. There’s a reason that development and delivery don’t solve the problem—when your employees don’t work with the technology to support its strategic intent, your project can fail and fail fast.

So, be sure to cultivate a culture that embraces change and addresses head-on the experience of the people who are implementing the changes and the users on the receiving end.

Speed and Agility

If there’s one thing that distinguishes the Fourth Industrial Revolution from the prior three industrial revolutions, it’s the rate of change and innovation. It took over a hundred years for the steam-powered revolution to transform society from farm-centered to factory-centered. Now think about the impact of mobile phones and how they have transformed our society. That happened in just over 10 years. Some of the world’s largest and most valuable companies didn’t even exist 25 years ago. 

The pace of change feels normal. We have all grown accustomed to the rapid march of technological innovation. That presents both a challenge and an opportunity for organizations that are transforming. 

When Salesforce works with companies that are interested in digital transformation, we find that they are nearly always interested in becoming more agile and increasing their ability to innovate. Salesforce has been widely recognized as one of the most innovative companies in the world. Our agile structures, methods, and practices help us innovate, and we also empower our employees with an agile mindset. Our company culture encourages honest feedback from all of our stakeholders. Our ability to act rapidly on that feedback makes our products better and our company stronger. This is a key point that many companies that we work with haven’t realized yet: Being agile isn’t just about more frequent product releases. It also means rethinking your operational structure, so you can be more responsive to your stakeholders’ needs.

What Does Digital Transformation Look Like?

So far, we’ve discussed general concepts of digital transformation.  But what do design thinking and increasing the pace of innovation look like in practice? Let’s briefly check out two real-world examples.

Toyota Financial Services

Toyota Financial Services, a trailblazer in vehicle finance, is rethinking the entire process from the borrower’s perspective. Toyota has consolidated multiple systems into a single application for its call center agents, significantly improving customer experience. The company is seeing significant improvements in customer and agent satisfaction.

University of Texas

The University of Texas is becoming more student-focused, offering a variety of learning options that are more flexible than traditional undergraduate and graduate degree programs. The university is rethinking the online résumé and inventing new ways for students to share their accomplishments with potential employers. In doing so, the school is creating an entirely new marketplace to connect people in the workplace.

Resources