Learn About Digital Transformation
After completing this unit, you’ll be able to:
- Identify factors common to digital transformation projects.
- Describe a real-world example of digital transformation.
Have you learned about the Fourth Industrial Revolution? If not, it’s worth spending a little time digging into the subject. We are in the midst of significant changes in technology, industry, and day-to-day life. Maybe you’ve noticed how the photo app on your phone now automatically recognizes and categorizes the people in your pictures. Or perhaps you have one of those digital assistant devices in your home that can turn on the lights, order a pizza, or even tell you a joke.
The rate and magnitude of the changes underway are already 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.
Digital transformation has been the subject of many articles by some great minds. But nearly all of them rely on jargon like digital IQ and architecting for agility. What does it all really mean? Let’s figure out what all the hype is about—sans buzzwords.
The simplest way to think about digital transformation is in the form of a question: What are you doing to embrace the Fourth Industrial Revolution? Companies, governments, and nonprofits all have the power to accomplish good things with the advances in robotics, artificial intelligence, and IoT. What can you do to embrace those innovations? Digital transformation is all about figuring that out.
There are three key characteristics that nearly all digital transformation projects share.
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 toward 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 that 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%.
Often when people start to think about digital transformation, they assume that once they invest in snazzy new technologies, their customers and employees will just “get it.” However, as anyone with experience working on 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, the Salesforce Success Cloud leader and an expert on the subject of digital transformation, 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 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.
If there’s one thing that distinguishes the Fourth Industrial Revolution from the prior three, 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.
And it just 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 increasing their ability to innovate and becoming more agile. We’ve been widely recognized as one of the most innovative companies in the world, and it has a lot to do with our agile structures, methods, and practices, in addition to empowering our employees with an agile mindset. Our company culture encourages honest feedback from all of our stakeholders, and our ability to rapidly act 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 the operational backbone to allow you to be more responsive to your stakeholders’ needs.
So far, we’ve discussed some general concepts of digital transformation in an abstract sense. It’s great to talk about concepts like design thinking and increasing the pace of innovation, but what does that look like in practice? Let’s briefly check out two real-world examples.
Toyota Financial Services is a trailblazer in vehicle finance and 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, and the company is seeing significant improvements in customer and agent satisfaction.
The University of Texas is becoming more student focused and is offering a variety of learning options that are more flexible than the 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.
- What is Digital Transformation? (Salesforce.com website)
- What Is the Fourth Industrial Revolution? (World Economic Forum article)
- Understanding What It Really Means to Be “Customer Obsessed” (Salesforce blog post)
- Creating A Culture Of Digital Transformation (article, Forbes magazine)
- 16 real-world digital transformation success stories (article, CIO magazine)
- Is your business prepared for digital transformation? (article, Information Age magazine)
- What is design thinking? The secret to digital success (article, CIO magazine)