It’s all about digital transformation

Last month I read an article Mckinsey & Co. published titled “What is digital transformation?” and instantly I realized this could have multiple meanings depending on the industry looking for a digital transformation. However, even more surprising are the answers you get when you search for digital transformation. Results showed:

• Discover key stages, resources, & tasks for effective digital transformation strategies…63% of leading organizations report increased funding for digital transformation.
• Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.
• Digital transformation is using digital technologies to create new – or modify existing – business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.
• Digital transformation is the process by which companies embed technologies across their businesses to drive fundamental change. The benefits? Increased efficiency, greater business agility and, ultimately, the unlocking of new value for employees, customers, and shareholders.

McKinsey & Co.’s article stated it similarly, “Digital transformation is the rewiring of an organization, with the goal of creating value by continuously deploying tech at scale.” And all results returned focused on incorporation of nerd-like terminologies Michael Ford, author of this month’s cover story, refers to as, “digital this, AI [artificial intelligence] that.”

However, the key to successful digital transformation, according to McKinsey’s article, which is based on a new book Rewired: A McKinsey Guide to Outcompeting in the Age of Digital & AI, requires six capabilities for success:

• The ability to craft a clear strategy focused on business value
• A strong talent bench with in-house engineers
• An operating model that can scale
• Distributed technology
• Access to data that teams can use as needed
• Strong adoption and change management

McKinsey authors explain AI’s role in a digital transformation, but note that while AI, particularly generative AI, is upending how companies operate and build value….it can be easy to get distracted by shiny new toys. They state, “The lessons of past technology innovations still apply: value comes from having a clear understanding of business goals and how technology can help meet them. It’s important to experiment and learn rapidly, but it’s also critical to resist the temptation to develop use cases with exciting new technology that doesn’t end up creating value for the business.”

It’s the same insight Ford offers in this month’s cover story, “During your important and inevitable digital transformation, don’t follow the buzzwords blindly with solutions hoping to be a step toward some benefit. Stick to your principles and let the value do the talking.”

What do you think digital transformation is all about?