Digital Transformation
What is it
Many people often confuse Digital Transformation with Digitisation but they are not the same.
Digital Transformation is the business change process an organisation goes through as a response to the accelerated pace of technological changes and disruptions that directly affect its business operations and/or the expectations of its customers.
Digital Transformation is about business change and not about deploying or implementing specific technologies. It is essential for an organisation’s survival in the current 4th Industrial Revolution by ensuring it becomes an agile organisation that can quickly respond to change and remain competitive, innovative, and successful.
Why is it important
Many organisations either fail to identify and understand the technological changes and disruptions that will affect them early enough to respond, or they fail to respond successfully. A great example is that of Kodak vs Fujifilm. Both were powerhouse companies in the photographic film industry. With the advent of digital cameras and smartphones, the camera film business came under threat. The responses from the two companies were vastly different.
Kodak failed to anticipate the pace of change in the digital photography space and the commoditisation of digital cameras, and eventually filed for bankruptcy.
Fujifilm on the other hand realised that they were not a just a photographic film manufacturer, but a photosensitive chemical product manufacturer. This realisation allowed Fujifilm to pivot as a company to the cosmetics industry. This was their Digital Transformation.
In 2021 Kodak’s revenues were $1.15Bn and Fujifilm’s were $20.61Bn.
What does it look like
Digital Transformation is a journey and not a transaction. It affects all parts and all members of an organisation and is an iterative process, not a one-off activity. In order to be successful, it must be a strategic priority with support from the very top of the organisation.
Similar to other challenges, the first step in this journey is to understand what the challenge actually is and how it affects the business. This is extremely critical and as seen in the Kodak vs. Fujifilm example above, it will directly affect the outcome of the Digital Transformation efforts. Once this has been established and understood by the business, it can start to iteratively identify and transform the processes, practices and tools that will be part of its Digital Transformation.
How do we do it
icognium uses a structured approach to help organisations in their Digital Transformation journey, leveraging Agile methodologies to create the maximum value possible for our clients. The diagram is a high level illustration of our approach.
Educate – This is the first step in the Digital Transformation journey where we help our clients gain a clear understanding of what Digital Transformation is and what is means to them, how they as an organisation are affected by the accelerated changes in technology and customer expectations.
Following the “Educate” phase, we run iterations, or cycles, of the four (4) main Transformation phases.
- Evaluate – In this phase we evaluate the client’s Digital Capability across three (3) Pillars and fourteen (14) Focus Areas. The evaluation produces a numeric score that is in the range of 0-10 for each Focus Area and overall Digital Capability Score in the range 0-140.
- Identify – Using the assessed scores form the “Evaluate” phase, we work with the client to identify high level business changes that if implemented would improve the score of each Focus Area. We then work together to prioritise the identified business changes to implement, taking into consideration other factors such as the time required for each change, the cost to implement it and the value it will add to the organisation.
- Design – Once we have identified the business changes to implement, we create a design for the implementation of that change including success criteria and associated OKRs (Objectives and Key Results).
- Implement – Once a change has been designed, it is implemented and its outcome measured to determine/ensure success.
By running iterations of the above phases, we are able to continuously re-evaluate the needs of the organisation and adjust our efforts accordingly.