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George Westerman is a principal research scientist with the MIT Sloan Initiative on the Digital Economy and coauthor of the award-winning book Leading Digital: Turning Technology Into Business Transformation, published by Harvard Business Review Press in 2014. He tweets @gwesterman.
It seems that the whole business world is talking about digital transformation these days. Just look at the search trends for the term:
Searches for "Digital Transformation" on Google
Source: Google Trends
But while more people are talking more about digital transformation, it's pretty clear that most are missing the point.
As sexy as it is to speculate about new technologies such as AI, robots, and the internet of things (IoT), the focus on technology can steer the conversation in a dangerous direction. Because when it comes to digital transformation, digital is not the answer.Transformation is.
Technology doesn't provide value to a business. It never has (except for technology in products). Instead, technology's value comes from doing business differently because technology makes it possible. E-commerce is not about the internet - it's about selling differently. Analytics is not about databases and machine language algorithms - it's about understanding customers better, or optimizing maintenance processes, or helping doctors diagnose cancer more accurately. IoT is not about RFID tags - it's about radically synchronizing operations or changing business models.
In the digital world, a strategic focus on digital sends the wrong message. Creating a "digital strategy" can focus the organization in ways that don't capture the true value of digital transformation. You don't need a digital strategy. You need a better strategy, enabled by digital.
Better Strategy, Enabled by Digital: Real-World Examples
This idea of focusing on transformation instead of technology extends to industries ranging from food to mining. Here are some industry-specific examples of what I mean:
?¢ In the paint industry, Asian Paints Ltd. transformed itself from a maker of coatings in 13 regions of India to a provider of coatings, painting services, design services, and home renovations in 17 countries. The technology the company's leaders used wasn't rocket science. The organization's transformation was powered by Enterprise Resource Planning...