Last updated: What the heck is digital transformation? A real-talk definition

What the heck is digital transformation? A real-talk definition


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As a forty-something aging hipster, I try my best to stay current with pop-culture trends and memes. I wear super-skinny jeans to the office. My Twitter hashtag game is still #OnFleek. And I’ve mastered both the “Dabb” and the “Whip/Nae Nae” dances. But keeping up with CRM trends is not quite as easy! For example, these days in CRM it’s apparently chic to be “digital”…whatever that means.

If you talk to a group of executives, almost all of them will nod their heads proudly and profess to be undergoing some kind of digital transformation initiative.

But if you ask people what “digital transformation” means, suddenly everyone looks down in silence at their brogue oxfords (or flip flops, if you’re in Silicon Valley).

What is digital transformation: Definition in simple terms

“Digital transformation” is the latest cool buzzword replacing older, formerly-cool buzzwords like: “Web 2.0,” “Enterprise 2.0,” “Social Business,” “Social Enterprise,” and “Digital Enterprise.”

Essentially, the term “digital transformation” is often refers to any number of cool(ish), new(ish) technologies like: cloud computing, social media, mobility, smart connected devices, wearables, virtual reality, IoT (Internet of Things), etc.

However, if you ask me, the term “digital transformation” doesn’t make a lot of sense. Clock-radios from the 1980s were digital, weren’t they? So were fax machines. And pagers. And that old BlackBerry in the bottom desk drawer, sitting by the even older Palm Pilot. So why is “digital” suddenly being used a proxy for new and cool?

And what exactly are companies transforming with digital technologies anyway? Does retooling your company’s website to optimally run on mobile devices constitute a “digital transformation”?

If you hire an intern to create an Instagram page for your brand, have you suddenly joined the digital economy? Did you really transform your organization’s business processes, or did you merely add another social media channel so your team can send out the same old spam?

Digital transformation: Real-life examples

There are, however, some examples of companies that have succeeded at true digital transformation:

  1. Netflix, for example, was famously able to disrupt (and bankrupt) traditional brick-and-mortal video rental retailers like Blockbuster with the new paradigm of digital-video streaming. In fact, last I heard, every Blockbuster store in the country (with the exception of nine Blockbuster locations in Alaska) had all been shuttered.
  2. On the other hand, H&R Block was able to avoid a similar fate by transforming it’s business model in response to competition from online tax preparation products like Turbo Tax that allow people to prepare and file their taxes online without going into a branch office. So far at least H&R Block has been able to fend off the attacks from digital tools like Turbo Tax by launching its own online offering.
  3. Google Nest is another perfect example of true digital transformation. Every-day household items such as garage door openers, front door locks, lights, water faucets, and thermostats had remained virtually unchanged for decades. But now they can all be controlled remotely from an app on your mobile phone.
  4. One less obvious example is athletic apparel upstart Under Armour, which has been able to disrupt the business of traditional athletic apparel manufacturers like Nike and Adidas by building a huge online digital health and fitness community of over 80 million users (thanks to various acquisitions of online fitness communities like MapMyFitness, MyFitnessPal, and Edmondo).

Think smarter – because your competition is

I’m sure that you can think of dozens or more examples, whether it is Yelp making printed telephone books obsolete, Waze replacing that old stand-alone GPS device on your car dashboard, Airbnb disrupting the hotel business, or Uber revolutionizing the antiquated taxi cab paradigm—or any of countless other examples.

So how does this affect the software developers, product managers, marketers, pre-sales engineers, and account reps?

It’s pretty safe to assume that no customer is ever going to call and ask, “Hey, where can I buy some of this digital transformation stuff?” But it’s our responsibility, as a trusted partner of our customers, to think about emerging digital technologies and how our customers might leverage them to redefine their own business processes.

In the meantime, my wife and I are still waiting for someone to make an app will enable our son to make his bed or put the toilet seat back down remotely from his smart phone. Now that would truly be transformative!

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