Digital transformation… what does it mean exactly? Like any popular marketing term such as ‘social’, ‘digital’ or ‘big data’, it’s the latest in a long line of buzzwords, used so generically they’ve become useless.
In many a client meeting I’ve heard ‘digital transformation’ thrown into conversation to mean practically anything innovative – another buzzword – within the realms of social, content, digital or mobile. Essentially, it has lost all useful meaning.
And not only has it lost meaning, it’s actually, more worryingly, become misunderstood. Indeed, a 2014 Altimeter report on digital transformation outlined the central issue at large: “Only one-quarter of the companies we surveyed have a clear understanding of new and underperforming digital touchpoints, yet 88 per cent of the same cohort reports that they are undergoing digital transformation efforts.”
There are two broad implications here. Either people are undertaking digital transformation without understanding what it is. Or they’re overstating the digital transformation they’re undertaking. In either case, it’s probably safe to say that digital transformation is actually not transforming that much at all.
The implication? Digital transformation is in need of reformation.
So how we do we reform it? The starting point must be a clear definition. At OgilvyOne, we’ve been careful to define digital transformation in terms of what it is and, more importantly, what it delivers for our clients… Put simply, we define digital transformation as the ‘development of organisational infrastructure that powers best-in-class customer experiences and delivers customer engagement at scale’.
If you imagine that the customer experience represents the tip of the iceberg, digital transformation activities represent the large mass beneath the surface. It’s the ‘engine under the bonnet’. Simply, best-in-class customer experiences can’t be delivered at scale without them.
So what are the components of digital transformation? Taking the engine analogy one step further, there are three elements that must work in unison:
1. Technology – if the customer experience is the car, technology is the engine. The aim of technology is to provide a single customer view aggregating customer, platform and third party data in real-time and delivering a personalised customer experience at each touch point, on and off-line.
2. Data – if technology is the engine, data is the fuel powering it. Experiences that flex according to the customer context or as the measurement data informs are infinitely more powerful.
3. Governance – if technology is the engine and data is the fuel, governance is the user manual. What does the organisation need to do to ensure the engine doesn’t fail? What happens when it does? Who fixes the problem?
Building the infrastructure is certainly not easy – indeed, digital transformation is what a colleague of mine simply calls ‘the hard bit’ of digital. But it’s this ‘hard bit’ that makes all the difference and businesses in the digital age must invest in it or face being left far behind.
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