WTH is Digital Transformation and does my business really need it?

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The corporate world is all hyped about Digital Transformation. When you google it, results from Accenture, IBM, EY and other global consultancies show up. Looks expensive… Is it worth it?  

Let’s start with the basics.

Wikipedia [https://en.wikipedia.org/wiki/Digital_transformation ] says “Digital transformation is part of a larger technological process (…), and is the change associated with the application of digital technology in all aspects of human society.” Business, as part of human society is also affected by it. In simple terms: Every company will become a software company (or go bust).

The argument is this: Because every company uses technology – at the very least a telephone, a computer and/or email – every company on the planet already IS a tech company. Just as a spade and hammer became essential tools no one gives a second thought to in today’s world, software that is dedicated and tailored to a businesses’ needs has become essential. Those without dedicated software will no longer be competitive and will go out of business.

The magnitude of the competitive advantage achieved with good software can be realized looking at giants like Google, Facebook, AirBnB, Uber, and Amazon, just to name a few. They are not “tech” companies. Google and Facebook are media companies, selling readership to advertisers.  AirBnB is a hotel chain, Uber is a taxi company and Amazon is a retailer. All of these companies used very specific, very good software to increase their competitive advantage. Their software increased productivity, added value and lowered the cost of their business.

Here’s how it works.

If you think about it, there are only 2 types of activities in every business:

1)      fun

2)      boring

It’s probably more accurate to say every activity has fun components and boring components, to varying degrees. For example: working a car production line = 0% fun and 100% boring, being a rock star = 100% creative and 0% boring. But of course, this is all subjective (some say heroin and groupies even get boring with time). Fun and boring are blanket terms of course. Fun encompasses creativity, freedom, and interest. Boring can be defined here as repetitive, tedious, and exhausting.

Technology has the capacity to ease those boring parts of a job. A nail gun, for example, gets rid of the boring part of driving nails, leaving just the fun part! Technology also has the capacity to increase the fun part: a phone helps a lot with communication. This is what good technology and good software does. It increases the fun part and/or decreases the boring part.

There is also, of course, bad software/technology that does exactly the opposite. It makes work even more boring and kills any fun. I can remember seeing accounting software with a bad user interface and zero flexibility or customization, so it reduced users to copy-paste robots. Everyone hated this system and avoided using it as much as possible.

Another popular case is trying to take stock, off the shelve software and use it for something it was never designed it to do. Excel + email is a combo forced to handle (poorly) way too many processes like procurement, HR or project management. This results in data inconsistency, incoherent communication, a lot of copy-paste work and a lot of frustration.     

OK, so technology and software can make life and business more fun and less boring.

But why is this better for a business?

Because companies can be more competitive in just 2 ways: Delivering the same value more efficiently (doing the same thing as others but cheaper) and delivering greater value (doing something better).

In order to operate more cheaply, you can either pay the people who work for you less or make their work more productive (produce more units at the same cost, so the unit cost will be lower). Computers are very good at calculating and replicating large amounts of data. Every business has a process at some level that involves calculating, sending, sorting information (reporting being the most obvious example). All of this can be improved with software so less work is required to do the same job.

Doing something unique and delivering greater value to a customer is a complicated task. A business needs to figure out what to do, how to do it, test it, make sure it’s something clients actually want and are willing to pay for. All of this requires a lot of creative work and other activities that are part of the “fun” basket. Minimization of boring activities through delegation to software frees up a lot of time and resources that can be redirected to more fun and creative activities, like product development or just finding new clients.

Finally, new products (the ‘delivering greater value part’) can be focused on minimizing boring activities for clients (or enhancing the fun activities). This is exactly what the abovementioned tech giants did –  using software. Google, for example, created a fun directory that saves time and effort, because you just type what you want, instead of manually going though pages and pages of categories and listings (think the old phone book).

So, it looks like you really do need software for your business. But not just any software. You need good, dedicated software that will minimize boring activities to free up time and resources for the creative, fun work! Oh, and this does not be to be expensive. Digital Transformation can be easy, affordable and pay itself off quickly.

 

About the author

Michal Bacia runs Hi Energy People [http://www.hienergypeople.com/] and delivers software for cleantech, including bespoke software solutions for the solar industry. https://twitter.com/HiEnergyPeople