Digital transformation or digital optimisation: A journey versus a starting point

digital transformation

There’s a lot of noise in high places. Senior executives are asking questions. They’re demanding answers.

What are they talking about?

Digital transformation.

It’s important, because Europe is currently operating at only 12 percent of its digital potential, while the U.S. is operating at 18 percent, according to the McKinsey Global Institute’s Industry Digitization Index.

Confusion reigns.

The reason there is so much perplexity is that, quite simply, somewhere along the way, digital transformation has mutated into a multi-headed monster that now encompasses many disciplines: Consulting, virtualisation, Agile, process automation, etc. With this mutation, the clarity of the real meaning of the concept of digital transformation has been lost. I believe businesses and senior executives are confusing, quite reasonably, the difference between digital transformation and digital optimisation.

Let’s explore further.

Digital transformation

Digital transformation is a foundational change in how an organisation delivers value to its customers. Successful digital transformations do not begin with technology. Instead, the focus is on overhauling the organisation with a customer-focused goal in mind, such as building customer-centric new products.

Indeed, it is important to remember that the transformation is just as much about leadership and the ongoing journey as it is about technology. It’s not just about making information available digitally; it’s about what your organisation does with that information – making decisions, driving processes and serving customers.

At a high level, digital transformation represents a fundamental rethinking of how an enterprise uses technology to radically change performance. This is why Gartner talks about companies pursuing net new revenue streams, products and services and business models.

If a full-on digital transformation seems a bit out of reach, perhaps your organisation should start with the technology it already owns and work toward digital optimisation first. Whereas digital transformation is all about an ongoing path, digital optimisation is the foundation that will launch your transformative efforts.

After all, not only do you need a roadmap, you need to know how to fully utilise technology before you refocus your organisation. Otherwise, you’ll end up with digital processes that aren’t optimised, they’re just the same old messy processes without all the paper.

Digital optimisation

Digital optimisation is all about readiness to embrace a digital transformation, but only when your organisation is ready. If you implement technology piecemeal, purely as a reaction to growing business pain points that have become inefficient or dysfunctional, trying to overlay a strategy will only cause more dreaded information silos and the inability for systems to communicate – making it hard for employees to find information and difficult for customers to remain loyal.

That’s the key to digital optimisation: Allowing people, processes and technology to function together seamlessly for the benefit of your customers. It’s the predecessor to digital transformation, the foundation. Only when you have the right pieces in place can you embark on a larger journey toward transforming the business as a whole.

Optimisation is the key to extracting real value. It’s all about removing business silos, seamlessly integrating core or legacy systems, eradicating reliance on shadow systems (spreadsheets are a perfect example) and sharing across the business. Thus, you maximise this “rich seam of gold” contained in the unstructured data previously locked away.

Perform a digital self-check

Is what you are trying to achieve disruptive to your business and to your industry? Are you focused on new business models and gaining net new revenue streams?

If the honest answers are yes, you may well be conducting a legitimate digital transformation.

But if you aren’t already on your way, there’s good news. To achieve digital optimisation, you don’t have to transform your entire institution in one go. Begin with the end in mind by capturing the information you need to make more-informed decisions, stay ahead of regulations and provide better service.

Some starting points include:

  • Evaluating your current processes for potential improvements at a base level – before automating any tasks
  • Investigating your silos, shadow systems and shared drives
  • Finding out what data users are storing, where and why
  • Evaluating the process hours wasted by “Swivel Chair Automation” and the cost to your business
  • Investigating an enterprise platform approach, seamlessly integrating with your core line-of-business systems and providing intelligent capture processes and electronic workflows

By looking into these questions, you’ll go from small steps to large leaps. Maybe you’re not on a true path to digital transformation just yet, but that’s okay. That means you can approach it with a roadmap, possibly leapfrogging competitors by taking advantage of innovative technology like the cloud, mobile access and advanced analytics.

Regardless, wherever you are on your path, begin with the end in mind.

Working from Hyland's London office, Colin brings more than 30 years of corporate experience ranging from enterprise content management (ECM) to natural language processing (NLP) for clients ranging from the Lloyds Banking Group to BUPA. Over this period, he has seen many changes in system and solution approaches, some successful and some that should not have seen the light of day. As someone who can remember when legacy systems were mere young kids on the block, you can guarantee he will have a point of view.

Colin Dean

Working from Hyland’s London office, Colin brings more than 30 years of corporate experience ranging from enterprise content management (ECM) to natural language processing (NLP) for clients ranging from the... read more about: Colin Dean