Why ‘digital transformation’ should be left in the past

‘Digital transformation’ is a phrase that gets bandied about way too often. It implies a disruptive shift – the adoption of digital technology to digitise non-digital products. A large-scale, high-budget programme which will come to an end.  

But in a post-pandemic world, in reality those who haven’t started doing anything digitally are few and if they haven’t it is worrying. Pretty much every business that hopes to survive these days has a website, so you can argue everyone has digitally transformed, as they have an online presence. Because of this digital transformation feels like an outdated term that should be left in the past – pre-COVID. 

Instead let’s talk about “digital evolution” – the continual adoption of new and emerging technologies that can improve business efficiency, reduce costs and/or increase capability. Indeed, we support our clients to make regular, incremental improvements that enhance the colleague experience, that increase revenues, reduce costs, or help to reduce risk. With the current rate of change – where new technologies and services are developed and released at lighting speed, providing better information, increasing automation, and pushing boundaries further – I would argue that if you’re not evolving, you’re risking business success.  

Digital evolution is now at a post-pandemic inflection point. Many companies ramped up their digital spend as they revolutionised their digital offering and boosted their online presence just to survive – and now they’re stuck. It’s something we see all too often at Vidatec. For example, a retail company has invested in its website but continues to use manual processes to fulfil orders. During the Covid crisis, this company was forced into e-commerce without sufficient time, resource or capacity to fully consider the end-to-end digital process. Digital evolution would explore this process and develop the right backend to drive efficiency and improve profitability. 

There are numerous benefits to moving from a digital transformation to digital evolution mindset. It’s generally more cost-effective to drive efficiency by developing a programme to evolve what you already have, rather than scrapping it and starting again. This approach is usually a better use of employee time and capacity, with the added benefit that your people are free to focus on the next phase of innovation (as in the case above). This is especially important in a cost-of-living crisis when budget-holders are being driven to ‘sweating assets’.  

At this point, it’s important to stress that the rules for digital project success also apply to digital evolution – do your stakeholder mapping and ensure HR is looped in; have a robust change plan with appropriate training and development opportunities; build an engaging communications plan that shares the vision, sets out the objectives, roles and responsibilities and secures employee buy-in; and avoid working in silos.  

It’s also important to understand that digital evolution requires a different financial mindset. It’s typical to have significant upfront investment for “digital transformation” – but the danger here is that money is spent quickly and easily because of the hunger to deliver big, and fast. Invariably, these projects blow out of proportion and are among the 80% to be scrapped.  

Digital evolution requires a mindset shift toward regular, sustainable long-term investment with 70% functionality in the first few months and the remaining 30% gradually, over a period of several more months, to create longevity.  

It’s time to move the debate from digital transformation to digital evolution. Over the next few weeks, I’ll share more about how you can achieve this – from the technologies to help your business evolve and the leadership mindset shift needed to achieve this, to how evolution can benefit customers and employees.