Defining Digital Transformation
- “Digital transformation” has become a buzz phrase with many different meanings
- Marisa Kopec and Gil Canare delivered a presentation on digital transformation at SiriusDecisions Summit 2018
- Three types of business change are enabled by technology: relate, operate and evolve
If you’re in B2B sales, marketing or product, the term “digital transformation” has become all too familiar. You’ve probably heard it so many times that the meaning has begun to blur.
“The reality is that digital transformation has become such an inflated and overused buzz phrase that if you ask 10 different people what it means, you most likely will get 10 different answers,” said Marisa Kopec during the keynote presentation “Digital Transformation: What Does It Mean and What Must B2B Leaders Do to Make It Successful?” at Summit 2018 in Las Vegas.
“Case in point,” said co-presenter Gil Canare, “an executive from a very large tech company came up to me at one of our events and told me that their company had decided six months earlier that it would be going through a digital transformation. The goal: To be ‘twice as digital.’ Now, six months later, they realized that they had no idea what that meant.”
To redefine these buzzwords, Marisa and Gil led a research project to discover whether there’s a common definition for digital transformation among B2B and B2B2C companies.
Among the findings: The word “online” has become synonymous with the word “digital.” But clearly, the notion of online/digital and offline/non-digital no longer fits. “We worry that if our clients box this transformation into thinking it’s about online marketing, the Web site, e-commerce, SEO and predictive analytics, they may not be thinking broadly enough to capture the essence of what digital transformation really is and can do for an organization,” said Marisa.
“After nine months of researching, investigating and synthesizing the data, Marisa and I learned that what matters most is the second word: transformation,” said Gil. It’s really about change and optimization.”
Participants in the study were asked what areas of their companies were involved in the digital transformation process, and their answers revealed that technology is expanding beyond the back office into sales, marketing and product. Digital is pervasive across all customer and buyer touchpoints; SiriusDecisions research has shown that half of the interactions a supplier has with a buyer are non-human, and half are human to human. Those human interactions are facilitated by technology, via online chat, video conferencing, etc., but they still involve people relating to people.
Marisa and Gil posited that three types of business change are enabled by technology:
- Relate (change how we interact). The business change focuses on altering how the company presents itself to the market or modifies how it responds to customers or buyers. It’s about using technology to transform how a company interacts with its marketplace – altering the buyer experience (sales and marketing outreach) or the customer experience.
- Operate (change how we work). The business change focuses on altering how a company runs – its workflows, internal routines, systems, processes and infrastructure. This type of transformation involves using technology to transform how a company does its work – optimizing operational capabilities.
- Evolve (change who we are). The business change focuses on altering the fundamental core attributes of the company. It’s about changing the company’s genetic code, brand, business model or offerings.
When asked which of these three types of change was the focus of their digital transformation initiatives, 55 percent of study respondents were focused on interact, 19 percent were focused on operate and 26 percent were focused on evolve.
“You can see that more than half of the respondents are focused on relate transformation,” said Gil. “Our theory is that this is because of the high profile of customer-oriented technologies – these are the shiny objects everyone is currently chasing. We would argue, though, that true digital transformation, the kind that fundamentally changes an organization, must take all three of these types of change into account.”
“The net-net of our research is that digital transformation really is not a buzzword. It’s simply the application of technology for business change,” said Marisa.
- Introducing the SiriusDecisions Transformation Model
- Building the Digital Organization (client access)
- Introducing the SiriusDecisions Range of Rebranding Model (client access)
- Implementing the SiriusDecisions Product Marketing and Management (PMM) Model (client access)
- The SiriusDecisions Digital Type Assessment Tool (client access)
- The SiriusDecisions Digital Transformation Assessment Tool (Coming Soon)