Digital transformation strategy is always evolving. Is your business keeping up
By Dan Winter, Partner and Technology Industry Group Co-Leader
Part of the confusion around the term “digital transformation” is that it has been in common usage among technologists and business leaders alike for decades at this point. Even if it feels like the term is new, synonyms such as “innovation” and “modernization” have been in the lexicon. Originally, it referred to the digitization of data and processes that had previously been essentially analog, a revolution that was enabled by rapid advancements in affordable business computing from the 1990s onward. But like the technologies which digital transformation ultimately makes reference to, the term has evolved to refer to something far more complex and intricate.
Today, everyone uses email to communicate. We are all outfitted with laptops and mobile devices. Productive “deep work” and client relationship management alike take place primarily online. Files are stored in the cloud. In fact, there is hardly anything in business that is not digitized. And yet digital transformation as a concept has, far from disappeared, only gained steam.
This is because the potential for digital information does not end with turning ink ledgers into 1s and 0s. That is simply where it begins. Today, businesses are realizing that all the data they collect and manipulate daily has the potential, if orchestrated in just the right ways, to enable new, more powerful user experiences and massive gains productivity.
What does digital transformation mean today
Call this newer understanding “Digital Transformation 2.0.” It differs from Digital Transformation 1.0 in that the original was primarily a technical challenge: e.g., how do I build or implement this technology that replaces paper memos and letters Digital Transformation 2.0, by comparison, is primarily a business challenge: e.g., how do I identify opportunities to combine the data siloed in my disparate systems to boost productivity or deliver new or better self-service experiences It is the difference between digitizing an analog process (like sending memos) or creating entirely new processes or experiences you wouldn’t have known were possible before business went digital.
The problem is that the popular understanding of digital transformation is limited to 1.0, when to stay competitive, we really need to be on level 2.0. The result is that many leaders believe their digital transformation strategy is on track when they are being left behind by more progressive, more forward-thinking, and more innovative competitors.
While we define Digital Transformation 2.0 as primarily a business challenge, that does not mean that there are not technical challenges that need to be overcome. The biggest one is the inability, in many companies, for the data contained in one system to interact with another. This is solved by integration. Over the past decade, integration has quietly become the locus of innovation in digital transformation strategy. In the past, to get two disparate systems to interact, a company had to essentially “hard-wire” a custom definition of how two systems should interface. This is called “end-to-end” integration, and it works fine on a small scale. But when the average enterprise has nearly 130 applications in their IT environment, approaching integration in this way is simply not scalable. Not only that, these applications are constantly being updated by either the vendor or, for custom applications, in-house IT in ways that could cause integrations to unexpectedly fail, creating a whole host of problems for any applications that rely on those integrations.
Connectivity Breeds Productivity
Thankfully, the API revolution over the past decade has significantly lowered the barrier to entry for integrations. API stands for “application programming interface.” Essentially, it is a formal description of how an application behaves, thus enabling developers to easily leverage the functionality of the app without ever needing to know any details of how it actually works behind the scenes. As you can imagine, emerging technologies that not only help build and manage these various APIs, but actually update and repair themselves automatically when functionality or definitions change, have been a boon for application development.
If there’s one thing business leaders should understand about digital transformation in 2022, it’s the importance of connectivity. Unlocking your data via APIs is the technical means by which you enable the myriad of new processes and functionalities your business users need, many of which they have probably have yet to even dream up. But armed with this understanding of Digital Transformation 2.0, you are well-positioned to keep your business competitive and ahead of the pack, especially in industries that have been traditionally less data-driven.
BPM: Your Shortcut to Digital Transformation 2.0
At BPM, we understand the challenges associated with connectivity and this more powerful, yet more complex, version of digital transformation. We also understand the necessity of effective digital transformation strategy to keep your business competitive. That’s why we built together a cross-functional team that brings our best and most-qualified resources to bear on even the most complex digital transformation strategy and implementation projects. With deep experience in over a dozen target industries, our Digital Transformation professionals understand the unique challenges facing your business and come armed with tailored solutions to overcome them. To learn more, contact Dan Winter, Partner and Co-Head of our Technology Industry Group, today.