It seems that every single conversation nowadays will include "digital transformation", "cloud", and "Industry 4.0". Despite the overwhelming focus on digital transformation, very few companies successfully achieve their objectives. While all companies are encouraged to undergo this change, it is not a magical one-size-fits-all solution that can work seamlessly from one firm to another: after all, an MNC with over 1,000 employees will have different needs from an SME with 30. Digital transformation needs to be a strategic and highly-customised process. Below you will find three common misconceptions about digital transformation.
"Digital Transformation means buying the newest technology can solve all business problems."
Buying the most recent software and hardware is the quickest implementation of "digital transformation"; however, a company that chooses to do this needs to understand that it is the business driving the digital technology improvements, not the other way around. Bain & Company recently released a report showing that only 8% of companies truly understand the purpose of the transformation:
"Rather than asking which technologies they should add to become more digital, the 8% ask how they can improve the business and how technology can enable that change."
-Vishy Padmanabhan, Steve Berez and Pascal Gautheron
Four Myths of Digital Transformation: What Only 8% of Companies Know
The same report sheds light on the assumption that purchasing the newest technology will always be the answer, and this is not the case. Companies cannot "buy their way to the top"; doing so will only lead to more harm than good.
"Investing in data science is always the right step."
You might have heard or read that "Data is the new oil", referring to the monetisation of information by numerous tech companies. Companies have always been collecting data about their customers, but the widespread belief that data analysis is key to growth has only gained widespread adoption recently. The demand for computer scientists and information engineers has skyrocketed along with its compensation. While the value of data is undeniable, jumping to hire a data scientist will not be beneficial to all companies who want to be more technologically advanced.
"[Big Data] isn’t a magic cure-all for your (or the world’s) problems and mistakes and miss-steps happen all the time, often at great cost."
- Bernard Marr
5 Massive 'Big Data' Myths Most People Believe - But Shouldn't
"Improvements in AI and Automation will eradicate jobs."
Everyone has heard of the doomsday prediction that all jobs will be replaced by robots, leaving human employees at the mercy of machines. Automation has indeed removed numerous roles in manufacturing; however, these are the mundane, repetitive, low-skill tasks that can easily be programmed. Digital Transformation is not about a takeover of technology; rather it is about using technology to complement present needs, while allowing room for future growth. While we all could be expecting a fully automated consumer experience because of digital transformation, the reality is that is highly unlikely.
"While automation may replace some jobs, the technology rarely acts as a substitute for people. Instead, jobs become codified and reduced to a narrow range of de-skilled tasks."
Tony Dundon, Debra Howcroft
Automation, robots and the ‘end of work’ myth
Digital Transformation is a journey, not a destination, and it needs to be treated as a toolkit to improve current business operations, rather than a magical solution that will automatically fix your business needs.
As final word for your digital transformation: be strategic, put people first, and adopt a growth mindset!
The Leadership Institute offers Strategic Advisory solutions for digital transformation in various industries. Find out more here.