Digital transformation is a word synonymous with our rapidly digitalizing world. It represents a complete shift in business operation philosophy – a new age for owners and employees. And it’s also a complete misnomer.
In this blog, we’ll be unearthing the origins of the phrase ‘digital transformation’, assessing what it really means and finding out whether the term still applies to the way organizations are digitalizing now.
What is digital transformation?
Digital transformation is defined by Gartner as, “anything from IT modernization (for example cloud computing) digital optimization, to invention of new digital business models”. It’s a relatively broad term that covers the evolution of the digital spaces businesses work in.
The phrase is mostly used by businesses to describe processes such as: moving legacy computer systems to the cloud, rolling out virtual cloud-based computing, and modernizing customer and employee experiences.
Where did the phrase come from?
The phrase was coined by the consultancy firm, Capgemini, in collaboration with MIT in 2011. The researchers who came up with the phrase initially used it in an even broader sense than Gartner’s definition. They defined digital transformation as, “the use of technology to radically improve performance or the reach of business.”
Like the Gartner definition, this focuses on the specific actions covered by digital transformation rather than the timeliness or consistency of the actions that form the approach. This is what is missing from our current definition.
Is digital transformation still an accurate phrase?
A lot has changed since 2011. After more than a decade, and once-in-a-lifetime pandemic, it’s not surprising that the digital landscape described by Capgemini and MIT researchers doesn’t quite fit with the modern approach.
In the present day, digital change is constant. To stay on top of the race for faster processes, better experiences, and more efficiency, organizations must maintain a state of constant optimization of their digital services. And here lies the issue with ‘digital transformation’.
As professor Gerald Kane writes, for the Khaleej Times, “Looking up a number of definitions for the word “transformation” demonstrates that they exhibit a common characteristic – they all define transformation as a singular process that occurs and is then completed. Digital transformation, however, does not work that way. It is not a process that will ever be complete, at least not in the near future.”
So, the process we are describing isn’t about a singular, start-to-finish transformation. It also isn’t really about digital technology – it’s about creating a company culture and structure that allows technology to be used to its fullest potential.
The future of digital change
Professor Gerald Kane’s argument that “digital transformation is a misnomer” holds up. ‘Digital transformation’ does describe the initial activity of adapting existing digital environments so that they are more powerful, integrated, and efficient. However, it doesn’t accurately describe the way this is rolled out within an organization, nor how the process continues indefinitely throughout the lifespan of the business.
So, should we rename it?
If we were to rename the process to fall in line with the current definitions of modernization and digitalization in a business setting, we would need to find two words which better describe the process. ‘Digital’ is misleading because some of the changes don’t specifically pertain to technology. ‘Transformation’ is a static process, rather than ongoing. Something like ‘Continuous Optimization’ or ‘Ongoing progression’ might stand the test of time in the coming years.
Adapting to the new way of working
This might all seem like a lot of fuss over a couple of words. But once you look past the pedantry, you’ll see that this really does matter. When we look at the current state of digital transformation in business, 21% of companies believe that they have ‘completed’ their digital transformation. And whilst 70% have a strategic plan in place for their digital transformation, only 7% are fully implementing these plans.
It seems that a misleading name may be leading businesses off course. As is widely discussed in the digital transformation space, the process is ongoing. It consists of continuous optimization and evolution of digital environments. The fact that 21% of companies believe they have completed the process is troubling. What is more troubling from these statistics, is the apparent reality that 93% of businesses are not fully implementing the digital changes they have identified quickly enough.
Because of the fast-moving nature of transformation, the longer you leave it before making a start, the more you’ll have to do to catch up with competitors who were faster to adapt. What has been lost in naming this process is both the urgency and the commitment required by businesses to make digital transformation happen.
To adapt to this new way of working, we need to instil these two important aspects of digital change. Transformation is constant, and it is something you need to dedicate time, effort and budget toward in the short and long term, if you are to see results.
Transform your business with Nintex
Committing to true digital transformation requires a culture change. It requires fresh commitment toward your digital goals. At Nintex, we provide some of the biggest organizations in the world with the tools they need to improve processes and create better experiences for everyone. From robotic process automation software, to consultancy, we help businesses at every step of their transformation journey.