Digital transformation is typically defined as moving to a customer-driven, digital-first approach. Even this definition, however, doesn’t really tell us what the term means in practice, in part because the reality is the form a digital transformation takes will differ for every business.
Ciarán Harris, co-founder and director of the user experience (UX) and design agency Each&Other, said that digital transformation as a term had become vague due to overuse. Nonetheless, he said, there was a core meaning to it.
True digital transformation means making significant changes to how you do business, he said.
We come across organisations that are using the buzzword, but are really only making incremental changes. It’s quite rare for someone to use it in the intended sense: as a transformation; seeing where you are and where you want to get to.
Naturally, significant change can be a cause of anxiety, but the answer to this was to plan effectively.
“Like any jump, you need to look before you leap,” he said.
Digital transformation can mean deploying artificial intelligence (AI), data analytics and replacing infrastructure with the cloud, but the key is not the technology, it is the change and the outcome. Indeed, following the pandemic, small organisations have proved they are as adept as large organisations when it comes to change.
“For them it was a real transformation. Look at where they were and look at where they are now. Putting stuff on a new server architecture, I wouldn't call that transformation,” he said.
Deep technological change, however, is under way and new possibilities are being opened up by new technologies. Edge computing, for instance, where processing is pushed back out from the centre will continue to grow with the deployment of 5G networks.
This necessitates not only new ways of processing data, but new ways of thinking about it.
Harris said that new applications were revealing themselves as the internet of things (IoT) becomes a reality.
“If you think about things like cloud computing, with high-speed data your data does not reside in your laptop or desktop, it resides on a server somewhere. The where usually doesn't matter. Sometimes, however, it does: you don't want an autonomous car reacting to an emergency situation via some servers in Austin, Texas. Doing it locally is edge, which is the other side of the coin,” he said.
Use cases go well beyond transportation, however, and how the move to routinely connected devices will play out remains to be seen. What is already clear, though, is that IoT is transformative and creates opportunities for businesses to gain a competitive advantage. Industrial applications, in particular, show promise.
“With 5G, it’s all about devices. IoT is here now in the form of things like Amazon Echo and the Ring doorbell, and there are even more applications in industry: wind turbines, auto manufacturers, IoT infrastructure in managing logistics, supply chains and the production process,” Harris said.
Another tech changing the face of business is artificial intelligence (AI), and even small businesses are now able to take advantage of it.
“Quietly, behind the scenes, it’s being embedded everywhere. What does it mean for SMEs? Until recently it was kind of out of reach, but we're seeing more and more solutions targeted directly at SMEs,” he said.
There are challenges associated with AI, however. For example, one thing that SMEs need to watch out for is potential bias, Harris said.
“Things are as good as the data that goes in. One of the issues with it [AI] is, for the most part, it's a black box, and that is something designers such as myself are concerned about as it makes it hard to understand if there is bias or not,” he said.
Examples of potential pitfalls include CV-screening software, already widely in use, which has resulted in most job applications never even making it to the stage where a human casts an eye over them.
These kinds of problems, which are essentially technical in nature, can be dealt with by ensuring a humanistic approach remains central to digital transformation.
Whatever technological path businesses go down, the reality is that change is coming, Harris said.
“Everything should keep changing and should keep improving. I think there’s a case for both constant incremental changes and, every now and then, a leap”.
For Harris, it is important to go back to basics: the first question any business needs to ask of digital transformation is what is the goal.
“You have to have a reason: Why are you doing this?” he said.