What is Digital Transformation and Why is it Important Now?

One of the things I appreciate most about the annual CRM Evolution conference—aside from the new and old relationships that are fostered and fueled—is the vast amount of quality business and technology ideas that come from it. This year’s event, held in May, was no different. The amount of great ideas and insight could probably fill several issues of CRM magazine.

While there were more than 30 presentations across three tracks, the overarching theme was pretty clear—the need for digital transformation is here.

What is digital transformation, and what does it mean for an organization? It’s a difficult question to answer, as a pithy response just won’t do. The reality is that there’s no one right answer, as each company has different requirements, needs, strategies, and ways of addressing them. However, it is possible to define what digital transformation means to your company.

Brian Solis, principal analyst at Altimeter Group and author of X: The Experience When Business Meets Design, offered a thought-provoking definition of digital transformation during his keynote presentation: “Digital transformation represents the quest to understand how disruptive technology affects the digital customer experience.”

Many companies have already been forced into some sort of digital transformation, driven by competitors and industry disruptors such as Amazon.com, Apple, Netflix, Uber, or Airbnb. These companies, to Solis’s point, have succeeded in disrupting their industries by substantially improving user experiences. Companies that don’t respond could follow the same precipitous decline as BlackBerry, or even worse, go out of business like Blockbuster or Borders.

At the conference, I interviewed Sameer Patel, senior vice president of product management at SAP. He maintained that in terms of the need to address digital transformation, “the roof is on fire now,” suggesting that the threat is imminent and organizations must act fast.

“If you look at all of the natively digital businesses that have entered all of our lives…and you try to deconstruct these businesses and you look at how they are formed, they are formed with the customer in mind, and then they fill up the experience based on how the customer wants to interact with you. And so every boardroom right now of every company is having that discussion and saying, ‘Is there an imminent Uber in our industry, or is there one that could be? And, if they were to start with a clean slate, how would that look?’ It doesn’t mean that the risk is tomorrow, but you know that something’s coming out of left field and we need to be ready for it,” Patel said.

So where do you start? Solis recommends that business leaders understand their customers’ experiences and establish a vision and culture within their organization that aims to improve these experiences.

Discount retailer Target, featured in both articles in this month’s special Retail Report, is a prime example of a company that is undergoing a digital transformation to compete with Amazon.com. Oren Smilansky’s feature “Retailoring Retail for a Mobile-First World” reveals how Target enabled shoppers to try out furniture in a store and buy it on their mobile device without getting up. Creating this fluidity between Target’s physical and digital worlds proved to be valuable, as it increased patio furniture sales two to three times at participating locations.

Learn from industry leaders like Target. Clinging to the status quo is not an option. Disruption is happening. You can’t fight it. Your only choice is to embrace it. How you embrace it via digital transformation is up to you and your leadership team.

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Editorial Director David Myron can be reached at dmyron@infotoday.com, or on Twitter @dmyron.

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