Defining Digital Transformation, Strategy and other Digital Terminology


    In my last post, I took a stab at defining the Digital Mindset from the perspective of different roles and responsibilities in the organization. In doing so, I used several terms, some industry standard and others that are emerging so with this follow up post I thought I'd provide more color on my definition.


    Digital Transformation


    Digital Terminology


    • Digital Transformation - See my older post older post, I provided my definitions for Digital Business and Digital Transformation.

    • Digital Strategy - If digital business defines an end state and transformation defines a path to get from current state to end, then Digital Strategy sets the scope, priorities and constraints of the transformation. It may state what customers segments you'll target, what digital capabilities are priorities, and what regulatory and other business factors are potential constraints. Strategy often communicates scope, priorities, and constraints in the forms of mission, goals, and values to help members of organization translate a digital vision to "what needs to be done".

    • Digital Opportunities - These are opportunities to grow revenue, new customers, and new markets through digitally driven products and services. It should be specific, so for example, "Investing in this [capability | new product | new service | product/service enhancements | new channels] we can grow revenue by [increasing prices | selling to a target customer list | growing market share in these areas]".

    • Digital Capabilities - As a technologist, I also use the word "Digital Capability" to identify technical attributes of products, services, supply chains, or business processes that strategically developed around a technical capability without assumptions on the underlying digital platform. This can include everything from reaching new customers through digital channels (a mobile digital capability, a social digital capability), the capability to process big data (big data capabilities), the ability to integrate with things (IoT), the ability to source work in a business process algorithmically (crowdsourcing, data processing services, AI as a service), or the ability to automate and integrate transactions (digital supply chain, blockchain). Digital capabilities are also what we deliver to the organization to make them more smart, efficient and collaborative and are properties of underlying systems that enable elasticity and automation.

    • Digital Products - These are products designed a digital customer experience first and add "brick and mortar", "paper" and other "analog" experiences later if needed. These products take advantage of artificial intelligence, location awareness, voice controls, interoperability with sensors, and access to a digital ecosystem of services to optimize the user experience and provide personalized conveniences.

    • Digital Disruptors - Are competitors that offer Digital products that can challenge or disrupt an existing business or product line. See my example of digital disruption in the newspaper industry.

    • Digital Interoperability - Implies that the data collected in one system, application or interface can easily be leveraged in other platforms. Some interoperability is achieved through a unified customer experience, for example, when an application provides access to all your data and provides similar experiences when accessing over web, mobile, and other interfaces. Sometimes interoperability is achieved when vendors agree on data and interface standards. Lastly, interoperability can occur through integration platforms such as ifttt, Zapier, and other iPaaS providers.

    • Digital Ecosystems - Digital ecosystems form when there are a wide range of services that can be easily interfaced that provide digital capabilities. Participants in the ecosystem often develop application programming interfaces (APIs) and other data interfaces to enable sanctioned consuming applications to access these services. The availability of these services implies that businesses can develop best in class applications by leveraging third party services in the ecosystem. They can also extend their customer reach and develop new businesses by making their own digital capabilities accessible. 

    • Digital Platforms - Are technologies selected by enterprises and organizations to be foundations for their digital businesses and to support digital transformation. I have a previous post on criteria to select digital platforms and proposed a process to evaluate transform enabling technologies.

    • Digital Processes - A business process that is heavily automated, robust to respond to evolving business scenarios, and is highly data driven. They can be contrasted with manual, paper driven, heavily stage gated processes that are inefficient, error prone, or have bounded scalability. McKinsey defines digital process innovation as, "A focus on the implementation of new or enhanced technology-enabled ways of working—or digital process innovation—can help companies simplify the technology landscape, reduce overall IT costs, and bring products and services to market quicker, thereby realizing greater earnings potential"

    • Digital Channels - Omnichannel is when customers have multiple ways they can interact with a product, service, business, sales person, or customer support. It also is when the sales, marketing, and support organizations have multiple ways they can interact with customers, prospects, leads, and users. A digital channel is when the collaboration, customer experience or communication occurs using digital tools, contrasted with in-person or physical channels.

    • Digital Marketing- Marketing activities to customers, prospects, and leads through digital channels. See building capabilities in digital marketing or benchmarking digital capabilities as good references. 

    • Digital Practices - Are attributed of the organization defined through roles, responsibilities and talent that implement digital strategy and transformation. MIT has a good write-up on these digital capabilities your organization needs and McKinsey's write-up discusses strategies for acquiring digital capabilities. Also see my post, What practices are needed for Digital Transformation.

    • Digital Talent - Digital talent refers to having individuals with digital skills. Common digital skills are in leveraging mobile tools, data analytics and visualization, social networking, collaboration tools, abilities to configure web tools, and even some basic coding. Beyond these basic skills, digital skills can be very role and organization dependent. If you are in sales, digital skills often includes understanding of CRM and sales automation. If you're in finance, you should have skills working in one or more ERP platforms. Here's a good study on developing digital talent.

    • Digital Workplace - From Gartner, the Digital Workplace enables new, more effective ways of working; raises employee engagement and agility; and exploits consumer-oriented styles and technologies.When I think of the digital workplace, I think of unified communication tools, collaboration environments, and enterprise mobile capabilities all aimed to help teams share information and be more productive.
    Did I miss any?


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