I loathe the term digital transformation (DX). Implicit in the term is that there is something technological about it, something digital; a one-time event you can buy or outsource.
I think we should start calling it management transformation (MX). If your management team is doing its job well, the digital transformation never stops. The success or failure of a digital project is a testament to management performance, and digital transformation is a naturally occurring byproduct of excellence in management.
What is digital transformation?
Technology is a means to accomplish business goals, not an end in itself. Unfortunately, much of the extant information on digital transformation identifies technology as the goal. I think this is the wrong approach.
The best definition of digital transformation I have encountered appears in a 2014 MIT Sloan Management Review article and defines it as “the use of technology to radically improve performance or reach of enterprises.” For the purposes of the discussion that follows, let’s understand that digital transformation is really about improving performance rather than implementing technology.
Take a look at this county technology plan and you’ll find meaningless slogans like, “to be a digital county – ready for today and prepared for tomorrow.” The document is full of buzzwords and comes up short in terms of addressing specific, clearly defined business objectives. Technology is presented as the goal rather than as a vehicle for achieving business objectives. The language always puts technology first, with a vague objective appearing to be an afterthought.
On the other hand, this solid county business plan demonstrates that its management team has a strong understanding of how to achieve business goals and improve performance through the thoughtful application of technology.
Exacerbating the problem are vendors willing to sell their version of DX before explaining that managers must completely reevaluate all their assumptions and processes in order to make a new business solution really deliver value. In organizations where due diligence isn’t a cultural value, the harsh realities of an initiative only see daylight once an iron-clad contract has been signed.
Successful transformation of any kind requires management transformation first. The digital part is easy; the management part is an enormous challenge because managers rarely see themselves as part of the problem. Organizations that pursue technology rather than measurable business objectives are the ones most in need of management transformation.
Some standard scenarios
In one typical scenario, a senior manager wants to replace his or her antiquated enterprise application suite with a new one. In county and municipal agencies, this may mean replacing a 30-year-old midrange system. The business processes on which the current system is based may have roots in the 1950s or earlier and all the business functions rely on indefensible manual processing.
Other scenarios might include just about anything – a 311 system, highly automated zoning and code enforcement, or even something as mundane as reengineering payroll, AR and AP functions.
You sit down at the kickoff meeting and someone, maybe everyone, says, “We want to do everything exactly the same as we do it now; we just want new software.” This isn’t a transformative vision. If your management team shares this attitude, they are overseeing dysfunction and decline rather than leading. Buying a product and expecting performance gains to magically appear is delusional.
The correct way to approach these projects is to identify the business, management, and process problems first, establish goals and objectives, and then start thinking about technological solutions that can meet the business requirements. Technology should come last, not first.
In addition to avoiding change at any cost, many local government agencies overemphasize the role of technology and IT in transformational projects. Digital transformation isn’t a technology initiative; it is a core business initiative and should be managed appropriately with the board and senior management providing leadership, oversight and accountability.
Digital projects can quickly become quagmires, the $2.1 billion ACA website being a perfect example. The UK’s National Health Service EHR disaster dwarfed that with a £12.7 billion loss. These losses are frequently blamed on technology, but tech is rarely the problem. Digital project failures are management failures.
I recall one agency that had over 50 concurrent initiatives and projects underway in a single department and they weren’t doing any of them well. As a result, they were throwing boatloads of cash at the problems rather than stepping back and changing their approach by thoughtfully analyzing their objectives and business processes and pursuing a shared vision.
How to get started with management transformation
The MIT Sloan article quoted above identifies nine elements of DX in three major groups: transforming the customer experience, transforming operational processes, and transforming business models and the ideas presented might make a good foundation for your transformation. The authors stop short of telling you how to do it, so I provide the following suggestions for embarking on your own transformational project.
Be brutally honest
Total honesty in management teams is rare, but it’s a requirement to pull off a systemic transformation.
Focus on performance improvement and quality rather than technology
Even the best technology won’t inherently improve performance – that’s the role of management. Figure out how to improve quality and performance. Keep experimenting, brainstorming, and rethinking as you work through the project and don’t compromise until it is absolutely necessary.
Take a holistic view of the entire organization
For your transformational efforts to produce quantifiable results, the management team must share a common vision of what DX will look like in your organization. They need to be able to see the whole picture with all the moving parts in place. The best managers know how to do this, but most managers need to work hard to imagine what a completely transformed operation will look like once the initial transformation cycle is complete.
Understand current and future processes before applying technology
Apply technology only after understanding all your processes, goals and objectives. Your ideal business models and processes should drive technology, not the other way around.
Banish assumptions and sacred cows
In order to be truly transformational, give up all your assumptions about how business gets done and don’t leave changing even a single aspect of your processes and operations off the table.
Are you ready?
Is your management team up to the task? If they are, you probably already have digital transformation happening. If not, start working on your management transformation, first.