During the period from 1760 to approximately 1840 the world, starting with Great Britain, changed because of the industrial revolution. Manual production methods were transformed by the introduction of machines. Factories driven by machines turned the textile industry upside down. New chemical processes were invented. Steam power changed transport. The entire process resulted in a huge leap forward in personal productivity and income.
The economic drivers that affect all our lives and businesses undergo significant shifts every so often. The digital revolution, which started in the 1950s with digital record keeping and digital data processing, began the process of moving from mechanical and analogue processing and manufacturing to digital electronics. It brought about the dawning of the Information Age. With the growing abundance of information and fast communication capability we have arrived at a point where the decisions we take every day are increasingly driven by the related data that we have easy access to. This has introduced the phrase “Data Driven Decision Making”.
Digital Transformation introduces a few new concepts and there have been steps along the way that have brought us to this point.
Digitisation involves switching from manual records and processing to electronic means. It involves adapting our business processes to include electronic information and digital processing. It incorporates electronic communications. This is now commonplace and most companies and individuals have made this jump already
Transformation is the bigger challenge. Many businesses have digitised their business processes but have not realigned the same processes to take full advantage of the benefits that modern technology can bring. So, some of the benefits of the digital age are being reaped but there are a lot more available.
Then we need to consider something called “fungibility” as the concept could be applied to our business processes. It’s an unusual word in that it normally applies to goods or commodities that can be mutually substituted. When used with transformation of our business processes it refers to the ability of that process to accept change. We must ask the question – Are our business processes so entrenched that, while we can “computerise” them, we cannot fundamentally change them? We need to get to a place where our business practices are always open to change. They are designed for change. Then, when we apply the latest digital technologies we can get huge gains in productivity.
This is easier said than done. There are some processes that provide comfort because of their inability to change. Reliability and certainty are built into the processes. Double entry accounting is a prime example – it would take a lot of convincing to move away from that standard. Identity is also something that should not be open to change. While certain standards may be sacrosanct, the way we deliver them or incorporate them should be open to change.
An example of a revolutionary application of process change is that seen in the music industry. The product remains the same but the way it is delivered and consumed has changed utterly. Businesses in the music industry that were unable to adapt to this change have gone out of business.
The key things to consider: We must keep our business processes and our whole businesses agile. They must be ready for change. Technology, well applied, can help us adapt to change that is imposed on us. It can also help us to streamline or change our processes to gain the advantages of greater productivity and new business models. It can help us make better and faster decisions.
Let the Transformation begin!