Like many commonly used phrases, "digital transformation" has devolved into a catchall term that means different things to different people. That's a problem. Digital transformation is critical for organizations to not only compete but survive. If leaders can't be clear about what a digital transformation is—and align their organization around a specific program—they can't expect to be successful.
Digital transformations are different from regular business transformations, in both small and big ways. For one thing, business transformations usually end once a new behavior has been achieved. Digital transformations, on the other hand, are long-term efforts to rewire how an organization continuously improves and changes (and that means really long term; most executives will be on this journey for the rest of their careers). That's because technology is not only becoming further integrated in business but also constantly evolving. For example, given the growing importance of AI in generating business insights and enabling decision-making logic, any digital transformation should also be an AI transformation.
Successful digital transformations hinge less on how companies use digital and more on how they become digital.
AI, and particularly generative AI, is changing the way companies operate and build value, presenting huge opportunities including content generation, new discoveries (particularly in fields such as pharmaceuticals and chemicals), and coding.
But it can be easy to get distracted by shiny new toys. The lessons of past technological innovations still apply: value comes from having a clear understanding of business goals and how technology can help meet them. It's important to experiment and learn rapidly, but it's also critical to resist the temptation to develop use cases with exciting new technology that doesn't end up creating value for the business.
Building and providing value with generative AI requires the same strong competencies needed for a successful digital transformation, including a clear strategy, an in-house digital talent pool, and a responsive and scalable operating model. And it's not just a one-and-done: companies that wish to incorporate gen AI into their value propositions will need to continually revisit their digital transformation road maps and review prioritized solutions to determine how new iterations of generative AI models can support their goals.
At DGTL we are getting involved in a numerous digital transformation journey many of you undergoing now and we are continuing to share with you our insights, observations and issues along the way.