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5 Myths of Digital Transformation Debunked

Roland Alston, Appian
June 11, 2018

Back in the day, making your product or service incrementally better and cheaper was a slam-dunk formula for business success. But those days are long gone.

In the digital economy, organizations are under relentless pressure to keep up with ever-changing expectations and emerging digital trends.

Perhaps this is why:

    • 87% of Global 2000 companies said they were planning digital transformation projects in 2017, according to a recent LTM survey

    • 54% of respondents ranked digital transformation as their number one corporate priority.

Sometimes we can see trends coming. And, if we're willing, get ahead of them, and turn them into opportunities for innovation and growth.

The alternative is to coast and risk digital disruption.

Better to beat disruption by innovating faster, working smarter, and moving at digital speed.

So, here's a quick rundown of some popular misconceptions about digital transformation, and why you shouldn't believe them.

Myth #1: Digital Transformation Is a Technology Challenge

Last year, Forbes reported that 84% of digital transformation plans failed. Experts offer different viewpoints on the high casualty rate. But many agree on two things: The hard part is getting organizations to change. And, the transformation journey starts with upgrading your business strategy for the digital economy.

"You have to start with developing a future-facing view of your industry."

David Rogers, author of The Digital Transformation Playbook: Rethink Your Business for the Digital Age

"Think about how emerging technologies, such as robotic process automation and artificial intelligence, will impact your industry" says Rogers. "Start with that, then come up with strategies for how your company can remain relevant in this new world.

"So, first figure out your strategy," says Rogers. Then, figure out which technologies will enable them for your organization.

As for the challenge of getting people to work differently than they did before, and enabling them to work across silos the way they didn't or couldn't do in the past? This is where the real value of digital transformation is.

"I like to think of it in terms of dimensions," says Vijay Gurbaxani in a recent blog interview on Gurbaxani is Founding Director of the Center for Digital Transformation, at the University of California, Irvine.

"The first is having the right vision. A lot of businesses think that digital transformation is a marketing activity or a customer experience initiative. Or you can have pockets of digital here and there. But digital transformation is about operating in a whole new way,"

Vijay Gurbaxani

What it all comes down to is this.

Think about digital transformation as a vision, and the technology as a piece of the puzzle, a tool you can use to transform, rather than an end unto itself.

Myth #2:The Best Way to Succeed at Digital Transformation Take an Incremental Approach

Not according to the experts. Better to focus on rethinking your business model, not just making incremental changes to it.

There's nothing wrong with making incremental process changes. But don't let that mindset get in the way of doing something bigger.

"Digital transformation is about changing from a caterpillar into a butterfly, says George Westerman, author of "Leading Digital: Turning Technology into Business Transformation", which is widely considered THE must-read guide to digital transformation. "It should make you faster, more agile, and closer to your customers. It should give you wings so you can fly."

"Unfortunately, too many companies talk a good digital transformation game. The problem is, they're just thinking about being a fast caterpillar, not a butterfly."

George Westerman

Myth #3: Successful Digital Transformation Starts in the Front Office

A better place to start is back office operations. Because if you've got a messy back office, if you've got hundreds or thousands of disconnected back office systems some legacy, some new it's really hard to get a unified view of your customer.

This is why the best digital transformation efforts start with the back office first. And if you can get that right. If, for example, if you combined robotic process automation, business process management, artificial intelligence, and case management capabilities to automate repetitive, standardized, rule-based tasksÖ

If you used this kind of intelligent automation to integrate multiple systems and centralize customer information across them, if you created a 360-degree view of your customers, amazing things would start to happen, that just weren't possible before.

Myth #4: Customers Want Personalized Service, not Automation

There are many assumptions about what customers want. And one of them is that customers want people to provide them with service not automation.

The truth is, customers want the convenience of getting the service they want, when, where, and how they want it.

And, they don't care whether it comes from a robot or a person.

The benefits of this kind of personalization are huge. According to eMarketer, total retail sales will hit $5.68 trillion by 2021. And, Accenture says there's a $2.95 trillion opportunity for companies that leverage digital transformation to personalize the customer experience.

So, if you're not using automation to deliver effortless, personalized, customer experience, it's time to make a change.

Myth #5: The Rise of Enterprise automation Is a Job-Killing Apocalypse

The rise of automation is a tale of two trends jobs lost and jobs gained.

There's fear and loathing that digital labor will displace more jobs than it creates. But, another possibility is that intelligent automation will complement the capabilities of highly-skilled workers instead.

The opposite is true of low-skilled jobs that compete with the automation trend. The difference is that automation tends to complement (not displace) highly-skilled workers.

"It's a question of which jobs complement digital trends, and which are in direct competition," says Morgan Frank, MIT Researcher and co-author of "Small Cities Face Greater Impact from Automation", a study that empirically connects the impact of automation and urbanization on employment.

"Low-skilled jobs compete against automation," says Frank. "But, machine learning makes highly-skilled computer programmers, for example, more efficient at understanding data, and writing algorithms to automate things that people would otherwise do."

Bottom line: Based on his research at MIT, Frank says that the automation trend is no job-killing apocalypse, in terms of current technologies and technologies in the pipeline today.

There's no denying that certain jobs and certain industries will experience greater workforce disruption than others, as robotic process automation and artificial intelligence reshape a variety of jobs. Here's the math. By 2030, 75 million to 375 million workers (3 to 14 percent of the global workforce) will need to switch occupational categories or upgrade their skills, according to a recent report by the McKinsey Global Institute.

But here's the good news.

If you take a long-term view, and if you look at previous technology revolutions, automation tends to create more jobs than it displaces.

The question is how do we manage the transition?

And this calls for making some hard decisions around workforce re-training and investment.