By Chris Evans July 15, 2023
Digital transformation is the fundamental rewiring of how an organisation operates.
I have stressed this many times before but McKinsey have recently summed up perfectly and credit for the source of this post we attribute to them for this reason.
The goal of a digital transformation, as outlined in the new McKinsey book Rewired: A McKinsey Guide to Outcompeting in the Age of Digital and AI (Wiley, June 20, 2023), should be to build a competitive advantage by continuously deploying tech at scale to improve customer experience and lower costs.
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- 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 organisation 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.