The term "digital transformation" has rapidly risen into prominence in the last few months, crowding out earlier terms used to describe the intentional, (r)evolutionary change in organizations that emerging technology has driven.
(Editor's Note: Stowe Boyd will be presenting a session on the business implications of the IoT on Nov. 3 at CMSWire's DX Summit 2015 in Chicago)
Changing How We Do Business
The introduction and maturation of communication technologies in the 1990s sparked the business process reengineering movement, which led to the massive restructuring of business as a direct consequence of the adoption of workflow, groupware and, most centrally, Internet-based email. In large companies, many layers of middle management were "reengineered" out of existence as companies were "rightsized" and "downsized."
In the following decade, Web 2.0 and social networking tools designed for consumers began to trickle into businesses, triggering the Enterprise 2.0 and Social Business movements. The granddaddy of all transformational technologies — the Internet — continues to change how we do business almost 20 years on.
And today, we are seeing a fast decline of the Enterprise 2.0 and social business monikers. Skeptics of digital transformation — and there are always skeptics — may claim that it is "old wine in new bottles," and that's a valid point.
Are we essentially confronting the same business opportunities and challenges as BPR, E2.0 and Social Business, but talking a different game in focusing on marketing and customer relationships? Or, looking back once more to the 90s, are we headed for another time of resizing companies to fit the next, digital economy, one in which many kinds of work will be taken on by algorithms or robots?
An Emerging Industry
Let's define the term: Digital Transformation is a new operating model of business — based on continuous innovation — by the application of digital technologies and the restructuring of operations around customer experience to better engage with customers, the company ecosystem, and the greater marketplace.
An industry is emerging, led by the major management consulting firms and a growing number of boutique agencies, who are promoting long-term reconfiguration of company operations, technologies and customer interaction based on their own variant of digital transformation.
Currently, the Digital Transformation services market resembles the Wild West, with consulting firms making large land grabs and setting the rules as the space develops. Digital transformation is so chaotic, in part, because there isn’t a consensus definition of what the term means or encompasses.
Clarification of that is at the heart of the research initiative we, at Gigaom Research, are launching. We will investigate what these companies are advocating, who they are working with, the breadth and depth of their offerings, and the technologies that they recommend to get there. The investigation will involve survey-based research and follow-up conversations with digital transformation practice leaders at management consulting firms, their customers and the business community at large.
By creating a picture of the multiple aspects of digital transformation, organizations will be prepared to choose a logical and feasible starting point and the best-fit consulting partner with which to work.
Defining and mapping the digital transformation consulting services market will involve asking the following questions:
- What does it mean to be or become “digital”?
- What are we setting out to transform? Business models, processes, assets, culture, compensation, something else or all of the above? Is there anything that can go unchanged?
- Given the current state of an organization and the vision of its future, where should it start its transformation efforts?
- Who are the major vendors of digital transformation consulting services?
- What aspect(s) of digital transformation does each of these vendors address?
- How do the consulting firms configure their practices to meet their clients needs? Obviously geography plays a major role, as does industry: but what other factors shape the nature of this new and burgeoning service industry?
- What is the beginning and end of digital transformation?
By getting answers to these questions, and others, from all types of participants in the market for digital transformation services, we hope to turn a bright light on the elephant in the room, one that others might be unwilling to discuss. Our goal is to help organizations take a better informed — and more reasoned approach to digital transformation — rather than stumbling forward in the dark.
We plan on releasing updates as our investigation progresses.
If digital transformation is in fact going to lead to a new era of resizing, we want to know what shape the next way of work will take. And we bet that everyone else does, too.
To learn about the potential impact the IoT can have on business, come hear Stowe Boyd speak about it on Nov. 3 at our DX Summit, which will be held Nov. 3 and 4 at the W Hotel City Center in downtown Chicago. Find out more here.