The Problem with the Term Digital Transformation
Executive Summary
- Digital transformation is a misapplied term that has been popularized by SAP, but which makes no sense. There is a significant problem using the word to describe IT implementations.
This chameleon can transform itself. And it can do so without the benefit of any digital technologies.
Introduction
Digital transformation is a common term used in the IT space and, in particular, in the SAP space. It is a recent term and also a highly problematic term. I now come across the statement that some SAP application was implemented for digital transformation or part of a digital transformation program.
So what is digital transformation?
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- This is published by a research entity, not some lowbrow entity that is part of the SAP ecosystem.
- Second, no one paid for this article to be written, and it is not pretending to inform you while being rigged to sell you software or consulting services. Unlike nearly every other article you will find from Google on this topic, it has had no input from any company's marketing or sales department. As you are reading this article, consider how rare this is. The vast majority of information on the Internet on SAP is provided by SAP, which is filled with false claims and sleazy consulting companies and SAP consultants who will tell any lie for personal benefit. Furthermore, SAP pays off all IT analysts -- who have the same concern for accuracy as SAP. Not one of these entities will disclose their pro-SAP financial bias to their readers.
The Definition of Digital Transformation
That turns out to be a much more interesting question than before I looked up the definition. It is essential to see the different aspects of the meaning of digital transformation to determine how the term is presently used.
“Digital transformation may be thought of as the third stage of embracing digital technologies: digital competence → digital usage → digital transformation, with usage and transformative ability informing digital literacy. The transformation stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods.[2] In a narrower sense, “digital transformation” may refer to the concept of “going paperless” and affects both individual businesses[3] and whole segments of the society, such as government,[4] mass communications,[5] art,[6] medicine,[7] and science.[8]” – Wikipedia
So in this quotation, we can see that digital transformation is supposed to lead to something new. Using digital technology allows one to “reimagine,” redesign, transform how something is done, or perhaps how something is used.
The Example of Digital Transformation with GPS and Google Maps
If we take a simple example, we can see how GPS and mobile phones with Google Maps have transformed road navigation.
I recall getting around using maps and guidebooks, and I missed out on exciting things to see. The overall process of folding maps, organizing maps, buying new maps, spilling coffee on my maps, and so on was never all that efficient. GPS demonstrated the superiority of using this transformative technology.
I was an early adopter of GPS and began using a GPS unit with what must have been a 2 inch by 2-inch screen. However, even that primitive GPS unit was a significant upgrade over using paper maps by today’s standards. What always impressed me was the ability of the unit to recalculate the route always. Unlike a route on a map, in which once you switched out, a location had to be reviewed, even the earliest GPS units allowed you to change your trip regularly, and it would adjust. As someone always on the road, the GPS and now the Google Map enabled phone or tablet have indeed been transformative. It is also true that what was previously done by maps and human calculation was activated with digital technology (GPS in this case). Therefore this is a suitable example of digital transformation.
Digital Technology and True Transformation of Tasks
So digital technology can transform, but let us hold that thought for a moment because I want to use the example of the GPS, and the Google Maps enabled phone or tablet as a contrast to most IT implementations.
Let us move to the next quote on digital transformation, as this brings up the topic of how old the term digital transformation is.
“In 1703 Gottfried Wilhelm von Leibniz explained and envisioned the concept that would be known as “digitalization” in his publication Explication de l’Arithmétique Binaire.[9] Initially developed as a base-2 numerical system, representing two values: either a 1 or 0, the system was further developed and complemented by scholars such as Boole (1854),[10] Shannon (1938)[11] and George Stibitz during the 1940s.[12]”
Here we can see that the definition of digital transformation goes way back. 1703 is quite a way back, indeed.
Pre-computers, Gottfried Wilhelm von Leibniz, proposed a binary system concept that is the foundation for how computers store and process data today.
But this cannot be the type of digital transformation that most companies are describing today when they explain that implementation is part of a digital transformation. Moving to a new system that stores and processes data in a binary system already happened decades previously.
The Broader Implications
Let us see another quote on digital transformation to understand the broadest implications of the term.
“Finally, digital transformation is described as “the total and overall societal effect of digitalization”.[14] Digitization has enabled the process of digitalization, which resulted in stronger opportunities to transform and change existing business models, socio-economic structures, legal and policy measures, organizational patterns, cultural barriers, etc.[16]
Digitization (the conversion), digitalization (the process) and the digital transformation (the effect) therefore accelerate and illuminate the already existing and ongoing horizontal and global processes of change in society.[14][15]”
Here the term is used to describe society’s general move towards using digital technologies.
If we think of the different dimensions of digital transformation listed above, only the first dimension can be specific to IT implementations. However, there is a problem with digital transformation, and I want to get into that next.
Digital Transformation in Word Processing
I am currently typing this article on a 7-year-old MacBook Pro. If I were to purchase a 2017 MacBook Pros and use it, would it be digitally transformative compared to what I am currently doing?
No
My workflow would stay about the same, the data would be stored the same way, but I would probably benefit from using a faster computer. But would it make sense to describe replacing an old computer with a new computer?
I recently visited Hemingway’s’ house in Key West. And at the center of his work studio were over nine years, he wrote books that are now considered classics in literature. At the center of the room was a tiny Royal Quiet de Luxe manual typewriter. As a writer who often uses three screens and two computers at once, I am amazed by what Hemingway accomplished with that small machine. All of that great work came out of that single, tiny little typewriter. If Hemingway had lived longer, he would have typed on an electric typewriter. Electric typewriters had many advantages over manual typewriters, but they are only electronic, not digital, in any way.
Charting Hemingway’s Potential Digital Transformations
- If Hemingway had lived into the 1960s, we could have used the IBM Selectric, and that would have been an “electrical transformation” of his writing.
- If Hemingway had lived into the 1970s, he could have used a Wang computer with some of the first-word processing software that used a CRT screen.
Word processing did go through a digital transformation, as the following quotations attest.
“The labor and cost savings of this device were immediate, and remarkable: pages of text no longer had to be retyped to correct simple errors, and projects could be worked on, stored, and then retrieved for use later on.” – Wikipedia
The Degree of Transformation
The effect illustrates the degree of transformation that word processing had on secretarial work and management work.
“In 1971, a third of all working women in the United States were secretaries, and they could see that word processing would affect their careers. Some manufacturers, according to a Times article, urged that “the concept of ‘word processing’ could be the answer to Women’s Lib advocates’ prayers. Word processing will replace the ‘traditional’ secretary and give women new administrative roles in business and industry.”
A 1971 article said that “Some [secretaries] see W/P as a career ladder into management; others see it as a dead-end into the automated ghetto; others predict it will lead straight to the picket line.” The National Secretaries Association, which defined secretaries as people who “can assume responsibility without direct supervision,” feared that W/P would transform secretaries into “space-age typing pools.””
Digital word processing was so transformative that it was difficult to predict how it would change a specialized task of typing and remove it from specialists (secretaries) and distribute it to everyone.
“The article considered only the organizational changes resulting from secretaries operating word processors rather than typewriters; the possibility that word processors might result in managers creating documents without the intervention of secretaries was not considered—not surprising in an era when few managers, but most secretaries, possessed keyboarding skills.” – Wikipedia
But when did the digital transformation of writing occur?
Well, decades ago.
After the 1970s, the distribution of word processing widened quite significantly. But we are now at the point where most of the population has little experience using a typewriter, and they are now museum pieces.
Why Use the Term Digital Transformation Decades After it Would Apply?
A problematic feature of the term digital transformation relates to when this term has begun to be used. The enterprise software space is mature.
Why has this term surfaced at this time? What about previous IT implementations? If they were successful, were they not also “digital transformation?” If it is the case that nothing dramatic has changed other than hardware becoming faster (which is part of a long-term trend that is always occurring) and software seeing a slight improvement. Then why, at this point, are we using the term digital transformation to describe system implementation?
Does, for instance, the increase in the use of SaaS/cloud as a software delivery mechanism mean that software is becoming “more digital” than it was before? No. Whether software is hosted on the customer’s premises, hosted by the vendor as part of a private cloud, or is true multitenant cloud delivery in each case, it is the same amount of digital.
If we look back at the transition from manual computation to using mainframes back in the 1970s, wouldn’t that stage of computer history be more digitally transformative than moving to a slightly faster ERP system or implementing a new CRM system?
Question Around Digital Transformation
After this article had been published for a while, I received this question.
I was wondering how you would describe a digital process being improved in a way that they truly benefit from being digital. As an example, my company sells products to the food industry and has to make nutritional labels. The process was already digital (though not completely) a lab technician does analysis and notes the results on a notepad, he/she then goes to a computer, opens word copies an existing datasheet and fills in the results, saves it to PDF and sends it around to a number of people in the company. One of them saves it to a centralized repository and some fancy workflows make it available to customers that buy this product through a web portal. With this new database, we also implemented error control to make sure everything adds up and that the same products have the same data on all the labels in the different languages/formats. The process could be further improved, our lab technicians are increasingly using digital sensors that could communicate directly to the database skipping the remaining data entry step.
My email is now rather long, this makes this kind of improvements hard to explain to senior leadership with 3-5 seconds attention spans. How would you recommend communicating in these cases?
In this example, some of the parts of the process are becoming more “digital.” However, there is still not a very good reason to use the term digital transformation. Remember that the term was re-coined by vendors and consulting firms, and the vast majority of times, the term describes processes that were already digital.
This gets to another issue. What if a process is made digital but is better off not being digital? For example, who enjoys talking to robot phone services when one calls for customer service? Why is it that companies that often have enormous profit margins can’t afford to employ humans to do these jobs? Many things may be made digital that should not be digital. So this example and many other examples like this undermines the logic where digital is universally preferable over non-digital approaches. Digitalization is not the final arbiter of whether a process is optimal or even good. It is how the process works. Many companies had implemented ERP systems and turned out to be worse off than before the system was implemented. But they can’t back out or change back because they decommissioned systems, refactored the code into the ERP system using the ERP vendor’s preferred language, and would have egg on their face if they were to turn the clock back. In other cases, ERP implementations lead to companies’ decline and to them being purchased by competitors or lead to the leadership in the company being fired.
Before the term digital transformation was misappropriated, the term that was used was systems implementation. Systems implementation was both perfectly accurate and did not attempt to place flowery and mind-controlling language into the mix that essentially served to endorse the software being implemented. As a rule, one should not use terminology developed by marketers or those with no concern for what is true. One should not..
Fill it to the Rim with Brim
and not support the idea that..
“Gillette is the Best a Man Can Get.”
These are marketing jingles that are designed to get into our heads to try to sell decaffeinated coffee and razors. It has nothing to do with what is real. There is fundamentally no difference between these memes and the meme of digital transformation.
A Parallel Example: Why is the Term Democracy Incorrectly Used?
For example, the elites in most countries like to refer to their countries as democracies. However, there are no democracies. Being a democracy would mean direct voting on issues. No country in the world has ever functioned this way, even ancient Athens. At least the story is that the system of participation from the broader population was first introduced. All of the countries that self describe in this way are republics or a republican form of government. The term democracy is used to make the political process appear more inclusive than it is. This serves to endorse the elite decision without actually going through the process of getting widespread approval. Then the elites turn back to the citizens and say..
“look, you all voted for all of this.”
Also notice that, for instance, US media entities continually state that the US is a democracy. This is because these entities are part of the establishment and have a self-interest in promoting this false construct to their audience.
Accepting the False Constructs of Marketeers
When one uses what a “term of propaganda is,” one unwittingly accepts the marketeer’s false construct or the propagandist. This is called perpetuating the lie. Remember that when Oracle or Deloitte uses the term digital transformation, they cannot accurately describe anything. They are using a term that they think will help them deceive their audience into buying software or services from them. Furthermore, if a person uses the term digital transformation, they are either buying into the false premises or not thinking through the word they use. An important part of language is understanding the words that one uses. If one uses words that they hear but which they do not actually know its meaning, this is not a person who is critically thinking about what they are saying.
How to Explain the Benefits of Systems to Executives
To answer the question specifically, executives can describe the benefits without using the inaccurate term digital transformation, but explaining what happens is better after the change is made. When projects are funded, they will typically have the benefits statement listed in the project tracking system and read aloud during the approval meeting. It would be extraordinary for the project to be approved based on it being called a digital transformation.
Conclusion
The term digital transformation is a throwback to an age when digital technologies transformed processes. Still, at this point, it makes little sense to use it as a term as what is currently happening is that new hardware and software are merely replacing older hardware and software.
The term digital transformation, as it is presently used, is a term of propaganda. The term does not carry any information but is an attempt to place a spin on an initiative. For example, as soon as a company states it is implementing software, it is already understood that the software will be digital. It is unnecessary to add the flourish that it is part of a “digital transformation.” Therefore, users of the term are not describing something as much as they are promoting something through a term, which is an undeniable redundancy in language.
If you intend to purchase an automobile, it is well understood that you want to use it for transportation. One does not announce to one’s friends and family that one intends to purchase an automobile for “transportation transformation.” That term may have made sense back in 1910 if you were buying a Model T and when you were replacing your horse. But over 100 years later, it is unlikely that your previous vehicle of transportation was a horse and that this new car you are purchasing is your first experience with something that uses wheels to get around.
So what will happen with the term digital transformation?
My prediction for the term is that its usage will continue until it gradually runs out of steam, and it will be replaced by another term that seems sexy and topical. A big part of attending the best schools, going to conferences, and participating in business meetings is merely learning the terminology to use. Using the term digital transformation is an excellent way to show that you are part of the “in-crowd.”