The 4 Types of Digital Transformation

Every executive says digital transformation is their top priority — but the term means different things to different people. This framework identifies four distinct types of digital transformation, giving leaders a common language for what they're actually trying to achieve.

“Nothing is a greater priority than the digital transformation of our business…” We hear this phrase every day in conversations with executives. The reasons are clear: digital technologies are enabling radically new ways to deliver value to customers, altering competitive landscapes, and changing the underlying economics of markets. Technological change is nothing new—but this round of change is happening at a rate faster than ever before. Some executives cite the risk of disruption as the impetus for transformation; that risk is certainly real. But while new technologies may threaten established businesses, they can also create unprecedented opportunities. In fact, an increasing number of executives are more concerned with missing opportunities to grow, than being forced into oblivion. It is not digital disruption that impels companies to change, it is digital “FOMO” (Fear Of Missing Out) . In this context, it is surprising that most corporations still view digital transformation too narrowly. First, digital transformation is not monolithic. There are four types of digital transformation: business process, business model, domain, and cultural/organizational. We often see corporations focused solely on process or organizational transformation. Failure to address all four types leaves significant value on the table. Second, the multi-dimensional nature of digital transformation means execution must be a team sport , involving not only the Chief Information Officer (CIO) or Chief Digital Officer (CDO), but also Strategy and Business Unit leadership and it should be championed broadly by the CEO. Third , too many corporations erroneously believe digital transformation must begin with cultural/organizational transformation. Teaching the organization to be more innovative, agile and digital is indeed important, but we see greater success among corporations that first pursue business transformation initiatives. There are significant opportunities being created by new tech

By Andy Annacone at TechNexus Venture Collaborative