Three digital phases

The terms digitalization and digital transformation are a bit confusing. Perhaps we should take a moment to clarify these terms. A better understanding will help us plan our work later. It helps us to ask more specific questions.

Three digital phases and what happens next

There is a good article by Peter Verhoef and others that describes the triggers, phases and effects of a digital transformation (/1/). I think the article is a good introduction to the topic.

Why is the topic of digitization so important right now? The authors give a good answer:

• There are new digital tools that we simply didn't have before.
• This means there are new competitors who provide their services digitally. This is a new competition that has not previously provided its services digitally.
• In addition, user behavior has changed. When you use other services digitally, you place demands on companies and institutions that have not previously done so.

The authors of the article describe three phases. We can find a similar description in other place.

• Digitization: this refers to the conversion of analogue information into digital information. Texts become searchable PDFs, vinyl records become MP3 files, etc.
• Digitalization: If the information is available in digital form, we can start to change our business processes. Digital is more independent of specific places and times. We will probably become more efficient and faster for various reasons. Essentially, the processes remain the same. The company remains essentially the same.
• Digital transformation: This term describes how a company changes due to its digital possibilities. A carpenter may become a design company that no longer produces furniture at all. The company concentrates on selling furniture designs.

I think the topic of A/D conversion is over in my view. There are enough processes to bring information and things into digital formats.

If an institution needs digital advice, we can ask more specific questions: do you want to digitalize your business processes or do you want to transform yourself as an institution?

• When digitalizing, we take on the important delivery processes and ensure step by step that everyone involved can work on the processes from any location at any time. This is the prerequisite for the next stage. 
• At some point, a company in the private sector may ask itself what value it delivers to its customers. It could be that it sets new priorities and abandons certain processes and services. This transforms the company. For public administrations, this scope is probably limited, but not ruled out in principle.

What does this mean for the planning of such projects?

Digitalizing processes

When digitalizing, two questions are important to me:

• Can everyone involved agree on common processes?
• What tools do we use to complete processes digitally? How do these tools make us better and faster?

Without jointly responsible processes, everyone can do what they want. If we want to take advantage of digitalized processes, we need more common standards and rules. My process only works if the others join in.

• Where does a process start, and where does it end? What are the triggers, what are the results?
• What structure do we need for the most important object files?
• Who maintains the tools?

At some point the question arises whether we have to handle all the steps ourselves or whether we can outsource and reintegrate parts of this service chain.

Change an organization

At some point, perhaps everything will be digital. In an ideal digital world, every step can be outsourced to another location and integrated again. Somewhere, there is at least one specialist for a specific step in your own service chain. Now entirely different questions arise:

• What is the core of our own organization? What are we actually paid for? How should we spend our time?
• Do we have everything we need to serve this core? What gaps do we need to fill? Where do we need to develop to achieve this?

Now we not only have responsibility for our joint processes. Now we have - it may sound pathetic - responsibility for each other. My own future depends on the development of others. Their future depends on me continuing to develop.

A static organization no longer makes sense. We have to have routines to question the design of the organization again and again. We need a framework for asking ourselves these questions without getting bogged down by them.

So in the beginning, things become digital and changeable. Things can be transported and recombined regardless of time and space.

After the digital transformation, this also applies to our own organization.

Link

• Peter C. Verhoef, Thijs Broekhuizen, Yakov Bart, Abhi Bhattacharya, John Qi Dong, Nicolai Fabian, Michael Haenlein: Digital transformation: A multidisciplinary reflection and research agenda, Journal of Business Research, Volume 122, 2021, Pages 889-901, ISSN 0148-2963, available at https://www.sciencedirect.com/science/article/pii/S0148296319305478