Digital Transformation: A Control System for Innovation

6 minute read | 01 Dec 2021

By Raja Sekhar

Digital transformation is the adoption of digital technology to improve business processes, create greater value for customers, and reduce the barriers to innovation. To be a player in the digital transformation market, companies that provide the technology that facilitates digital transformation must have hopped on the digital transformation bandwagon themselves. It’s table stakes.

The idea of digital transformation has been around for quite a while. But like the web, big data, zero trust, customer 360 and other technology memes, it’s a chimera — continuously changing. In this blog, I’ll explain how Jade Global views digital transformation, transformation goals, and how undergoing transformation can position companies for success.

Digital Transformation 1.0

For many large, decades-old companies, digital transformation was necessary to compete and survive. They began in an era where operational systems were all on premises and required a lot of manual modifications and maintenance as market demands shifted.

These companies have slowly streamlined and automated processes, moved workloads to the cloud, and integrated systems via integration platform as a service (iPaaS) technologies. Such transformations — and the cultural changes they’ve required — haven’t been painless, but they’ve been beneficial. And they’ve prevented “extinction” narratives like the legendary fall of Blockbuster Video to Netflix. (There’s actually one Blockbuster store left, located in Bend, Oregon.) These companies have emerged through the gauntlet of Digital Transformation 1.0.

Companies born in the last decade (2010-2020) were built on platforms mostly unencumbered by legacy technologies. For them, the level of process automation and data integration across departments was easier. They are often called “cloud-first” companies. For them, adapting new technologies as they emerge to further improve agility and market responsiveness is easier. You might say they’re in Digital Transformation 1.5, heading to 2.0.

Of course, to some extent this is throwing terminology at the wall to see what sticks. There are no ISO standards for digital transformation. It’s not clearly defined and certified. But what is clear is that digital transformation is a moving target — and a company’s reach will almost always exceed its grasp.

What Does Constantly Evolving Digital Transformation Look Like?

To get an idea of how digital transformation looks from the outside, consider companies like Google, Amazon, and Facebook. These companies probably introduce new features and functionalities to their platforms 100 times a day and, as a user, you have no idea it happened (unless it’s something that takes the platform offline for 7 hours with no warning!) Or maybe you’re doing something and a little box pops up and says, “Try X,Y,Z. We’ve made it faster and easier.”

That’s Digital Transformation 2.0. In this evolution, companies automatically add and refine features based on direct customer feedback and data about how their products are used. And they do it in a way that doesn’t damage the user experience.

All the aspects of change management, release management, and DevOps happen behind the scenes, while users operate normally. Everything is happening at a speed that’s significantly faster than it was previously.

Digital Transformation and Shifting Customer Expectations

Digital transformation projects are usually lengthy and complex. Most companies need help to pull them off successfully. Typically that help comes in the form of a systems integrator (SI) or consultancy — an outside perspective from a team that has the experience and skills very few companies have in house.

One aspect of digital transformation engagement that has changed is customer expectations. Customer satisfaction is no longer the benchmark. Customer satisfaction is simply achieving the goals and consistently delivering the value, the end results you promised. Certainly, end results matter, but what did the customer experience on the way to those end results? You may deliver a project on time and on budget, but did you put the customer through six months of pain to get there?

I was having a conversation with a customer while a project was in a difficult phase. Nevertheless, I was confident we would turn things around. The customer, who was the head of IT, asked me, “Do you think all’s well that ends well? Or do you think the experience along the way matters?”

He told me that the users his IT organization serves cared a lot about the experience along the way. People entering the workforce now have been raised on iPhones and Androids, touchscreens, and intuitive, frictionless interfaces. They want the same types of experience when they’re dealing with their partners, their suppliers, and their colleagues.

Frictionless engagement must now be part of the project requirements of a digital transformation initiative. The need for “ease of doing business” extends to a company’s employees and all its business partners. If you can’t (or don’t) meet that requirement, you may find yourself with fewer business opportunities, or paying a higher price.

Digital Transformation Is the Control System of a Modern Enterprise

I am an engineer by training, and I have always been fascinated by control systems. Control systems are closed loop systems where there’s an input and an output. As the input changes, so does the output. A feedback controller maintains output at the desired state.

I see digital transformation as a control system for the enterprise. Once you’ve achieved Digital Transformation 1.0, you create a closed loop system where you’re always changing, improvising, improving, and refining. Using the data and analytics available from operational systems such as CRM and ERP, the control system becomes a funnel for innovation and continuous transformation.

You apply this control system to all aspects of your business. This includes your supply chain and how you market, produce, sell, fulfill, and service your products. It also includes your financial processes and the way you recruit, onboard, and train employees. The control system supports the framework of a flexible business model that focuses on the best outcome at the lowest possible cost.

Think for a moment about Tesla’s vision of a fully self-driving car. The car’s control system monitors a stream of data to adjust in real time to weather, road conditions, traffic, etc. Likewise, the control system of a company should allow it to “drive itself” for many of its operations, quickly adapting to changing market and economic conditions.

When Jade Global works with customers, our objective is to help them create this control system via digital transformation. That transformation may be in marketing, sales, finance, or the supply chain, but ultimately it is company-wide.

Read our Boomi partner solution brief to learn more about Jade Global’s high tech solutions for digital transformation.