Digital transformation consists of many changes that are going on right now. The authors of the book Digimuutos (Digital Transformation) Kati Lehmuskoski and Timo Savolainen list the changes:
- platform economy
- big data
- artificial intelligence
- social media
- robotics and automatisation
- virtual and augmented reality
These disrupt industries and services such as transportation, banking, learning and communications.
In the transformation, it is important not to focus solely to information technology but instead innovative business models and services. IT is only a tool for the change.
Platform economy as motor of digital transformation
Platform business models represent the cutting edge of digital transformation. Platform economy has made companies to open up their services in different platforms, for example in Google Play or App Store.
The companies have to ask themselves on which platforms they better serve their customers. For example if you serve Asian tourists in the market place in Helsinki, it might be wise to use Ali Bay app for payments, because those tourists are using that platform.
Communication is a typical platform industry these days. Giant platforms, such as Facebook and YouTube, compete on who will win the hearts of the users and who will fall in the future.
You cannot control the change
The driving forces for the digital transformation, according to the authors of Digimuutos, are changes in:
- laws and regulations
- company’s strategy
The only thing on the list a company can control is its strategy. When everything is changing in your environment, you have to change, too, although it is not known where exactly the change is going to take you.
Lehmuskoski and Savolainen interviewed 10 leaders of Finnish companies that have successfully transferred their businesses to digital. The leaders say that the goals of the transformation are:
- better customer experience
- competitive advantage and growth
- new products and services
- change in the organisational culture
The most difficult is the change in the organisational culture and learning new ways to think and do business.
The importance of change leadership
The digital transformation is all about change leadership and putting the change into practice. The change might be experienced as threat by employees. There might be stress or even fear. According to Simon Sinek there are four gates for personal change.
You are asking if the change is a threat for you. It is important to know for example if one’s job is in danger. After the person knows the answers to the questions of the first gate, she can think more clearly about the change.
Secondly, leaders have to listen to people’s questions about the change and answer them honestly. Show that you care for your employees.
On the third gate the employee is considering whether the change has anything to do with her or is it for example a job only for the IT department. This is an important phase to make people feel involved.
When people have gone through their personal changing gates they are ready to accept the change and rationalise their emotional decision to join in the change.