Digital transformation is not an option

Digital transformation is not an option

July 17, 2016 Insight 2

In the good old days of the 2000s, digital transformation was for techies and new kids, the so-called early adopters. Not so anymore. If your business isn’t looking at comprehensive digital solutions on a truly transformative scale, then the odds of survival are stacked against you. It’s time to stop asking “What if…?” and start asking “When?”

“Digital transformation” has achieved buzzword status. More often than not, it’s misused, misinterpreted and misunderstood. We talked to Rackspace’s Chief Digital Technologist Mike Bainbridge, whose focus is on helping businesses realise their digital potential and become more successful online. That’s what we mean by digital transformation.

Digital transformation is about shifting your focus — from what is to what could be. It means understanding how technology can deliver the experiences your customers expect. It means going beyond websites and apps to improve every aspect of how you do business with your customers.

Why now?
Technology is advancing exponentially. Experts say we’ll make more progress in the next 20 years than the last 300. As our possibilities expand, it’s getting harder and harder to imagine the world in five years’ time, let alone plan for it.

But one thing is certain: You can’t bank on the competitive advantage you have today. From here on out, you’ll always need one eye on the future. “If you don’t have a digital strategy, then you don’t have a strategy,” declares Bainbridge. 

Transformation or disruption?
More and more, the alternative to transformation is disruption. And no one wants to face that. Digital disruption is what happens when the incumbents get lazy and take their eye off the ball. It’s outside forces acting on you, instead of being proactive and leading the way.

Think taxis vs. Uber. Sure, taxi companies could have developed their own digital interfaces and evolved their model. But they didn’t. So outsiders moved in. For the time being, that’s how digital disruption seems to work. New business models are emerging, but not from the established players. The big winners are often new entrants. So transformation isn’t just about growth, it’s about survival.

Products or services?
The other lesson to learn from recent high-profile digital disruptions is that the businesses of tomorrow are service providers, not product owners. Airbnb doesn’t own a single property, Spotify doesn’t produce any music, and Netflix doesn’t sell you its content. We’ve entered the age of the service economy and it’s all about delivering, not selling.

The businesses that will thrive are the ones who understand and fully embrace digital transformation. True transformation is comprehensive. It’s big-picture thinking. And it must be lead from the top down, with every department focused and aligned. Your IT department will be increasingly important as they spend less time on infrastructure and more time on revenue-generating streams. But if you’re looking to IT to lead the change, then your C-suite is shirking its responsibilities. 

We don’t mean to scare you. Though it’s okay to be a little bit afraid, if that’s what keeps you moving forward. In the end, always remember that transformation is a journey. There’s no finish line to cross. The goal is simply to keep on course in an ever-changing landscape.

Follow Mike Bainbridge, Chief Digital Technologist at Rackspace: @Hosting_Mike

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About the author

Danny Beijert
Racker since 2011 - Danny has experience in both Sales and Marketing with Rackspace EMEA. He has a keen eye for design and a critical mind that questions the status quo. He breathes social, loves building long-lasting relationships and understands well the role that compelling creative plays.


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