Digital transformation is not "in-house consulting", or is it?

Many established companies constantly face threats from faster and smarter startups. This challenge is a familiar narrative: newcomers disrupt traditional players by capturing dissatisfied customers experiencing specific pain points with established market names.

My own experience illustrates this shift—I've lived in three countries over the last four years and long ago abandoned cable subscriptions due to the hassle of canceling and reconnecting them (by phone) every time I moved.

I suspect many share similar sentiments, prompting them to switch providers based on such minor yet impactful aspects of their consumer journeys.

Corporations recognize this trend and swiftly respond to appease stakeholders. The common solution? Establishing a middle office known as "Digital Transformation" or “D.T”.

But what precisely is "D.T."? I aim to openly discuss this here, drawing on my experience as a trained observer and former Digital Transformation Director to offer insights into what it might be and, crucially, what it is not.

While those involved in "D.T." often boast a consulting background, considering Digital Transformation as a form of "in-house consulting" is a misguided perspective when considering the transformational responsibilities within its domain.

An effective D.T. department should deliver quantifiable added value to the company. This involves:

1. Reducing inefficiencies by adopting digital alternatives to traditional activities.
2. Enhancing decision-making processes through the strategic use of data analytics and AI.
3. Leading innovation in digital business models with a customer-centric approach. In this regard, Marketing/Sales should take the lead, recognizing that customer experience (not technology itself) is key to success.

To enable digital transformation, the D.T. office will need:

a) a team with "skin in the game": P&L responsibility and an independent budget, apart from IT's budget.

b) a robust innovation methodology. I mean, real analytics and solid conceptual frameworks, not just some random sessions ending in post-its on a wall here and there.

c) high-level support from key areas, HR and IT being mandatory sponsors.

Without these components, digital transformation becomes a mere PowerPoint exercise, regardless of sponsorship from the CEO or a board member. The principle here is clear: structure must align with strategy.

At its core, Digital Transformation is organizational transformation. Achieving this goal goes beyond inspirational storytelling and flashy AI-generated slides, especially in large incumbent companies.

If this scenario resonates with you, let's continue the discussion. Leave your comments here.

In my next post, I'll share some insights into the methodology that helped me navigate the complexities of Digital Transformation, even in the absence of a "global playbook" for D.T.