Five Misconceptions about Digital Transformation

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The chances are high that COVID’s effects on the world will drive organisations to change their operations to be more digital.

When I was first confronted with a digital transformation client question, I approached it the way I always do: by educating myself with available publications. The results were disappointing. There just wasn’t enough practical guidance available.

More importantly, what I did read did not resonate with what I was finding in practice. It seemed that what was available was full of misconceptions. New areas of business practices frequently have this problem; time simply hasn’t had the chance to correct misconceptions through experience.

This is the article I was searching for during my initial discovery phase. In it, I lay out five important misconceptions about digital transformation that I have encountered when advising companies about the subject. Hopefully they will help you.

First, I’d like to address a general misconception

Digital Transformation is a separate “thing” that’s added to business model.

Transformation isn’t just adding extra tech to existing business strategy. Transformation is an ongoing process; one that may require changes to maintain success. An enterprise architect is a person in charge of your company on a day-to-day basis. Due to the role they play, enterprise architects are also a critical element of your firm’s digital transformation and overall strategy.

Misconception 1: Marketing Transformation is a tech-implementation thing

Implementing tech is relatively simple. Once resources are secured, the work (usually) gets done. This part however does not touch upon people and processes. Technology can be powerful, but without the proper utilization it’s not. Projects aimed at transforming marketing often find themselves pending too much time on technologies and too little on how in practice you extract value from them: who are the people that will be working with it? Through what structures, governance and control mechanisms? It needs to be made everyone’s job through an accountability framework.

This is reinforced by the fact that, often, marketing transformation is assimilated to ‘online’. ‘Digital transformation’ in its core is the application of processes and technical elements of the internet era onto business operations. Alignment and integration of retail and ecommerce is important if you want to avoid cannibalizing existing audiences, and it is a common pitfall during Marketing Transformation. You want to break down silos to share customer insights.

Misconception 2: Marketing transformation happens when you implement agile teams

‘Agile working’ used to be something aspired to by big corporations, inspired by new, smaller firms acting at a high and responsive tempo. It’s a good way of doing things but it’s operational in its nature. It needs a bigger goal to work towards. Transformation is too comprehensive to move without having a clear sense of direction. A vision.

You need a vision, a profile for the transformation. A ‘what’ we are changing into. And a ‘why’ we are doing that. You need a way for ‘agile’ to work towards. Success has been seen by using a compelling message associated with the transformation vision. A ‘from’ and ‘to’ situation is written down, accompanied by its reasons. The fundamentals. This serves as your guide for decision-making and contains the task at hands it’s thresholds. It is something the organization can believe in.

Misconception 3: The goal is to increase (digital) marketing spend

An increase in marketing spends will sound like music to the CMO’s ears. And so, in a profound amount of transformation cases, this quickly becomes a shiny side-goal that unconsciously grows into a dominant part. What every marketing transformation project should periodically re-assess is: ‘are we delivering back to the business?’ The starting fundament must contain a clear understanding of the appropriate metrics and their current state to assess market growth.

Marketing spend is an appliance to realise business goals. You must be aware of this at all times. A transformation at the core means that there is a need for change. A change does not imply an increase in any form. In fact, it might equally mean higher efficiencies. If it does not deliver back to the business, projects are bound to run into barriers.

Misconception 4: It’s only relevant for a small selection of brands and categories

There is this vast misconception that transformation is just for a few avant-garde marketing operations. The truth is that most brands will, at some point, have to accept that change is essential for growth or to keep up with competitors. This makes perfect sense. There has been a lot of development in the past years and although many ancient business principles are still relevant, the evolution of technology driven by the internet era has drastically influenced aspects like product offering, client satisfaction and creative experiences. Organisations tend to start adoption by logically building these applications around the core business operations. Usually too slowly.

This works well until the point that new category entrants enter and build around digital applications: an inside-out manner. Don’t get me wrong, it makes sense to hold-on to profit-driving legacy principles, as long as you are set-up for adaption. Despite the industry or brand position, the chances are high that sooner or later your marketing operation will have to start thinking about challenges like becoming a more client-centric marketing organization, leveraging automation principles or leveraging the digital eco-system in an optimal way.

Misconception 5: Transformation is the same as evolution

When I started to research transformation, definitions were hard to find. The chances are that when you ask a dozen of subject-matter experts, their answers vary. My attempt, built up by practice and theory got me to this:

“Marketing transformation is a shift in a company’s marketing structure, systems, operating model, culture, people, and/or roles driven by technological opportunities to cause business growth. It is re-envisioning the marketing operating model by restructuring and often contains an element of changing marketing software systems.”

In its essence, transformation implies a dramatic change in form or appearance. It’s extreme, radical, and big. Less hyped, more common, and more practical is evolution: to have developed from earlier forms. The constant change of adding and discarding elements in a marketing operation set-up.

Their boundaries are hazy. When is an evolution big and fast enough to be a transformation? More importantly, why does it matter? It doesn’t. What matters is what it comes down to: solving marketing-related business needs by applying the process and technology of the internet era.

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