The Importance of Digital Transformation

By guest columnist Paul Hoskins, Precedent

The phrase “digital transformation” may only have existed for the past year or so, but over that time it has come to encompass just about every idea for a business that has a digital aspect. However, if understood properly and adopted, it can ensure organizations can remain competitive and relevant.

The journey to true digital transformation has three stages of maturity: reactive, strategic, and transformational.

• Digitally reactive is about the tactical delivery of digital and the model that has formed the backbone of online business for many years. This is what has enabled business to thrive today.
• Digitally strategic is a much bigger step. It involves incorporating digital at the very beginning and normally involves things like big data or a “mobile-first” approach. The products or services sold remain the same, but changes are significant and longer lasting, allowing business to thrive against their competitors next year.
• Digitally transformational is the innovation of business, allowing you to understand what technology can allow you to do that you might not have been able to do before. It’s a board-level program, which if invested in properly, will enable businesses to stay relevant not just for today and next year but for the next 20 years.

Reactive and strategic are where the bulk of any organization’s resources should go, but they should run parallel to what sits at the very core of the business – the innovation channel. It’s more experimental, less evidence-based, and can never be constrained by the business as a usual approach, but even so, it is totally intertwined with how things are currently done.

While I see some terrific work being done by some of the country’s largest companies, the reality is that nearly all innovation in terms of new business models and services comes from the smaller, more nimble organizations that have a start-up mentality and are more willing to innovate and take risks.

One of the key reasons stopping many organizations from thinking seriously about digital transformation is management style. To undertake a program of transformation, you need to constantly evolve and be willing to make changes. It involves having two management styles co-existing together: one evidence-based, budgeted, and structured, the other open-ended and experimental. But vitally, the outputs from each need to intertwine and work together.

While smaller organizations have an easier job of changing processes and introducing new ways of working, we have been working with a number of larger organizations, in the U.K., Australia, and here in Hong Kong that understand the need for investment in a program of innovation and change, and realize that embracing the digital opportunities available to them will ultimately safeguard their business for the long term.

In today’s world there is no such thing as a non-digital business. All businesses should be aware that digital – especially in the sales and communications arena – is becoming totally intertwined with the organization’s ability to deliver the customer experience that is now demanded by the consumer. But in order for a business to succeed and implement change, they can’t rely on their “digital people” to “just do it” – it needs to be owned by the board.

There is often a negative connotation attached to change, so what’s vital in a transformational program, and what we spend a lot of our time helping our clients with, is that early communication and planning stage and inspiring a team with “the art of the possible.” Organizations that have a desire and hunger to change and that importantly adopt an internal digital culture will reap the rewards.

As founder of one of the first digital agencies operating in the U.K., Paul Hoskins was working at the forefront of digital with brands such as the BBC, Shell, and MTV. Now, 25 years on, Precedent is a full-service international digital agency, with a strong reputation for strategic thinking. Hoskins is now based in Hong Kong, leading their digital transformation program in the Asia-Pacific region, helping large organizations at board level understand how they can use technology to re-engineer their operations to better serve the needs of their audiences. He is also heavily involved in the digital insight reports produced by Precedent.

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