The Biggest Opportunity in Digital Transformation: Defining it

Nearly every SaaS company wants to ride the wave of “Digital Transformation”. It ecompasses nearly all the previous IT buzzwords – Big Data, Big Data Analytics, AI, among others – under one umbrella buzzword. Every Seller proclaims to enable Digital Transformation, and every Buyer talks about their path of Digital Transformation. There are dozens of conferences every year on Digital Transformation. 

But what exactly is Digital Transformation? What business goals does it enable? 

The market’s reliance on this buzzword reminds me of Jeff Bezos’ warning about managing by proxy:  

“Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right.”

While Bezos’ comment refers to operations, the framing also applies here. “Digital Transformation” has become a proxy for the business outcomes companies actually need.  Yet it's worse than that. Operational proxies are at least well-defined processes. “Digital Transformation,” in contrast, is an idea with no clear connection to business outcomes like increased revenue, higher profits or more customers. 

Here is how one CIO of a Fortune 100 company describes Digital Transformation at his organization.  This is not not a criticism of this executive, but an indication of how the market thinks about the opportunities offered by technology.  Does it mean anything to you?

The companies that are hurt by this type of framing are the smaller startups hyper-focused on generating real value through technology.  Their products will feel small to Buyers like the Fortune 100 CIO above, who are spoon-fed to believe the goal is: “collaborating in product-aligned agile teams to deliver strategic capabilities….”.  

This happens with regularity in technology sales (“The Blockchain will solve this”), leaving Buyers and Sellers frustrated. Buyers don’t get actual results, creating a distrust of Sellers, and Sellers are forced to sell into a market that prioritizes an idea more than outcomes, limiting sales.  

Fortunately, there is a clear opportunity for Sellers to use this situation to their advantage.

Define the market opportunity that Digital Transformation represents for your customers. With specificity. With clear business outcomes tied to your Buyers’ goals. With a defined process to achieve those goals (that includes your product, of course).  

This enables Sellers to (i) take control of how Buyers perceive the market rather than be subject to Buyers’ notions of “digital transformation” and (ii) stand out amongst competitors as the only vendor that actually understands Buyers and their goals.  

“If you don’t like what’s being said, change the conversation” - Don Draper, Mad Men.