In recent years, the term “digital transformation” has become a buzzword across the business world. However, as more and more companies adopt digital tools and technologies, it’s becoming clear that the term no longer accurately describes the reality of most businesses. In truth, the vast majority of companies are already digital to some degree. We use smartphones, we all email, calculate in excel as well as numerous other digital activities.
So what’s the problem with calling it “digital transformation”? For one thing, it implies that there’s a clear dividing line between businesses that are “digital” and those that are not when in reality that line is rapidly becoming blurred. It also implies that companies that have yet to fully adopt digital technologies are somehow “behind,” when the truth is that every business is on its own digital journey. Where you are on that journey will change from business to business and even industry to industry but it is a journey we are all on.
Instead of focusing on “transformation,” we should be focusing on digital “evolution.” The goal should be to help companies evolve their digital capabilities at a pace that works for them so that they can continue to thrive in the digital age.
This is particularly important for industries like energy and finance, which are facing rapid change and disruption.
For example, in the energy industry, we are seeing a rapid shift towards renewable energy sources like solar and wind power. This is driven in part by concerns about climate change, but it is also driven by the fact that these sources of energy are becoming increasingly cost-competitive with fossil fuels. As a result, traditional energy companies are facing a major challenge: they need to adapt and evolve to stay competitive in this changing landscape. Some are doing this by investing in renewable energy projects, while others are acquiring renewable energy companies. Still, others are looking to develop new business models, such as offering “energy as a service” rather than selling energy itself.
Oil and gas companies, in particular, are facing a difficult time in this scenario. As the world is moving towards cleaner and renewable energy sources, oil and gas companies have to think about alternative ways to sustain their business in the future. Some are investing in new technologies, such as carbon capture and storage, to reduce their environmental footprint, while others are diversifying into different areas such as petrochemical products, or even renewable energy generation.
However, this doesn’t mean that oil and gas companies will be going extinct anytime soon. The world still needs fossil fuels for transportation and many industrial processes, for the foreseeable future. And some experts predict that the demand for oil and gas will remain stable for decades to come, especially in developing countries. But the key for oil and gas companies is to evolve and adapt to the changing energy landscape and be ready for a future where fossil fuels play a smaller role.
In the finance industry, we are seeing a similar pattern of rapid change and disruption. New technologies like blockchain and digital currencies are challenging the traditional models of banking and finance. This is making it increasingly difficult for established companies to compete with new, digital-native players. Traditional finance companies must evolve to compete in this new environment, whether it be by investing in blockchain technology or experimenting with digital currencies.
Both of these examples show that digital evolution is not just about adopting new technologies, but also about rethinking traditional business models and processes. To stay competitive in a rapidly changing digital landscape, companies need to be willing to experiment and take risks. They need to be agile and adaptable, and they need to be able to learn and evolve at a rapid pace.
Moreover, Digital evolution is not just the responsibility of IT departments, but the entire organization. In fact, there is an argument to had that IT should not be the owners of a digital evolution project. They are undoubtably key delivery agents, but the business itself should own and drive. Businesses need to be ready to adopt digital technologies at all levels, from the front office to the back office. This requires collaboration between different departments and a shared understanding of the organization’s digital goals. This can also be implemented by creating a digital culture within the company where employees are encouraged to experiment and learn new digital tools.
Another key aspect of digital evolution is data. As more and more data is generated and collected, it’s becoming increasingly important for companies to be able to analyze that data and make use of it to drive business decisions. This requires investing in data management and analysis tools and building the necessary skills within the organization. Furthermore, companies need to ensure data privacy and security to protect the various types of sensitive information in the company and its customers.
While these examples are drawn from the energy and finance industries, the principles of digital evolution apply to companies across all industries. To stay competitive in today’s digital landscape, companies need to be able to evolve their digital capabilities at a rapid pace. This requires a focus on continuous learning and adaptation, a willingness to experiment and take risks, and a commitment to building a digital culture within the organization.
In these articles I generally include a joke but as we kick off 2023, let’s end on a note of optimism and encouragement. The digital landscape is constantly changing and can be overwhelming, but the key to success is to embrace evolution, stay adaptable, and keep learning. Even with all the challenges, it is an exciting time for businesses to innovate and create new opportunities. By keeping a positive attitude and an open mind, businesses can not only survive but thrive in the digital age.
In conclusion, the term “digital transformation” no longer adequately describes the reality of most businesses. Rather than thinking in terms of transformation, companies need to focus on continuously evolving their digital capabilities at a pace that works for them. This is particularly important for industries like energy and finance that are facing rapid change and disruption. So let’s evolve, not transform, with a can-do attitude and an open mind.
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