How a heated discussion with a business partner helped Mark Hoffmann come to understand the true meaning of 'digital transformation.'
As a technologist and executive, I had long struggled with the term "digital transformation," because everything my teams did was digital. Then, a few years into my position as CIO, I had an epiphany that redefined what digital transformation really means - to me and to my business partners.
The catalyst for the epiphany was a heated discussion with one of my fellow executives, a bright and technically savvy person. He lived and breathed the customer-facing end of our business, yet did not understand the complexities of developing and managing our software and products.
The disagreement centered around a request to incorporate new functionality into our software that ran counter to everything else it was designed to do. At one point, he made the profound statement that "there are only three rules in our line of business: exceptions, exemptions and exclusions." To this I replied that "there are only two things in computer engineering: ones and zeros!" I concluded by saying that when he could communicate his needs in ways that could be turned into binary results, we could deliver what he needed. Needless to say, we parted feeling a little more than frustrated.
The primary driver behind the emotion of the conversation was our product history. From my point of view, our product, a successful, industry-leading money maker, was made rock solid through many years of blood, sweat and tears. Getting to this point had required me and my team to spend a lot of late nights, have painful conversations, make gut wrenching decisions, and face angry customers when we made mistakes. In addition, the product had grown so large that it was difficult and risky to make large changes. For my partner, the issue was simply that he needed this functionality to keep driving the product forward.
The customer was right
But that night, I realized that my partner’s perspective was right! It was a pivotal moment for me. I realized, too, that, as the head of product engineering and technology, I was not setting the right example for my teams.
Our company is known for delivering innovation to meet the needs of customers. My partner had foreseen a change in the market, resulting in a request that would be difficult to fulfill. Perhaps he had not been able to clearly articulate what was needed. However, the art of accomplishing difficult tasks before there is complete clarity is what we do in technology, especially in software engineering. It was my job to deliver.
Digital transformation seen anew
That night, my definition of digital transformation changed. It moved beyond the definition I’d formed based on my prior experiences simply migrating manual and paper-based processes into automated and digital systems. The definition of digital transformation became about empowering the business with technology solutions so we could continue to win.
In the years that followed, we made changes to our products that included re-engineering our software to be more flexible and adaptable; consolidating, modularizing and separating code to reduce technical debt; and adding support for APIs that connected us to other systems more seamlessly. We modernized our development platform, tools and capabilities, and instituted agile development processes so we could zero in more quickly on what the business and the market needed.
The transformation went beyond our products. Organizationally, I set my team to task to improve our employee experience by upgrading and modernizing our infrastructure. This included virtualizing and upgrading our hardware, upgrading our ERP and CRM systems, our telephony, network, and WiFi; adding disaster recovery and remote access capabilities, as well as moving core technologies to the cloud. We widened the transformation to include upgrading data security, and adding ecommerce, IoT, and business intelligence capabilities to further enhance the customer experience.
The results were remarkable. During the next five years our business grew at an average of more than 35% annually. The motivation and productivity on my team and throughout the company increased as did our customer satisfaction. We introduced more than two dozen new products to the market. We landed contracts with several of the Fortune 10 companies and were ultimately able to sell the company to private equity, earning ourselves a very healthy earnout.
What I learned about digital transformation
The lesson learned for me was that digital transformation does not mean taking manual and paper-based processes and automating them. In a nutshell, it means finding, providing and leveraging technology solutions that enable the business to gain and maintain its competitive edge.
Digital transformation also means:
- Understand the current market and the business operations to meet their needs.
- Cultivate flexibility to mitigate the uncertainty of the future.
- Seek out and embrace new technologies to enhance the customer experience and increase revenue.
- Evaluate shadow IT to leverage the innovation it brings, while maintaining security and compliance.
- Apply agile methodology to all projects to quickly assess viability and produce wins.
- Simplify and combine existing technologies to reduce technical debt.
- Simplify existing processes to make them easier to automate.
- Integrate existing technologies to leverage others’ expertise.
- Add and leverage APIs to allow for mashups and shorten time to market.
- Distill volumes of data into exception-based information to provide executive focus.
The variety of new technologies and the speed at which they are emerging is incredible. Throughout my career, the successful IT leaders I have known were those who could balance “keeping the lights on” with shining a light on the future of technology, and rapidly responding to their market and their business partners with effective solutions.