Why Should Companies Invest in Digital Transformation

📍 📍 📍 Hi everyone. Welcome to Software Savvy, the podcast where we talk about all things tech and software for non-tech people. In today's episode, we'll be discussing a topic that's becoming increasingly important for businesses of all sizes:

Digital transformation

Joining us today are Jonathan Sasse and Joseph Jackson, experts in business strategy and software development.

They're here to give us both the strategic and technical insight into what goes behind progressing your business with technology. All right. So without further ado, let's dive into 📍 the discussion.

Before we started recording today, we were discussing a little bit more about the topic. From what I heard, it seems like digital transformation isn't 📍 necessarily like a wand wave where you just, wave a wand and all of a sudden you're completely competent in your technology stack and you've made a complete switch from, whatever you had going on the day 📍 before.

I'm curious, Jonathan, as to what exactly is digital transformation, and maybe discuss a little bit more about how it's more of a spectrum rather than a black and 📍 white change.

Yeah, sure. I think, digital transformation's one of those terms that gets thrown around a lot.

📍 Like it's become a buzzy word in the industry that we use a lot. And it's important to think about transformation usually is a pretty big change in your business.

It's a change in your customer experience.

You are making a pivot into a direction that's new for you. So that's the transformation part of that. And really the digital part of that really just implies that there's a technology that's propelling that. The original iteration of digital transformation was 📍 moving from a very analog world into a digital world.

I think that some cases still really applies, but it's also more about using technology to pivot your business in a new direction. And I think that's really what it is.

And then when we look at that you're typically leading with that or you're reacting with that. 📍 So that's usually some form of disruption.

You're either being disrupted, your customers or competitors are disrupting you, and so you're taking a look at a digital transformation to react to that. Or

you've got the vision and the roadmap to go be the disruptor, and to go initiate a digital transformation, with the right vision around what's good for your business and what's good for your customers.

So for the people that maybe have a headstart,

in that they know they need to do something in order to eventually, like you said, be those disruptors,

How attainable could that be for someone that has a headstart in planning and can start looking at the different things that they can do to start their journey, 📍 Joseph?

I think we find ourselves in a place now where, Beginning the process of a digital transformation is much more attainable than ever. I use an example a lot if you're not familiar,

AT&T had a division called Bell Labs back when they were Southwestern Bell, a long time ago, where when none of this technology existed, they had to develop it in-house.

📍 They had to build the building blocks to build the things they needed to provide better services to their clients. And that kind of sparked a bunch of innovation. And there are a ton of companies now that build these software products that they know are building blocks to bigger and better things. And so you and your company doesn't have to go reinvent what place the fax machine serves anymore.

There are companies that build these services, communications, data processing, storage, web hosting, and I could go on ad nauseum for these. They all exist. And so you can much more so now than ever before, find the components that you need and then use your subject matter expertise in your industry to build some solutions that really help you disrupt with a much lower barrier to entry than before.

So you can really focus on what is you're trying to do and the goals you're trying to achieve and not try to focus so much on how you make that possible. Then having good partners that do understand that landscape help a bunch as well.

For those organizations that don't necessarily want to be disruptors in their industry, but do wanna stay competitive so they don't necessarily wanna create maybe something from scratch, but they do wanna take on newer technologies that maybe they weren't using before what would you recommend to people that may be at 📍 that level?

I would think that one of the things you'd wanna look at is start with your business. Start with the thing that you know. Start with the industry that you're very familiar with, and think about ways that you can improve there.

Where are the gaps in efficiency? What are the changing landscape of expectations? And Jonathan May be able to speak more to this than I can, but

there's always an expectation out there for what the next thing is going to be or how can we make this better?

But the source of that expectation can come from within your business. It can come as your competitors are making changes and being disruptive or just in change in the expectations in your customer client base. A good example is seeing how there's kind of an arms race going on between delivery apps as far as what additional services and granularity they provide because it's such a competitive space, but someone had to do it first, you know?

And so I would say it's a fair assumption to say that there's probably a service out there,

or a combination of services that can do what I need, but I need to have a clear vision of what I'm trying to do first. I think Jonathan can probably speak more to that than I can, but, once you have a clear idea of what your vision is, then it's a much easier task to go figure out what services you need to put together and configure to actually deliver that expectation or experience.

Yeah, I think one thing you touched on there, Joseph, is looking at this from a customer's perspective as well. A lot of businesses out there are not paying enough attention to what their customers are hiring them for, or what they need

I think it's a good point that you can be reactive to what's happening in the marketplace.

You can react to a disruption that comes from outside. But paying very close attention to what your customers are doing and what they expect is critically important. Many businesses get so focused on how can we make more money? How can we be more efficient? Those are great things, operational goals for the organization.

But if you're facing a transformation or reacting to a disruption, starting with your customers is gonna be really important. They're going to tell you,

📍 this is what I love about what you do, and this is what I don't, and this is why I'm at risk potentially of leaving, for a competitive solution.

And these are very real things to pay attention to. And many times, especially if you are being disrupted, the reaction to that can sometimes get you to focus very closely on just your business efficiencies and operations, and start to step away a little bit from what your customers are saying and doing.

And sometimes those threats can come from places you don't expect. It doesn't have to be competitive in your industry. Many times our customers are being delighted by other companies and it is teaching them what's possible. Once customers know what's possible, if they know that you're not doing it, then it appears that you're choosing not to delight them,

📍 and that can be tragic.

It's really important to pick your head up a little bit, look down the road, but also be listening to what your customers are saying and actively go get that information,

because it's going help you know which things you need to invest in.

Is there any type of leveraging that needs to happen when choosing between what your customers want versus what optimizes business operations?

Yeah, you're probably gonna have to deal with both. Chances are if you're facing a transformation from a technology perspective, that means that you've probably got multiple paths to follow. But

if you are not heavily invested in delighting your customers, frankly, it doesn't really matter how efficient your business is.

And for the people that know that this change needs to come eventually, but they don't really know where to start or maybe are facing a lot of uncertainty. I think Joseph, this probably goes back to the at Obtainability concept that you were speaking about earlier.

How can these business owners, overcome that 📍 uncertainty?

I think there's several ways you can do that. One is by example. I'm gonna pull an example out here. So Amazon, the delivery service, for example, everyone's familiar with it now, but it is not today what it used to be.

And some of the features they've implemented appear to have come from other places, like I mentioned, Uber Eats and DoorDash and services like that, that also do food deliveries, but more locally based.

We've had the idea of tracking packages for a long time. So to see though that you can now get on Amazon and see where the truck is in your neighborhood and how soon it's gonna be there, that's a level of granularity that I'm sure other delivery companies like FedEx and UPS knew were possible but didn't think was practical

until other companies did it.

So I think that when it comes to Obtainability, it's easy to look at some other big tech company and see like, "oh, of course they did it."

You know,

"of course Google can do that."

"Of course, Amazon can do this." Even those companies are using other third party services a lot of the time to help achieve these missions.

And so I would think that if you can think of an example of how someone is doing something similar to what you want to do, don't necessarily look at the size of that company to see,

"is that only a big company thing or is that only a tech company thing that they have access to because of their knowledge?"

I obviously think talking to someone and having a technical partner, if you're a non-technical business is a way that you can get that certainty. But, I would say if you know what's being done somewhere else, don't write it off as too big or too complicated.

I think it's a perfect starting point for our conversation to say, "well, we know other company, other industry is doing this. How can we bring that to our customers? How can we bring that to our industry and disrupt within our vertical?"

That's a totally valid discussion.

Start from the position of "this is doable" and work to find out what the hurdles are instead of starting from the position of,

"this is impossible, this is too far. This is not really gonna be something to do. We're gonna have to take baby steps towards it."

I think taking a more aggressive stance when it comes to technology is often warranted because so many other companies are out there in an entirely different space that are putting these tools together that can just be guided towards whatever purpose you need.

They're not necessarily industry specific. So I would say that just being aggressive and, if you can have that example of the possible, start having conversations about it and talk to those that you can trust, that have that technical expertise and knowledge to really start getting those details.

So Going back to the spectrum analogy, what might someone who is earlier on their journey look like in terms of technology, their technology stack compared to someone like you just mentioned, Amazon or any of the big tech companies.

What might those first steps that someone on their journey might 📍 take?

I think you need to identify who the key players are that understand this realm of the technology. On the far end of the spectrum and the opposite of Amazon is a non-technical company who doesn't really have anyone who knows anything about this, right?

And if you don't have some key stakeholder or shareholder that knows about these things and has some experience in this, I would say for a partner that does have that information and knowledge and that you can trust. Because it is a big world out there of all these third party services and it's easy to feel overwhelmed with the possibilities once you acknowledge that they're all there and exist.

But that's a good problem to have- navigating the wealth of possibilities and putting together what you need. I think that's really where it starts, is identifying the key people that you can trust when it comes to the technical front.

Jonathan, do you have anything to add about this strategy to take whenever you're first starting?

Joseph mentioned something really important there. If you don't have anybody in your organization that you can trust to outline the vision of what a transformation might look like, you need that. It can be a really difficult position to hire for if that's already not something that you have expertise in.

So getting a partner can be a really good way to get started on your journey because, a lot of times people think that having a partner that could be an agency, it could be another organization that's in your lane, but having a partner sometimes feels like that could become a dependency for the future forever.

It doesn't have to be that way. Some companies choose that. They don't necessarily want to build a new arm of their organization to handle the technology vision, and that's fine. But you don't have to necessarily go all in on that. Bringing in a partner will help you understand the terminology, the challenges, the various technical options for your industry, probably exploring your customer feedback. There's a bunch of things that a partner can help you do, and many of those partners, especially if it's an agency or something similar, if you're upfront with them,

That you want to build this part of your organization out, it can start with the agency and they can help you onboard the talent that will eventually let you build your future team and phase themselves out.

A lot of times organizations don't know that's even a choice. It feels like I either build my team or I go hire a team. You can build a bridge to the future through an agency. That can be a very effective way to do it,

especially if you feel like you just are not in a position to make a hire or to make a critical technology decision on your own. Bringing in some outside expertise and then outlining a plan for the future of how you want to grow, whether that's enable that partner for the foreseeable future, or building a bridge to a new organization that's more technology focused in your own organization...

those are both very good paths, and it's much better than missing on a really important hire and then having to hit the reset button a year later.

Yeah it's a big change that you're making to your overall business strategy. I guess going on with that challenge, how can companies ensure that this change going on internally,

how can they ensure that their employees are prepared to face all of the changes that will come with 📍 that?

Yeah, it can actually be a scary thing for an organization and for the teams in those orgs. People will wonder are they gonna be replaced? Is this transformation mean that they're not a part of the future? So addressing a lot of those things early can be really helpful.

You want to get rid of as much of that uncertainty and fear that the organization might have with something new and different in the future.

So having that plan of here's how we're going to do this, and here's what this means for the company. And then monitoring your success metrics.

That could be your customer feedback, it could be some of your business objectives, but ensuring that you're communicating all of the information to your team. If you're bringing in outside partners, that you're helping them understand what the role of those organizations are and what the plan for the future is with that.

These can be really trying times for organizations that can be uncomfortable. Being open with your team, collecting feedback from your team, being able to hear how things are going on a regular basis. Very important. Sometimes people can feel like they're being disrupted out of their own organization.

So

if that's not in the cards for your team, be really upfront with everybody as you begin the process and what their role is gonna be so that they can be part of that growth instead of feeling like this is a way to phase them out.

That kind of made me think about, a lot of the fear that comes with automation and AI right now.

Joseph, how do those types of technologies tie into digital 📍 transformation.

So quickly to speak on something Jonathan said, and then I'll get onto that question

being on the technical side of things, one of the things I have the joy of being able to do is to meet with people within an organization.

And I find that a lot of the times when you actually give them the opportunity to provide their feedback and be a part of the change. because typically when we think of subject matter expertise, It's easy to say that people of this company are the experts on whatever your industry is.

But the reality is,

is there's a subdivision of that expertise within the organizational structure and collecting that knowledge and allowing them to be a part of the change oftentimes I find has a lot better results. Why does this accounting person or this ops person, how do we take their expertise and put it folded into the digital transformation and maybe even use the software as an opportunity to improve their efficiency and make sure that they understand that 📍 we're not trying to take their expertise and put it in a bottle and put it in the software to make it run.

What we're trying to do is build tools that allow them to exercise that expertise in much more efficient ways. And that's also one of the issues with AI. There are some amazing things that can be done with AI, but it's also one of the most easily over-hyped things.

It really depends on the scenario. So it's difficult to talk about it from the abstract general sense and then apply it specifically to what you're trying to do in a digital transformation. So I think that's definitely one of the areas where we are on the bleeding edge of the possible when it comes to AI.

Oftentimes I would always recommend people, look at the resources that you've been investing in within your organization. You have individuals that have this subject matter expertise, that have accumulated that information over years. The original AI is people. We learn and we adapt to situations and we're just now virgining into computers being able to do something like that through AI.

And so I think AI is a tool to help show trends that are then contextualized by a person that actually has the subject matter expertise is one of the best ways to utilize it. I don't think we're going to be at a place where it is a suitable replacement for some time, but it can definitely augment and support, the knowledge that these people already have and take it further than you could have in the vacuum.

That's my 2 cents on AI. I've seen it used in really great ways and really bad ways before, as far as how efficient it can be and how it plays a role in a company's vision. So I would think that if you're gonna go down that road, don't buy into all the hype, but make sure you, again, have someone that you can trust to talk to about it.

And then I would focus on how can we use this to get more distance out of the knowledge and expertise that we already have within our organization.

I know you guys both have experience in helping organizations start their journeys or along their journeys.

Are there any common challenges that you see happening whenever people are embarking on their digital transformation 📍 journey?

Yeah, I think the most important thing is to really take a minute and assess your situation. What we see is that sometimes people panic, especially if they're being disrupted in a way that they did not see coming.

And they feel like catching up is gonna be extremely difficult. So sometimes they're making decisions in haste and that can be very challenging from a technology perspective cuz getting down that path and having to start over can not only put you in a bad situation competitively, 📍 but

even financially, that can be a really difficult path. Where we usually start, and one of the first things that we explore with companies when we work with them is making sure that everybody's on the same page. All the key stakeholders are looking at this from the same point of view.

And if they're not trying to understand those differences, and then from there, Really looking at what amount to be hard questions. Like why does anyone care that you exist as an organization? That's a really important thing to look at. What's important that you do, that people are gonna care that you're still doing, years from now?

And make sure that you're preserving as much of that as possible. And then the other thing is, and I've mentioned this already, but paying attention to your customers is really critical. Many times we will sit with an organization facing some kind of disruption or having a plan for digital transformation, and you ask them like, why do your customers hire you?

Why do they pick you over other people? Why do they care that your service is here? And it's amazing how many times the key stakeholders in an

organization will freeze when asked that question. That's okay because that's what we're there for is to kind of work through that.

But if you're facing this right now, you need to be able to challenge your key stakeholders in your organization with those questions and have answers that you can agree on. That's gonna really help plan for the future, but it's also going to help you focus on the right things. I would not recommend you do is sit down and say "the revenue numbers are not heading in the right direction.

What technology could we use to point them in the right direction?"

That may end up being where you go, but that's not what's gonna tell you what to do. That's gonna come back to,

really taking a look at the services you offer and the value your customers place on that.

And what they're asking you to do, what they want you to be in order to satisfy them in the future is gonna define a lot of how you take that first step.

Joseph, do you have anything to add?

Sure. Coming at this from the technical side of things to what Jonathan said,

focus on like what you've been doing in the past.

I've only ever seen it one time in all my time of doing this,

a company that had zero software or zero tools that they used that didn't already serve some business purpose from a software perspective and I feel like there's two tendencies on either end of the spectrum that both are generally not the best approach, but for some reason there's this idea of either this is an old thing, we wanna replace it entirely, let's just get rid of all this and start from scratch.

Or

this reliance on an old system that has to work and anything that we use has to work with it. And all of that's shrouded in details that the vast majority of people don't have a fine operating understanding of, like you may understand how to use it or understand what it's done for your business, but not understand the technology problems that it may pose or the benefits that it may have.

I think that taking an honest accounting of what the technology you currently use is capable of, and identifying redundancies in that system. And then actually having a thoughtful plan forward other than just, "I don't like this." Let's you know, there's a lot of human emotion involved as well as far as when it comes to technology, but making sure that we match that energy with understanding to make a good, optimal decision because you don't always have to just abandon the system.

Sometimes that is the most appropriate choice, and sometimes you don't have to build on top of what you have. Sometimes there is a better solution or a better alternative. But regardless of how that roadmap looks and what path is taken, it needs to be thoughtful. And I think that usually people make those decisions or come to those conclusions before they decide to engage someone who is technical.

If you don't have someone in house, or if you do have someone in house, but their technical expertise is restricted to the system that they understand, it can compound with some of the struggles that we've identified before. People who have Years of knowledge and perhaps even decades of knowledge on a particular system are going to be very hesitant to want to change away from that system because there's this idea that I've wasted all of that time.

Now, it's no longer useful going forward. That doesn't necessarily have to be the case, but regardless of what decision you take, there needs to be an honest accounting of what software you have, how you're using it, what does it cost? There are plenty of good software solutions that have not aged well into the modern age, but their pricing Sure has aged well as time has gone on, and maybe it's time to evaluate a more competitive option or maybe it hasn't aged well, but it's so cheap that you want to keep it. These are all questions that I have to speak abstractly about right now, that when you are in that position and

you need to be having those discussions. I think engaging the technical partner then to have that honest accounting is super important because, I can't count the number of times that we began because of a presupposition to make a digital transformation towards something else that we ended up having to change that plan halfway through once we did that calculus after we'd already started.

Whereas it would've been much better to have gone in and taken that honest accounting first and saved you a lot of time because development isn't cheap to engage skilled developers to make these changes. And you want to be able to spend those hours very effectively. And then one of the best ways to do this, to actually know what the pathway forward is.

I do think we're coming up on our time today. Is there any final remarks that you want to leave our listeners with today?

Yeah, I'll add one thing just to very quickly kind of sum up what we've just been talking about,

if you're thinking about this and you're looking at digital transformation, you're being disrupted or you're trying to be a disruptor.

It sounds simple, but taking a look at what you have critically important, that could be the tech assessment Joseph is talking about. It could be leveraging the technical resources in your organization, but. You need to know what you have, then you need to know where you're trying to go so that you can build a plan of how to get there.

That can mean that you need outside help. It may be that you have the internal chops to do it. But if you don't approach your plan in a really effective way, starting and stopping is one of the surest ways to miss a digital transformation opportunity. And have your competitors pass you or have your customers abandon you before you've had a chance to execute your plan.

I think Jonathan sum up really well there. The only thing I would add is back to the very beginning of what we said- I wouldn't write anything off as impossible. Especially when it comes to technology and don't be fooled by presuppositions and marketing around what things can or can't do.

Part of that honest accounting is not just accounting what you have, but what is actually out there impossible. And I just encourage people to have a more aggressive attitude when it comes towards technology as being possible and pursuing those goals once you do have that understanding. I would always err on the side of optimism when it comes to what is actually possible with technology as opposed to being very pessimistic about it.

📍 Well thank you both for sharing some of your wisdom today.

We encourage all the listeners today to continue to explore this topic and consider how starting your digital transformation can help your company grow. This has been Software Savvy: Tech-talk for non-tech people. Thank you for tuning in, and until next time, be sure to check out our show notes and follow us on LinkedIn.