Approaching digital transformation with a more holistic mindset

The Covid-19 pandemic drove digital transformation, forcing companies to rush into the cloud to accommodate remote work. Cloud spending reached an unprecedented $65 billion in third-quarter 2020, 28 percent higher year-on-year and 3 percent higher than pre-pandemic predictions. Companies weren’t just investing in the technologies they needed in order to complete or advance digital transformation; they were investing in whatever they needed in order to survive the pandemic.

Ironically, the pandemic was also a disruptor of digital transformation. Although the flurry of cloud investments in 2020 added to companies’ digital portfolios, the pandemic may have diverted investments from what mattered long-term to what mattered short-term.

Compare it to a house under renovation. The homeowners have a long-term plan to redo the kitchen, bathroom, or front entry (digital transformation). Then a pipe breaks, floods the basement, and forces the homeowners to focus all their time and money on plumbing (the pandemic). Not only does the short-term panic distract companies from their long-term plans, but it also impacts their available resources.

Now that things are returning to some semblance of normality, it’s time to take stock of where digital transformation is today, note where it might have deviated, and reset the strategy for the crucial months ahead.

Digital transformation has traditionally been associated with the back office. Routine administrative tasks get digitized, automated, and integrated so that companies run efficiently with end-to-end cohesion. There are endless opportunities (and imperatives) for digital transformation in the back office, but that’s only half the equation.

In today’s ultra-competitive markets, made even more so by the pandemic, the customer is truly king. Companies fight hard and spend aggressively to attract customers and keep them in their ecosystems. Price points and service quality are important parts of customer engagement. In a tech-driven economy, however, digital transformation will be what attracts and compels customers.

The front-facing component of digital transformation is just as important as the back-office component. Companies need their internal processes to run on a seamless foundation of technology, but they also need their products, services, and support network — anything facing the customer — to be tech-optimized as well.

Failure to consider both sides of digital transformation doesn’t just lead to an incomplete result; it compromises the whole effort. A tech-driven company with an antiquated appearance won’t attract many customers, especially after months of lockdown sent expectations for digital experiences through the roof. At the same time, companies that focus digital transformation outward instead of inward will make a great first impression but disappoint later on.

Whatever form digital transformation takes from here forward, it needs to travel a parallel path at equal speeds: One path focused on the customers, the other focused on the company.

A survey taken during the pandemic showed that the majority of executives believe cloud migration is now a necessity. That reveals an important level of understanding in the C-suite. What remains to be seen is how the pandemic mindset will affect any forthcoming exodus to the cloud.

In the same way that companies may neglect the front office during digital transformation, they may focus too much on discreet cloud solutions that add specific capabilities or fill certain gaps. The term “transformation” implies top-down change.