Digital transformation has become another over-used buzzword within businesses. In this piece for RetailTechNews, Raymond Gerber, chief product officer, Thunderhead, explains that the phrase has lost its meaning and few people really understand the true implications. In fact, when hearing the term, it leads one to question: “Where are we truly on the scale of digital transformation in 2018?" The answer is a resounding – not very far. Why? The digital economy of the last 25 years has been driven by a communications revolution, not a business transformation revolution.

If we take a step back and reflect, we are actually just at beginning of the journey because only small steps have been taken and businesses haven’t focused on what they really need to do to be successful. Embracing new technology on a superficial level will not suffice; and being distracted by uses of the latest technology such as chatbots and AI – without a true understanding of how the data will shape change – will not enhance your company’s reputation.

We are entering an era where to learn, listen, and embrace new forms of knowledge is the key to evolved survival and digital transformation. So, what are the fundamentals required to start the digital transformation journey and navigate its path in a positive and successful manner?

The demand of digital and the future structure of business

In the next five years, organisations will need to move from a reductionist, analytical, and siloed worldview to a holistic and integrated worldview – it’s a key theme that will become intrinsic to business.

To get here, organisations will need to think beyond the day-to-day agenda, that drives regular organisational functions, and work hard to develop their capacity for organisational learning and continuous evolution. By doing this, we will see truly transformative business models based on platform and ecosystem thinking. These businesses will be enabled by digital infrastructure and be powered by data and technology loosely referred to as ‘AI’. A deep understanding of how AI can be applied across a business to enhance your growth is essential.

The next phase of the digital economy will make very different demands on organisations, and learning and knowledge sharing will be critical to future success. Learning is a key part of continuous innovation. As James Dyson says: “Enjoy failure and learn from it. You can never learn from success.” As we look to revolutionise our technological journey, and move forward in it, the ability to consider, absorb, and reflect on the lessons we have learnt is essential to plotting the next effective and productive steps.

Innovation is key to creating true value

Transformation is led by a desire to push boundaries and to change the status quo. To make an inroad on the natural path set out for us is something that drives ambitious businesses. Being at the start of a digital transformation journey is thrilling as it provides the time and opportunity for organisations to start making a change now. But what is a key ingredient needed to make an impact?

The answer: Innovation

Innovation should be invested in and fostered. It’s the key to value creation and it should be embedded in every aspect of a business and respected as part of its DNA. Innovation is much bigger than just technological innovation. Service innovation and business-model innovation are arguably more important. It is vital to understand that investment means more than you would initially imagine – so time and resources need to be paid to all of these areas.

'Talent wins games – teamwork and intelligence win championships'

Michael Jordan claims "talent wins games". Moving forward in the digital transformation journey fundamentally requires investment to be attributed to the training, development, and finding of talent. Without it, a company has overlooked the tipping point for digital transformation and its most important item. Talent is what is needed to get the most out of technology innovations, and it is talent that will move us forward in our journey. To not place enough emphasis on individuals would lead to transformative delay. It would be an oversight that organisations pay for at each new stage and prohibit the advancements so sought after – so advice at every turn, is value talent and that investment will pay you back in dividends.

There are no shortcuts on the digital journey. We might be at the beginning stages of transformation, but the future is exciting and filled with prospects, as long as companies continue to value learning, embrace new forms of knowledge, and use AI and data thoughtfully. Companies have the opportunity to truly innovate and evolve, and it is investment in the right areas, that will be key to continuing relevance and survival.