Process Transformation Ain’t Digital Transformation, But It’s a Good Start

Now that the light at the end of the Covid tunnel is finally shining in our eyes, it’s time to take stock on the pandemic’s effect on digital transformation initiatives.

To be sure, Covid increased the urgency for many organizations’ digital transformation efforts, while simultaneously rejiggering the risk calculation behind such transformative moves. After all, if your company is likely to tank if you don’t transform, then tough transformation decisions are that much easier to make.

Even with such unprecedented business pressures, however, two obstinate roadblocks still impede even the most urgent of digital transformation initiatives: confusion about what actually constitutes digital transformation, and falling prey to the fallacy that technology should drive digital transformation initiatives.

Reviewing the three D’s

In April 2018, I wrote the article Digitization, Digitalization, And Digital Transformation: Confuse Them At Your Peril for Forbes. Haven’t read it? Click the link and have at it. I’ll wait.

Thanks for coming back. To summarize: digitization means converting analog information into digital data. Digitalization refers to the transformation of processes and roles to leverage digital technologies. And digital transformation aligns the business and its strategy with customer needs – a human-centric transformation effort that impacts the entire organization.

Digitalization is a relatively uncommon term, often getting lumped in with digitization. Even when we separate the two, digitalization frequently masquerades as digital transformation. This confusion is at the heart of the first roadblock to digital transformation success.

Parking in Digiville

Here’s an example, based on a true story. A municipal government for a town we’ll call Digiville had problems with its parking enforcement. Parking enforcement officers (PEOs) filled in paper parking tickets by hand in triplicate, which for you millennials means that each ticket created two carbon copies.

At the end of shift, one carbon copy went to the records department, while the other went to processing. The processing department consisted of half a dozen data entry personnel who would type the information from each ticket into the aging municipal ticketing system application.

From there, a manager would go into the system, review each ticket, link the ticket to other records the town had on the vehicle, and if necessary, correct information on the ticket.

There’s more to the process, but let’s just focus on those bits. Along comes Covid, and now the town figures they can’t have the processing department come into work. Instead, they should work from home. What should Digiville do?

Clearly, they need to move parking enforcement to something digital. They ask various vendors and consultants, and they hear they need to digitize, digitalize, and/or digitally transform. So which is it?

Digitization is certainly job number one. They swap the venerable paper ticket pads with tablets, giving PEOs a slick app they enter ticket information into. The tablet connects to a lightweight portable printer for producing a paper copy for the offender. This tablet app digitizes the ticket, taking what was a paper form and turning it into digital data.

The app also digitalizes the PEO role, giving them a new tool that changes the ticket writing process. But what about the back office?

Digital Must Include the Back Office

The Digiville parking ticket processing department is suffering under an avalanche of ticket carbon copies – not only the new ones, but all the tickets in process as well as the files of older tickets they need to keep around for years, just in case there’s a court case or other problem with them down the road.

To reduce the paper burden, the department brings in a content management system that includes optical character recognition (OCR), so now they can scan all those old paper tickets and automatically digitize them.

This content management system also digitalizes the role of the data entry clerks with the help of robotic process automation (RPA). Because the ticket data are now digital (either from the PEO’s apps or from the scanned paper tickets), a bot can type in the information into the ancient ticketing system application.

Technology Isn’t the Whole Story

Tablet and mobile app, check. Content management with OCR, check. RPA, check. Is Digiville done yet?

Not by a long shot. What’s missing so far is process transformation. The Digiville parking ticket initiative failed to take into account the need to transform its back-office processes in an effort separate from implementing technology solutions.

In phase two of the parking ticket initiative, Digiville brought in process transformation specialists who reworked front to back how the organization should handle tickets, incorporating the requirement that back-office personnel be able to work from home in front of their own computers.

They also bit the bullet and put in place a plan for eliminating paper from the process entirely – and eventually, replacing the ticketing system application with a modern, cloud-based alternative. In the meantime, the RPA bots would remain in place to enter data into the older system.

Not Done Yet

Here’s the important question: has Digiville digitally transformed itself? The answer is no, although they are well on the way. What they have accomplished is still digitalization – this time of the back-office processes as well as the roles of the individuals involved.

Digiville’s digital transformation initiative, you see, is far broader than parking tickets. It involves a citizen-led rethink of how a municipal government can conduct its business to better serve those citizens.

Parking is but one piece of this puzzle. To succeed with its digital transformation, the town must realign all of its efforts to support its revamped citizen-focused strategy.

The Intellyx Take

Without the appropriate focus on process transformation, the parking department achieved some modest digitization and digitalization successes. But in the end, the initiative threatened to go off the rails until it addressed the core Covid-driven requirements to change the way staff worked at the department.

With the proper process transformation in place, these problems were solved – largely with the same technologies they had before. The technology alone wasn’t able to drive the necessary change without the hard work of process transformation.

Yet in spite of all of these efforts, regardless of what Digiville’s vendors and consultants said, this transformation of the parking department’s processes and technology didn’t constitute digital transformation.

It did, however, give the municipal government as a whole an idea of what was possible – not only what bringing the right technology into the organization would help them accomplish, but how the hard work of process transformation was necessary to achieve the business goals of the government as a whole.

If they had believed the vendors and consultants that the parking department’s digitalization was actually digital transformation, however, they may have jumped to the conclusion that they had succeeded with this broader transformation effort, even though what they had really done is taken an important first step.

Digiville’s parking department is but a tiny corner of a small government. Your organization may be much larger and more complex. But the lessons that Digiville learned should apply to any organization on its path to digital transformation: confuse digitization, digitalization, and digital transformation at your peril.

© Intellyx LLC. Intellyx publishes the Intellyx Cloud-Native Computing Poster and advises business leaders and technology vendors on their digital transformation strategies. Intellyx retains editorial control over the content of this document. Image credit: public domain.