Digital Transformation vs. Innovation: Where Should You Focus in 2020?

Shawn Mills is a technology entrepreneur, thought leader, and CEO of Green House Data. Connect with him on LinkedIn or Twitter.

As we look forward to the new year and the new decade, it’s time for business leaders to identify how they want to drive their organization into the future. What new technologies, tools, processes -- and, quite frankly, people -- do you need to better serve your clients, stakeholders, employees, and community?

For 8 in 10 organizations, digital transformation has been a focus within the past five years. Meanwhile, 84% see innovation as key to success. So it’s likely either transformation or innovation will reach your whiteboard as a top initiative in 2020. But what do these terms really mean in practice? Aren’t they kind of synonymous? Well, not really. Once you dig into the meat of digital transformation, you realize it could lead to innovation. And if you can truly innovate, chances are you’ll need to transform your digital operations to follow through.

Where should you focus your efforts? That depends on the state of your IT and application teams along with your overall mission.
 

Innovation is Net New. Transformation is New for You.

Innovation is a needle mover – a net new idea, method, product, service, or process. It challenges the existing norms, rethinking what is even possible. It can also be the use of improved, better solutions to meet requirements or market needs. In either case, it is about using or creating something disruptive – a product, service, or process that shifts your overall paradigm. Remember that innovation is not always the technology being used or created. It is what results from that technology and how you solve your pre-existing problems in newly reimagined ways that benefit your organization.

Digital transformation, on the other hand, is new for your organization. It often means implementing someone else’s innovative processes or services to fundamentally change the way you deliver technology services or the way your technology supports your business goals. It might translate to catching up with whomever disrupted the market in the first place.

Digital transformation is about implementing new employee roles, software, hardware, as-a-Service options (including cloud computing), automation, and agile processes in a combination that dramatically changes your business operating model. This often involves modernizing your technology, but digital transformation is not mere modernization. You should be auditing and evaluating your overall workflows across all departments, integrating your new technologies in ways that deliver more value to customers and stakeholders.

Transformation requires a new approach to operational workflows, technology administration, and delivery, starting with a revamp of your IT management and consumption models.
 

Where Innovation and Digital Transformation Overlap

Of course, many innovations either encompass digital transformation elements or lead to them. The opposite can be true as well. Being the first to successfully adopt digital transformation within your industry might translate into true innovation.

One example can be found from our colleagues at our sister company Deliveron. They worked with a medical contract staffing organization who was still using paper- and Excel-based tools and processes for tracking, scheduling, and even payroll. As they grew to over 800 contractors under management, they needed a more efficient operating model. We designed, developed, implemented, and trained them on an end-to-end custom application to capture and process their scheduling and help automate payroll.

This might seem like a simple step to take: moving off paper and Office software to an industry-specific app designed around your precise needs. But don’t forget: digital transformation doesn’t require innovation. This relatively simple solution was completely transformative for this growing organization, helping them streamline their operations and deliver a better service to hospitals and caregiving organizations throughout the market.

While we have yet to implement the innovative step for this staffing organization, we do have some ideas on how we can take their existing application and make it truly innovative.

One example would be taking advantage of cognitive services on PaaS platforms like Azure to automate and pre-fill forms for intake or processing. In this case we would design an application component that could take a picture of a staff member, match them to an existing record, and pre-fill any relevant information for the current scenario.

Another example would be using machine learning PaaS to identify patterns within the contractor pool and align opportunities with a good choice of staff candidates based on criteria such as previous experience, when they accepted jobs in the past, location, feedback from previous contracts, or other factors that might lead to a satisfied client and a strong contract employee performance. This machine learning algorithm could surface a list of solid candidates or even reach out to them automatically to alert them to the possibility and find out if they are available or interested.
 

Getting Your Team On Board

The first step for either digital transformation or innovation is to recognize your business goals and identify the obstacles or problems in the way of reaching them. By using (in the case of transformation) or creating (in the case of innovation) new digital products and processes aimed at streamlining your organization, you progress further along a digital journey that will surprise, delight, and satisfy clients or partners and lead to greater business profitability and market penetration.

Remember, with 80% of organizations looking to transform or innovate today, what are your goals for transformation? Your employees must be ready to adopt new tools and workflows in order to successfully reach them. This is a journey for your entire organization, and it must come with buy-in and participation at every level. This fact is often overlooked.

70% of those who have pursued digital transformation report failure, according to a McKinsey study. In part two of this blog, I’ll examine the top obstacles to transformation and innovation and suggest some ways you can overcome them. In the meantime, if you have any questions around digital transformation strategy, Green House Data has digital transformation specialists and expertise that can guide you along your journey. We’d be thrilled to help you plan a transformative 2020 to kick off a new decade with real innovation.