Here’s a post I had published on Medium some time back

I wrote the title of this post and immediately realized how jargony it sounds … but then, sometimes one has to deal with jargon — and digital transformation is a jargon that will be difficult to avoid.

So let me try and break it down first — what exactly is digital transformation? Simply put — it is what digital immigrant companies have to do to survive in the digital economy. Digital immigrant companies are those who existed before the web changed everything. These are companies that had processes that worked before everyone was connected through social media, could use an app to get a ride or just pick up a scooter waiting by the sidewalk.

These companies were very successful, had happy customers and efficient processes — but that was before their customers started getting used to products and services offered by the digital native companies … companies that created their businesses around always available technologies and can provide user experiences that are far superior to anything digital immigrants can.

It can be overwhelming … how do you begin to go about it when it may be difficult to even relate that kind of user experience to your offering? Moreover, most companies are already using digital technologies, have a web presence — possibly providing eCommerce and perhaps even have a few mobile apps for specific things … what else do they need to do?

Well, digital transformation is really a journey — not a destination. Setting jargon aside for a second — it is the old wisdom about getting it right for your customers, delighting them at every opportunity with quality of your products, your customer service, your low price, your time to market and your focus on constantly improving the overall customer experience.

Sounds like repackaging of old ideas … what exactly is different? Aren’t these what good companies always did?

Well … yes, but there is a difference. The difference is how quickly and how well modern digital technologies, applied well, will let you achieve these goals. The goals remain the same — but those who recognize opportunities to leverage technology most effectively for their business are usually the winners.

Technology by itself is never a solution — Fear Of Missing Out (FOMO) projects are not the answer (although I believe there is a place for FOMO projects in the overall strategy — but I’ll leave that discussion for another post). You have to aim to get to that sweet spot at the intersection of your specific business and its use of technology. You do that by keeping your customers interest first, looking for what you can do to serve them better — and then look for digital solutions that will help you do just that.

You may actually find opportunities in processes that are already digital — because transformation is indeed a journey. It is important to constantly collect feedback, introspect and review end to end processes whether they are manual, or technology driven.

That brings us to value stream mapping — a tried and tested method to look at how things are done in its entirety, weeding out the steps that are not productive — and designing optimum workflows. To quote Taiichi Ohno — the father of lean manufacturing “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.”

Value stream maps help visualize the flow of activities starting from the customer requests through each step and ending with the customer receiving the requested goods or service. The visuals allow you to step back and look at the big picture and trace the root cause of delays and inefficiencies. They help avoid cherry picking and ending up with the wrong solution.

Let’s look at a simple example to see how it works. I will not go into the detail of how to draw a proper value stream map — but for now look at a very simple case to illustrate the point.

Say you run an e-commerce shop that sells made to order baked goodies to consumers. You get your bulk orders made by a wholesaler that has given you access to their web based ordering application — and a fancy mobile app as well, very cool. You — not to be left behind, have also created an excellent web site and a mobile app that your customers love. But as your business grows, you start noticing that orders are getting delayed — and customers are beginning to complain.

You decide to draw a value stream map — and at the end of the process, this what you discover –

Your steps include the following –

1. Receive order in the system

2. Print a report of all orders.

3. Log in to the supplier’s site

4. Key in the orders in the supplier’s application

5. Receive the shipment from the supplier

6. Add your finishing touch to the goodies

7. Ship them to your customers

8. Generate and send invoices.

As you review these steps, it becomes crystal clear that steps 2, 3 and 4 are adding absolutely no value to the process. Although digital systems are involved, these steps are just moving information from one system to another. In other words, they are ‘non value adding wastes’ that keep increasing as your business grows — and therefore need to be eliminated.

Now that you know where the problem is — you can start to look for solutions, which is finding a way for the two digital systems to talk to each other.

This exposes an opportunity to embrace a modern cloud native, microservices based architecture for your systems — which will provide the foundation for many such transformation steps.

It is important to mention that this isn’t easily done, and just the one scenario above may not justify a completely rearchitected system…but real value stream maps will probably expose many such opportunities and provide enough justification to begin the journey.

Going back to another Taiichi Ohno quote — “Having no problem is the biggest problem of all” — you are probably not looking hard enough … and value stream mapping is a great tool to help you look.