Digitization

Whenever you want to digitize something, you need to start with designing processes. Digitization usually requires some piece of technology, and you need to “tell” the machine/software what it is supposed to do, i.e. which actions to take under which circumstances – and this means designing processes.

Also, digitization often means automating at least some of the actions, so that, ideally, they can be scaled quickly. After all, that is one of the main advantages of digitization. And automation, of course, requires predesigned processes (otherwise you cannot automate).

Even in a broader sense, when, for instance, designing a platform business model, you need to carefully think about your process design. Which processes do you want the platform to support and how exactly are these processes supposed to work? Well, it all starts with processes.

The naive digital mind might think that digitization is all about technology. So some companies  start hiring technical consultants and are putting their head of IT in charge of the firm’s digitization. But this approach has some flaws. While digitization may be driven by technological developments, it is at its core not about technology. At some point in time companies need to introduce some new technology, that’s right. However, the much more important tasks are the development of new processes and, above all, the development of a working business model. Digitization has profound effects on your business, and technology alone cannot address them properly. The first flaw, therefore, is to think that introducing some new technology (maybe this app for your customers) will already transform your company into a digital one.

The second flaw is putting IT in charge of digitization. IT can – and has to – take care of the technological components of your digital transformation. But is IT really the one with profound knowledge on business process reengineering, change management, digital economy, strategic management and business model development? Usually not – unless you have hired an economist or a business manager as your head of IT (the question then being, what do they know about systems architecture, software development etc.).