The recent COVID-19 pandemic has given a boost to the adoption of digital technologies throughout many industries. Most of the newly implemented technologies are here to stay. But what are the characteristics of a digital company? Does digital mean people can work from home via VPN? Does it mean the company has an app or a customer portal?

“We are a digital company…” –  and why nailing a propeller on your house doesn’t make it an airplane.

Digital businesses apply technology to reinvent business models and transform a company’s products and experiences. It is not enough just to put the nametag digital on a business to be digital – this would be like the attempt of nailing a propeller on your house to make it an airplane.

Nailing a propeller on your house doesn’t make it an airplane

But what are indicators a company is truly embracing digital? In this blog post, I share my reflections on what makes a company a digital company and which are the top 5 signs that a traditional company is progressing well in its digital transformation efforts.

1 – Processes are running paperless

Whereas a paperless business does not necessarily mean it is digital, usually paperless is a good sign that most processes are implemented in a digital fashion. Hybrid processes can exist as well: A physical document is sent by mail, then scanned, and from there on completely processed in a digital fashion. The original document can be destroyed – or if required for legal reasons be archived. Companies that operate digitally don´t center their processes around documents as work artifacts. They rather focus on structured data and transactions being managed through various channels (apps, backend applications, APIs, …) within their IT landscape.

2 – Digitalization is used as an opportunity to rethink existing processes

In a logical first step of digitalization, companies replicate their paper-based business process to bring it to the digital world. This has obvious limitations. We also often see “Excel integration”. Data from one process is exported into an excel sheet, manually transformed, and then imported into another application. Digital transformation is also about identifying such inefficiencies in processes. Taking the opportunity not only to eliminate this and have applications communicate directly – but also to re-engineer the entire process is key. Artificial intelligence offers tremendous potential to introduce additional certainty and avoid manual intervention. This goes hand in hand with the need to continuously tailor and reinvent the business model. Digital companies always question the status quo – not only from a technical perspective but in particular also the business model they do have.

3 – Internal resistance is managed properly

Companies that have a digital DNA have managed to overcome internal resistances and use modern technology to help their workforce be productive. It is key to show to the team members that digital processes can help to automate much of the “boring” work so that they can focus on more value-adding activities.

4 – Up-Skilling of the workforce is a priority

With the fast-paced change in technology and business, up-skilling has become a vital part of keeping a team productive. It helps to keep team members engaged, and improve their skills and serve customers better. Digital companies have understood that they need to heavily invest in keeping their teams’ skills sharp and up to date.

5 – Miseries are addressed – not hidden!

The French use the term cache misère for a presentable outer garment to hide shabby clothes. Far too often, digitalisation projects work the same way: A new web or mobile app is put in place to make things look beautiful, whereas the backend applications and processes remain the same. As an example, the tax office in a major European country offers a possibility to submit a tax declaration “digitally” through their website. After submission, the declaration is printed out so that the tax officer can process it “the old way”.

To me, another example of technology supporting the cache misère pattern is Robotics Process Automation (RPA). RPA is used to speed up and automate the execution of old processes. This is mimicking the manual work of a person – but it leaves out the opportunity to rethink the process and renew the applications.

Conclusion

In this post, we discussed a few indicators which show that a company is embracing digital. It would be naive to believe that digitalization efforts can replace all backend systems and processes in a big bang fashion, but it is essential to start with the process and think backward, and adjust systems accordingly.

What do you consider essential for a digital company? Which traits do you observe in companies that fully embrace digital?

Marc Giombetti

Marc Giombetti

Marc Giombetti is the Chief Product Architect at TwoImpulse. He has 15+ years of international experience in IT, mainly within the re/insurance sector. His professional interests include AI, Cloud, SaaS, IoT, Time Series, Software Quality, and Agile development.