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Digital, adjective: the ability to store, process, move, and display information that is represented in discrete numerical form.
Transformation, noun: a fundamental change in character, usually for the better.
Digital is one of the most spuriously used words of the 21st century, with perhaps transformation being right behind it. However, there is something powerful about the digital medium that is transforming the world around us. From digital services to digital currency, what does digital really mean?
For most of human history, we’ve represented information via physical mediums: chisel marks in stone, ink marks on paper, or sound waves from our mouths. We would settle transactions with paper bills or metal coins stamped with busts from a bygone era. We moved folders full of files across desktops and mailed envelopes with letters across land and sea. Civilizations that mastered the physical world transformed humanity in ways that last to this day. After all, coins were invented around 1100 BCE (over 3,100 years ago) and are still used to pay for stuff today.
Physical medium has limitations though. We want to do four things with information:
Store, we want to keep it around;
Process, we want make changes to it;
Move, we want to share it with others; and
Display, we want it to be comprehensible.
Let’s take our stone tablet with chisel marks: storage is expensive, changes are difficult, movement is slow, and the person reading it must understand the markings.
Digital Changes This
The world digital comes from numerical digits; and for now, the digits that matter most are 0 and 1. Information represented in digital form immediately gains immense benefits across all four things we want to do with it:
Store, we can cheaply record information as data;
Process, data can be modified efficiently via compute;
Move, data can be sent quickly anywhere via a network; and
Display, data can be presented via interactive interfaces.
Let’s look at the English Wikipedia as of today:
At 6,295,404 articles a physical representation would clock in at 2,657 volumes; a digital version weighs in at less than 20 GB, the size of a thumb drive.
A physical Wikipedia would be difficult to search, requiring a massive card catalog; the digital version takes only seconds to pinpoint an exact article.
Shipping a physical Wikipedia would take a semi-truck; the digital version sends the most up-to-date article right to your phone, instantly.
A physical Wikipedia article would only be static text; the digital version has clickable links, video media, translations, and the ability to suggest edits.
A digital encyclopedia is much more than more efficient, it has features that could not exist otherwise. Because data is so cheap to store, it can be replicated across the world to ensure it is never lost. Because data can be processed efficiently, searching is no longer a time consuming activity. Because data can be moved efficiently, you now have the most recent version in the palm of your hand. Because data can be interactive, you can click links to new articles, sort tables to find information, or update articles in real-time when events change. Wikipedia did more than just digitize the encyclopedia, they digitally transformed it into something much better.
More Than Change, Transformation
Change just means doing something differently. Wikipedia could have digitally changed the encyclopedia by scanning the pages of an existing set of books and letting people download them from the internet. However, that would not have taken full benefit of the digital medium. Scans take up more space, can’t be searched, take more time to send, and are not interactive. Change is not good enough.
Transformation is fundamental, it’s rethinking the most basic concepts of something and reinventing it to take full advantage of a new capability. The digital medium offers so many incredible benefits, but only if you are willing and able to imbue them into every aspect of what you’re working on. Holding out only means holding back.
For the past thirty years, firms that fully embraced digital across every aspect of their business have become the most valuable in human history. Firms that have held back are now gone. Many however, have only adopted digital capabilities at the edges or in isolated pockets. Digital transformation means more than just using new technology; it means new ways of organizing employees, understanding customers, analyzing information, building products, and funding projects. It means more than just changing how you do business; it means reconsidering what your business is.
What’s Next
In the past ten years, the digital world has accelerated its pace of innovation and shows no time of stopping. Cloud computing makes expensive on-premises data centers obsolete; machine learning models are leaping ahead of conventional software applications, more employees are working remote across the world, and customers are demanding integration with new services every day. It is not enough to just adapt to these needs; you also have to adopt a new culture that is able to embrace this accelerating tempo and forecast what the next thing will be.
That is where Byte Club comes in. It’s time to for digital transformation leaders to open up, compare notes, and show what works (and what doesn’t). Byte Club is about stories showing the practical work of reimagining firms as digitally native enterprises.
This is Byte Club, a newsletter about real-life digital transformation by people who’ve led the largest and most complex firms through it. Subscribe now to never miss a post.