Right? Until this week at Microsoft Inspire 2017, I had completely given up on living in an era when a phrase would outpace “the cloud” in business and technology circles. That era hasn’t quite arrived but I believe there is a new and clear contender: “Digital Transformation”.
I’ve spent the last week in Washington, D.C. with 15,000 of my closest friends and colleagues at Microsoft Inspire 2017 learning about the next evolution of Microsoft’s B2B solutions. I must say, the event is aptly named. Everyone seems to be drinking the Cloud Kool-Aid (myself included) and scratching out plans to take the software world by storm in 2018. The event has, in fact, been inspiring. Microsoft unveiled a number of new solutions like Microsoft 365, Microsoft Relationship Sales and the Microsoft Azure Stack. They’ve even gone to great lengths to remodel their selling and marketing organization to make way for changes in the way businesses will leverage technology in the near future…which leads us back to “Digital Transformation”.
Defining Digital Transformation
I hear the phrase “digital transformation” thrown around on a daily basis, and even at this conference, by people hoping to improve their technology pitch. More often than not, they’re describing a company’s ability to enhance automation with newer, faster or more comprehensive software. Sometimes, they’re referring to social media, relationship management solutions or IoT. They’re all over the board, but I get it. It is a fairly general phrase taken out of context and one that can be dropped into most conversations with technology buyers. The fact is, the transformation in question is more about the organization. Technology is in part, the catalyst.
A quick visit to Wikipedia (always accurate) gives us this definition: “… the total and overall societal effect of digitalization. Digitization has enabled the process of digitalization, which resulted in stronger opportunities to transform and change existing business models, socio-economic structures, legal and policy measures, organizational patterns, cultural barriers, etc.”. (Khan, Shahyan (2017-06-02). Leadership in the Digital Age – a study on the effects of digitalization on top management leadership (PDF) (Thesis). Stockholm Business School. Shahyan refers to the transformation of business models and the way people or businesses interact as a result of technology, but says nothing about features or functionality
Here is another one: “Digital transformation is a wave of business innovation fueled by cloud technologies like the Internet of Things, augmented reality, artificial intelligence and data.”. This one comes directly from Microsoft’s Judson Althoff, EVP , Worldwide Commercial Business. Althoff’s definition is more closely tied to specific technologies, but still points to “a wave of business innovation” as the actual outcome of digital transformation.
He goes on to say, “Driving our customers’ businesses forward through digital transformation has opened an estimated $4.5 trillion market opportunity”. According to a study by the Harvard Business Review, 86 percent of companies view digital disruption as an opportunity. Companies across every industry are seeking ways to use digital transformation to empower their employees, better engage with customers, optimize operations and transform their products. Leaders recognize that successful transformation depends on their employees and culture, which is why both are at the heart of the offerings we are announcing today.
Interesting take: I’d say the most interesting way to illustrate how different technologies were being brought together to create something new happened early in the week. Steve Hackman conducted The Capitol Symphonic Youth Orchestras (TCSYO) at Microsoft International Inspire Conference at the Verizon Center. They performed Viva La Vida with work from Beethoven and Coldplay together to make something completely unique.
Earlier this year, our marketing director authored a post that touched on this subject and quoted Satya Nadella’s definition of Digital Transformation as “the process of taking your company where it stands now and adapting/transforming the way it does business by integrating the technology to increase efficiency and effectiveness.” I believe that’s spot on.
I see digital transformation as companies evolving the way they operate, or as Satya says “transforming the way they do business”, to be successful in an increasingly digital business ecosystem. For SBS Group, it often means helping our customers architect their technology environment to support positive digital engagement with their customers, employees and other stakeholders. It almost always includes helping them take advantage of cloud services available today that outperform the traditional server room.
How Digital Transformation is changing ERP, CRM and other business management systems
When you change how a company does business, you effectively “disrupt” the current state of that business. Upgrading to a faster system or adding features isn’t really all that disruptive to the business (even though implementations can be annoying for a time). Replacing an ERP system with a newer, faster system often just results in more efficient automation of the same inefficient processes, or as I have heard and said many times applying technology to bad business processes only results in faster bad processes.
Dynamics 365: It is for this reason, that Microsoft has reimagined their ERP and CRM offerings. Instead of enormous all-in-one systems that build on top of old ideas, they’ve broken their offerings into smaller systems that can be delivered more efficiently and cost-effectively through the cloud. And, have fundamentally re-architected them to support businesses on a customers’ terms – including mobile devices and broader access to data.
ERP and CRM have been broken into more usable cloud components that can be implemented quicker and at times that make sense to buyers. Through the common data model, built-in BI, analytics, Flow, IoT and other components all the systems work together as one system. ERP and CRM are now:
- Dynamics 365 for Sales
- Dynamics 365 for Customer Service
- Dynamics 365 for Marketing
- Dynamics 365 for Field Service
- Dynamics 365 for Project Service Automation
- Dynamics 365 for Finance and Operations
- Dynamics 365 for Retail
- Dynamics 365 for Talent
Microsoft 365: Just announced this week, Microsoft 365 represents a fundamental shift in how Microsoft will design, build and go to market to address customer needs for a modern workplace. It’s a more cohesive approach and reflects the shift partners and customers are making — from viewing productivity, security and device management as individual workloads to seeking a comprehensive approach to secure productivity.
Again, what does this have to do with me?
Don’t get caught up in the hype. Just remember that business are moving quickly to evolve and compete in an increasingly digital ecosystem. Technology makers, providers and services companies are changing as well.
As you make plans for technology in your company, remember that “digital transformation” is often used as a buzzword, but that doesn’t mean it doesn’t represent something important to you. Think about how your business will need to adapt then look beyond the next versions of your current systems to invest.
Chief Solution Strategist, SBS Group
Robbie Morrison has spent nearly 20 years helping customers build and deploy elegant technology and business solutions. From start-ups to enterprise-class organizations worldwide, his knowledge of the Microsoft Dynamics ecosystem and products helps SBS Group customers maximize ROI on technology investments.
Today, Robbie serves SBS Group customers in his role as Chief Solution Strategist where he provides thought leadership and manages the development of B2B solutions. Robbie received his MBA from the University of Georgia, Terry College of Business.