Digital Transformation – a 21st Century phenomenon

Thus Tweeted Aron Hausler, one of our core team on the Australian Web Observatory project.

Business models are not just being disrupted, they are being totally transformed, and across all sectors.  We are only just beginning to come to grips with what this means, but we are doing it very slowly, and I believe that the level of understanding and awareness throughout all sectors is alarmingly low.  Why is this alarming?  Not just because a lack of digital literacy prevents people from exploiting the opportunities presented by digital technologies, but because they are like a frog in boiling water – aware that the temperature is getting warmer, but in danger of being unable to hop out before it’s too late.

In his “Future of Humanity” work Ross Dawson provides some scenarios for the next fifteen years, and Ray Kurzweil’s predictions of the Singularity in 2029 are also approaching rapidly.

Whether or not you embrace these predictions the reality is that disruption is on the horizon in every sector.  To give just one example in the finance world Blockchain is beginning to disrupt the banking sector, and the Commonwealth Bank is already trialling it.

With this in mind … a couple of weeks ago New Philanthropy Capital launched its “Digital Transformation” project and I am extremely privileged to be a part of its Steering Group.

My involvement with the project came about from conversations with Tris Lumley about the evolving role of philanthropy in the digital world.  In his recent article “The power of digital” Tris raises a number of key points about the disruptive nature of information in digital form, but the lack of capability within the not-for-profit sector to either harness the benefits of that disruption, nor anticipate them in order to survive.

“Somewhere in this new territory is the promise of transforming what used to be public services into new citizen-powered and –empowered models. …  Save a few of the very largest charities, most are ill-equipped to exploit the opportunities presented by digital; they have tiny technology budgets, creaking hardware, and lack the expertise, mindset and the leadership required.”

NPC’s Digital Transformation programme builds on the recognition that digital technology can make changes to the fundamental architecture of the sector resulting in easier integration, more effective collaboration, and more efficient co-ordination so that “beneficiaries” are at the heart of service design and delivery.

The project will be conducted in three phases:

1. Making the case for digital transformation and building a community of interest: development of a research paper that establishes a vision for digital transformation and begins to map opportunities and best practice.
2. Identifying the most promising opportunities through in-depth research: focused market research to identify and prioritise opportunities for digital
3. Practical implementation in selected focus areas: creation of development teams to pilot new approaches to get these opportunities off the ground.

Much has been written about the transformations that are occurring in all sectors of society as a consequence of information being created, published, manipulated and consumed in digital form.

In the public sector “digital” has been the key driver of change, moving on from Osborne and Gaebler’s management focus in “Reinventing Government” towards a new doctrine about the relationship between citizen and state through “opening up Government” (I wrote this Overview a couple of years ago).  Within the public sphere this has led to efforts aimed to provide far greater transparency, enhance collaboration and enable greater participation in the processes of civics and governance, and, following on from the UK’s Government Digital Service the Australian Government has now created its own “Digital Transformation Office” with its own Digital Transformation Plan.

In the corporate world the initial disruption was through utilising digital interactions to better understand customers through targeted marketing, but things have moved on a long way from that now with the next wave focusing on enhanced efficiencies through automation and robotisation, together with new forms of digitally mediated commercial interaction and negotiation.

The not-for-profit world is no different, and when it comes to “making the case to adopt digital” the proverbial horse has already bolted – it is too late, the World has already “gone digital”.  The real questions are how to leverage and utilise the benefits of information in digital form, whilst simultaneously providing for the risks and challenges that are simultaneously posed.

What is required are new “business” models that are designed from the ground up around the “social machine” of humans working seamlessly with digital, and other emerging, information technologies.  We need to engineer digitally enabled businesses from the ground up, not graft “digital” on as an afterthought.

In talking to people involved in business and management education I am still not seeing this – I still hear comments like:

“We need to have a module” or

“We’ll develop a course on ‘Digital‘”.

Wrong!!!  Digital underpins everything now, just as words and numbers do.  As Nicholas Gruen so insightfully puts it – the internet and the Web are basic infrastructures just as roads and electricity are.  Policy makers and senior managers still do not get this, to their peril.

It will be interesting to see how the NPC’s Digital Transformation Programme develops, and I am exploring ideas as to how we can amplify this work by doing a complementary programme in Australia.

There are a plethora of “social enterprise” initiatives that are harnessing the power of digital technologies to re-invent social service delivery, often in partnership with (or at least the blessing of) government agencies (my favourite is still Casserole Club).  The more these develop the more trust will be created, leading to more experimentation and innovative thinking, and more opportunities to imagine different ways of doing things.

In conversations I have had over the years it seems to me that 0ur biggest challenge is our over-regulation, our increasing aversion to risk, and our deeply ingrained expectation that the “Government” (The Nanny State) will provide and solve so many of our problems.  This, I believe, is getting worse.  Despite his focus on the current Liquor Laws there is food for thought in Tyler Brûlè‘s recent comments at Vivid this year that Australia risks becoming the “dumbest nation on Earth” because we are becoming more dependent on regulation and far less on plain old common sense.

This impacts upon all sectors, but particularly the Not-for-Profit sector because so much of the “currency” that drives it is good will, generosity and peoples’ willingness to contribute.

One way that digital can help transform this sector is by enabling the promotion of common sense and the ability to take risks in dealing with societal problems, utilising the same principles of “open” that governments have used to foster transparency, participation and collaboration.

All of this rests on developing a digital literacy, the basic fundamentals to harness the “Social Machine” rather than exploit, or be exploited by, it.  This is probably even more important for the Not-for-Profit sector than anyone else, because we are now living in a world of “data” as the fundamental currency.

More on that in the next post.