The market is oversaturated with agencies claiming to provide digital strategy and digital transformation services. In the noisy milieu, it is at times difficult to discern a meaningful distinction between “digital strategy” and “digital transformation or DT.” The definitions are too often conflated and made messy by marketing speak. A quick search provides two working definitions from Wikipedia.
What is Digital Strategy
Digital Strategy is a plan that uses digital resources to achieve one or more objectives. With technology changing at a very fast pace, Institutions have many digital resources to choose from based on what their overall goal is.From WikiPedia “Digital Strategy”
What is Digital Transformation
DT is the use of new, fast and frequently changing digital technology to solve problems. It is about transforming processes that were non-digital or manual to digital processes. One of the examples of digital transformation is cloud computing.From WikiPedia “Digital Transformation”
What’s the difference between digital strategy and digital transformation?
Clearly, these definitions are similar enough to cause confusion. To unpack this further let’s consider “digital strategy is a plan using digital resources.” Digital strategy typically plans for existing digital capabilities: content marketing, social media channels, pay-per-click, search engine optimization (SEO), e-commerce websites, etc. Often the plan is tied to a marketing strategy or marketing campaign. At times digital strategy is synonymous with “digital marketing strategy.” A digital strategy will plan how each channel is utilized in the service of marketing. In the end, digital strategy is directly tied to execution within an existing digital capability and is mostly related to marketing activity.
What defines digital transformation?
On the other hand, DT is more holistic than marketing alone. My preferred working definition of digital transformation comes from Didier Bonnet‘s “Leading Digital.” In brief, the defining characteristics of a DT are a focus on consumer experience, operations process, and digitally enabling or transforming the business model by enabling digitization. So fundamentally, DT is defined by increasing digital capabilities across the business, not just marketing or digital channels. Of course, there is still very much a planning component of DT. The scope of the plan however is much wider than digital strategy alone.
“To sustain Transformation, do 3 things; build foundation capabilities, align incentives and rewards and measure, monitor and have a continual review in place.”From “An Executive Summary: Leading Digital“
As you can see in the visualization above, digital transformation builds on the three pillars of customer experience, operational process, and business models, that are supported by a foundation of digital capabilities. While governance and digital engagement support a transformative digital vision.
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