It seems that every tech company CEO today is talking about digital transformation in some way. If it’s not in the company tagline, it’s top of mind and top of deck in every sales presentation.
The reason is simple: Every client CEO is thinking about digital transformation too—and buying anything they believe will help them stave off the threat of digital disruption.
For the vast majority of these technology CEOs, however, the use of the term digital transformation is opportunistic at best. Most are attempting to shove their square legacy technology into the round hole of “digital.” Dig a little bit beneath the surface, however, and the truth is laid bare.
The messaging, keynotes and marketing speak at ServiceNow’s Knowledge17 customer conference held in 2017 followed the same pattern. Digital transformation was everywhere. That is why it was so refreshing to find that ServiceNow’s new CEO, John Donahoe, was willing to break through the hype and address the true essence of digital transformation.
The right role for technology
I had the opportunity to sit down with Donahoe to discuss his views on the role the company should play in their client’s digital transformation efforts.
“Digital transformation is a CEO issue. It’s an opportunity to innovate and transform how a company serves its customers,” Donahoe said. “To do that, companies need to devote as many of their resources to those activities and as little as possible on managing the internal enterprise. We help them manage those internal elements as efficiently as possible and free up resources through simplification and automation.”
The lesson that other tech CEOs can take from this statement is that he didn’t try to oversell the role of technology in the digital transformation process. The real nature of digital transformation is the focus on the customer and driving innovation deep into the culture of the organization.
Organizations may or may not accomplish this through technology. In ServiceNow’s case, they simply help get the distractions out of the way. But the point is that the focus must be squarely on the customer and not on the technology.
It’s about the platform, but you don’t have to choose
During the conversation, the topic of platforms was an important theme. For some time, ServiceNow has been positioning itself as a workflow automation platform.
While the focus has been on automating service management processes across various parts of the enterprise, the platform positioning ostensibly pits the company against other enterprise platform companies, such as Salesforce, Workday and potentially even SAP (among others)—as their respective offerings increasingly overlap.
“This is not a zero-sum game,” Donahoe explained. “We’re talking about the digitization of the customer experience. Around the edges, we may compete, but I view it as white space. There is plenty of room for each of us to succeed. Customers will decide how they use each platform, and the leading companies will use multiple platforms and decide how to best apply them. We will help them connect to the other platforms and let them sort it out.”
For many organizations, a platform discussion is really about creating a captive ecosystem. Donahoe, on the other hand, is positioning the platform as a means to create high levels of integration and scalability—putting the customer at the center and in control of their own destiny.
Every technology company should be thinking about how to create a platform or ecosystem—but the winners will be those that are careful to use their platform to serve the best interests of their customers, rather than their own purposes.
It’s all about cultural change
During Donahoe’s opening keynote, he shared that he wanted ServiceNow to help their clients lead their own transformations across three spectrums: building the digital workplace, digitizing the enterprise and delivering digital transformation.
The common denominator across each of these transformational elements, however, isn’t technology—it’s culture. Each of these transformations, as the name should imply, represents a significant cultural shift in how organizations operate their businesses and in how employees do their work.
“When I joined the company, I set a goal to talk to 100 customers in my first 100 days. I’m proud to say that after 45 days on the job, I’ve accomplished that goal,” he said. “Many of those customers were CEOs. And when talking with those CEO’s, the number one thing that was top of mind was cultural change. They all wanted to know how to get their teams on board with the future.”
Far too many tech company CEOs talk as if technology is the sole answer to the challenges of digital disruption. It was exciting to hear Donahoe talk candidly about the need for cultural change as one of the central elements of digital transformation.
* * *
There are no sure things—particularly in the world of technology. ServiceNow faces competition on several fronts, and those fronts continue to multiply as they expand their offerings. It is far too soon to predict how they will fare in the platform wars that are sure to ensue or whether they will be able to execute effectively on Donahoe’s vision of their future.
But regardless of how all that turns out, other tech company CEOs and enterprise executives should take notice. We have passed the point where the mere hype of digital transformation will be enough to sell anything—whether that’s a tech company selling to the enterprise or an enterprise executive selling a transformational program internally.
It’s time for technology companies to get real in their conversations about digital transformation and for enterprise executives to expect and accept nothing less.
Disclosure: ServiceNow covered my travel expenses for this event, a standard industry practice.
Founder & Institute Fellow
Charles Araujo is a technology analyst and internationally recognized authority on the Digital Enterprise and Leadership in the Digital Era who advises technology companies and enterprise leaders on how to navigate the transition from the Industrial Age to the Digital Era. Having spent over thirty years in the technology industry, he has been researching Digital Transformation long before it became the uber-buzzword of today, and is now focused on helping Digital Era Leaders prepare themselves and their organizations as the macro trends of the primacy of the customer and the primacy of the algorithm collide, ushering us into what he calls The New Human Age.
Principal Analyst with Intellyx, founder of The Institute for Digital Transformation, author of three books, and most recently the co-founder (with his wife) of The MAPS Institute, he is a sought-after keynote speaker and has been quoted or published in CIO, Time, InformationWeek, CIO Insight, NetworkWorld, Computerworld, USA Today, and Forbes.