Digital Transformation: What Is It?

One of the prominent buzz phrases of the day in regard to technology strategy is digital transformation. This term is used by all sorts of organizations, in all sectors, to sell products, conferences, and webinars. Yet, there is also a very real side to this phrase that is changing every industry, from retail to health care to education.

At its simplest level, digital transformation means transforming an organization's core business to better meet customer needs by leveraging technology and data. In education, that target customer is often students, though it could also be faculty, staff, alumni, and others. As an example, a digital transformation aimed at transforming the student experience might include items such as

• recruiting students digitally, using social media and text messaging as part of a data-driven decision process;
• allowing students to register via their mobile phones on scalable cloud-based student information systems;
• providing a variety of online learning options so students have enough courses to choose from at key points in their academic career;
• working with faculty and programs to convert courses to flipped and blended models;
• using technology to monitor student progress and success metrics and execute intervention protocols; and
• partnering with industry to provide digital badges and certificates to enhance career opportunities.

Combining these items into a wide-ranging digital transformation, groups across the entire institution would work together to put the student experience first. Further, the institution could combine data from the new digital processes to decide on and power its next transformation.

Four Goals of Digital Transformation

The focus on the customer is the most crucial element in digital transformation. Tom Loosemore, founder of the UK's Government Digital Service agency, summed up this concept in a May 20, 2016 tweet: "Digital: Applying the culture, practices, processes & technologies of the Internet-era to respond to people's raised expectations." The extraordinary value of meeting these increased customer expectations has dramatically changed business models, with examples from Amazon to Airbnb to Uber.

It stands to reason that a supportive organizational mind-set is a key component for success. Janet Hughes, former program director at GOV.UK Verify and prolific author on digital initiatives, describes digital as "how you think, how you behave, what you value, and what drives decisions in your organization."¹ Dion Hinchcliffe, vice president at Constellation Research and chief strategy officer at 7 Summits, states that the "complexity and pervasiveness of the necessary changes" will necessarily involve an organization's culture and mind-set.² Very simply, if your institution is not ready and open to change, it probably won't.

Peter Sondergaard, a senior vice president at Gartner, Inc., views technology as the enabler of digital transformation, which is driven by four goals³:

• enhanced competitiveness,
• higher profitability,
• better customer experience, and
• greater agility across the enterprise.

Each of these elements deserves a closer analysis in the higher education context.

Transformation Goals and Higher Education

Although some of the wording may seem out of place, there are many ways to apply the four elements of digital transformation to the business of colleges and universities.

Competition

Competitiveness is certainly a factor in higher education; indeed, the US Department of Education found that the number of colleges and universities has increased dramatically over the past 20 years.⁴ The Economist determined that, more recently, this competition was spearheaded by for-profit institutions and a few new kinds of competitors that hope to reimagine higher education.⁵

Profit

While profitability may seem like a non sequitur in the realm of nonprofit institutions, many state and private institutions are under ever-increasing pressure to cut costs, justify tuition prices, and improve outcomes for students.⁶ Of course, similar discussions of value proposition (framed slightly differently) are faced by every business and nonprofit around the globe.

Customer Experience

Although faculty and staff experiences are of course important, in higher education today the customer experience is more often focused on student experiences, including learning outcomes, retention and graduation rates, employment rates, and initial salaries.

In design thinking methodology, we would view customer experiences through the lens of touchpoints and journey maps. If we apply this approach to student experiences at colleges and universities, the student customer journey — from recruitment to enrollment and matriculation to graduation and employment — can be a fertile ground to address and improve a multitude of related issues across the institution.

At the January 2018 EDUCAUSE Learning Initiative Annual Meeting in New Orleans, keynote speaker Bernard Bull, who is vice provost for curriculum and academic innovation at Concordia University Wisconsin, corroborated this point, remarking that "admission and enrollment is [now] a teaching and learning issue." This statement reflects the core concept that these administrative functions, historically separated from the academic mission of the institution, are now increasingly seen as key elements of an overall student experience at every school. It also reflects the view that a failure to address a broader context of student experience could be a competitive shortcoming in this next generation of higher education.

Agility

As you might imagine, trying to define and address every touchpoint with a given student from an initial recruiting function (or a Google ad click) to commencement and beyond is a huge endeavor. In fact, the only way to approach such a large initiative is to increase agility across the enterprise, from communication to collaboration to implementation. If the institution can't communicate and implement new solutions across its functional silos and ingrained ways of doing things, digital transformation cannot occur.

The process is daunting: Which people on campus have touchpoints with students? Who has data that can be leveraged to improve experiences? The answer to both of these questions, of course, is everyone.

Transformation Models

In the 21st century, technology and data are combining all four elements of digital transformation to transform higher education — just as they have transformed other industries.

Like many institutions, the University of St. Thomas has been moving down the path of its own digital transformation. Figure 1 visualizes results from Gartner's 2018 CIO Survey, which found that 51% of education CIOs are in the Designing and Delivering stages of this transformation; at St. Thomas, I believe we are right in the middle of these two phases.

As the terminology implies, organizational mind-set is what separates the No digital initiative institutions from those with Desire/Ambition. To move from Desire/Ambition to the Designing and Delivering stages, however, requires a framework that can be effectively communicated to key stakeholders and decision makers. The framework I designed for St. Thomas is based on Gartner's digital ecosystem model (see figure 2).

In the Gartner model, customer experiences (the Engage element) are combined with data collected from internet of things (IoT) devices (Sense) and core IT systems (Run) to create a combined data set for analysis. Digital ecosystems (Interact) such as APIs and citizen developer initiatives provide new collaboration platforms to make the organization more nimble and innovative. All of these data and the work from the ecosystems are combined in the center to create organizational intelligence (Decide) to inform and power the next transformation target(s).

Similarly, Hinchcliffe's description asserts that the digital transformation focus is on "building and wielding customer-facing experiences infused with digital business models, interconnected ecosystems, services built on top of the internet of things, with many flavors of artificial intelligence to make it personal and differentiated."⁷

Digital Transformation at St. Thomas

As figure 3 shows, I adapted the Gartner model to my institution's specific needs to create a platform for continuing transformation. The St. Thomas model retains most of the original model's elements but also includes several important differences. The framework's goal is both to establish a strategic platform that can power change and to convey possible targets and each component's massive potential.

Customer Experience

Our version of customer experience is to ensure that every digital interaction, whether it is on a registration screen or during an online course, is designed to maximize engagement and minimize frustration. And, of course, we are not limiting our focus only to students, because faculty and staff also deal with all sorts of unwieldy processes and systems. Are we there yet? Certainly not. But this is a compelling goal that is easy to communicate and understand, and the entire campus can get behind it and help us prioritize the most important items.

Partnerships

Along this line of thinking, in our platform, I changed Gartner's Ecosystems label to Partnerships. Going back to the earlier point about organizational mind-set, a shared urgency and vision for change are critical to establishing any foothold on the digital transformation path. While open APIs and citizen developer initiatives are nice to have, without strong interorganizational partnerships, such initiatives are much less valuable given the typical higher education institution's highly decentralized organizational model.

Research on digital transformation highlights this problem for colleges and universities. Hughes calls for a "free, fast flow of information" so that teams can function "as a network rather than a hierarchy." These teams must be empowered to experiment and "fix things that they can see are broken" under a flexible governance model that "supports rapid experimentation, learning, and iteration."⁸

Accordingly, Hinchcliffe warns that a central technology organization usually does not have enough knowledge about the business to redesign and transform it; he therefore advocates for "more decentralized yet highly engaged entities like empowered groups of change agents."⁹

These goals, while laudatory, may be hard to imagine in an environment that includes department-to-department, college-to-college, and administrative-unit-to-administrative-unit silos. It is therefore critical to have an engaged administration and governance body to help prioritize and move digital initiatives forward. It is also critical to develop strong relationships and partnerships, both inside and outside the institution. Such partnerships are critical to success, and not having them will almost certainly lead to failure.

Smart Technologies

I also changed Gartner's Things label to Smart Technologies. While IoT devices such as Fitbits and Amazon's Alexa are starting to take hold in the consumer world, I believe a larger category of responsive smart technologies — such as chatbots and sentiment-analysis tools — can be integrated with IoT devices to help transform education in the future. For example, my team recently presented a sentiment-analysis engine that captures general reactions of audience members and creates an engagement chart that can be reviewed after the event. Could such a tool be repurposed for the classroom? Or even for virtual classrooms?

Our team also partnered with the university library to build a Q&A bot, which is integrated with our current library systems. At this point, the bot can field questions about basic research topics, find relevant results, and even reserve materials for customers. We hope to expand this service to other areas of the university, thereby helping provide 24-hour basic support while also ensuring that more-difficult issues are escalated to human experts.

Core IT

Naturally, the foundation for all of this work is a resilient, secure, agile, and flexible infrastructure. Indeed, many services have been moving to the cloud for these same reasons. Regardless of the digital initiative you are working on, you will need fast, reliable, and secure networks and servers to provide the agility and flexibility modern IT customers demand.

That said, even for this core IT component, we take the customer experience very seriously. For example, as we moved our enterprise resource planning system to Amazon Web Services, we ensured that access and response times were as good as or better than they were on campus. We also simulated the load of 10,000 simultaneous registrations to determine how to improve sluggish performance situations. In the past, these registration windows caused long delays and substantial frustration for students. As a result of our cloud migration, we were able scale up our server environment immediately to provide a seamless experience at any level of server load.

Digital Strategy Development

While Gartner puts Intelligence at the core of its digital ecosystem, I have instead used Digital Strategy Development. The Gartner model's focus is on bringing data into the ecosystem's center to create actionable intelligence. In my model, I placed my team — and effectively every other team on campus — in the center along with the data. These team members must be empowered, well trained, and open to change. They must be effective at using new technologies and data to uncover new possibilities and be capable of building relationships and communicating those possibilities to the entire campus.

To meet these needs, I have invested heavily in leadership development, professional development, and technical training. We partner with other units to deliver workshops for the entire campus, from pedagogical methods to the effective use of collaboration tools. We conduct brainstorming sessions and ask unit leaders to share their vision for the future at regular staff meetings. And, of course, we invest in technologies that we believe will help the university become more nimble and effective. These investments and partnerships help build the "decentralized yet highly engaged [and] empowered groups of change agents" that Hinchcliffe calls for in his paper.

At this point, we are working with every college, as well as offices from faculty development to advancement to student affairs to the registrar. While putting this together may seem like a tall order, it is surprising to see how many people are willing and excited to join together to help change things for the better, especially when it comes to serving our students. Again, having a common goal and a shared vision is foundational to success.

How to Get Started (or Continue Down the Path)

With an established digital platform like the one above, you can begin articulating potential targets for transformation initiatives. (It can be helpful to think of the platform as the "how" and the targets as the "what" and the "why.") At the core of every digital transformation initiative is a deep understanding of the customer journey and the obstacles that customers might face along the way.

Creating a Map

One potentially helpful way to approach the customer journey is to break it down into several large components and then map touchpoints to those components. For example, a student journey may start with recruitment, then proceed to enrollment, and then to matriculation, graduation, and advancement. Each of these categories would contain hundreds of touchpoints and opportunities for improvement.

In my experience, it is helpful to go for big wins and small wins simultaneously. As customer-experience expert Adrian Swinscoe points out, these small wins can have big impacts: "Little things if not addressed can add up and together pose serious problems for our businesses and [their] customer experiences."¹⁰ Small victories also help build credibility for larger initiatives with transformative potential.

Before You Begin: Seven Questions

The Harvard Business Review( HBR) article, "7 Questions to Ask Before Your Next Digital Transformation"¹¹ offers further guidance in this process. I paraphrase the article's questions here, along with a brief discussion drawn from the article and reflections on the questions based on our lessons learned at St. Thomas.

Is your project a digital upgrade or a digital transformation? The article defines digital upgrade as using digital technology "to increase efficiency or effectiveness at something your firm is already doing" and digital transformation as using digital technology to "change the way you operate, particularly around customer interactions and the way that value is created."

In my experience, having a good balance between digital upgrades and digital transformations creates greater opportunities for both. That is, the small wins (such as upgrading from a manual to a digital process) will build capabilities and support for digital transformations across the customer experience continuum. To truly transform a business, you need strong partnerships, a shared vision of the future, and integration of systems, processes, and data.

Do you have buy-in from the CEO and the CEO's leadership team? As the HBR article notes, "Most leaders have decades of experience focusing on assets like plants, real estate, inventory, and human capital. Shifting away from these habitual priorities takes self-reflection and openness, and often a concerted effort to build new patterns in thought and action."

A big part of your job as the CIO and chief digital advocate is getting the institution's leadership to understand the business opportunities (such as increased competitiveness, agility, revenue, rank, and/or reputation) that new technologies and approaches can afford. It goes without saying that you must believe in these things yourself to be an effective advocate and partner. You also must understand and be able to articulate how new technologies and approaches can make the institution better.

It helps to create a framework that people can understand and to map potential initiatives to that framework. It is also important to be transparent with your stakeholders and your governance group and involve them in the prioritization process. (If you don't have a governance group, form one ASAP.) These things will help you maintain and defend your priority list items in an environment of constantly changing needs.

Are you prepared to share value creation with your customers? Although the HBR article notes that workload sharing "seems like an obviously winning proposition," it goes on to acknowledge that "many leaders are hesitant to relinquish control and rely on a network that lies outside of their chain of command. Working with these external groups requires new, co-creative leadership styles, but also can allow organizations to tap into enormous pools of capabilities and under-utilized resources."

In my view, there are two issues here. First, if you are worried about the credit you are going to get, you are doing it wrong. For example, if you can help your advancement office transform its ability to use data in support of future endowments and scholarships, your team certainly deserves praise, but your advancement office deserves even more for having the vision and the courage to change. The biggest wins are the ones that include stakeholder units across a broad spectrum of functions (including academic, administrative, and service units).

Second, remember that increased organizational agility is one of digital transformation's key goals. Thus, you must empower localized teams to act swiftly on new opportunities and help spread the word about those opportunities across the institution. You may already have expertise in making something exciting happen very quickly at your institution in collaboration with other units. Don't get hung up on ownership of the solution; instead, stay committed to improving the customer experience across the board. It is especially great when your team works directly with other teams on a solution because such a collaboration clearly demonstrates a shared vision.

Have you put walls around your digital team? The HBR article observes that organizations do not typically change their internal structure during digital transformation. As a result, "the teams working on these transformations get slotted into the existing structure." However, a team's location — both physically and in the org chart — can "affect its ability to influence the cross-functional groups integral to real digital transformation."

When working on transformational initiatives, don't limit your team to IT staff and a small group of frequent partners. Rather, use a customer journey approach to include units that are part of the customer experience — which might include nearly everyone — and that deeply understand the business so they can highlight areas of opportunity for digital upgrades and digital transformation.

Also, don't forget the opportunities that vendors provide. Partnering with vendors and their teams is a great way to leap forward quickly with new capabilities. In my experience, vendors get excited when an institution can articulate an urgent need that they might be able to work toward together.

Do you know how to measure the value you intend to create? Digital transformations can fall outside an institution's traditional key performance indicators. As the article notes, it is thus useful to track intermediate indicators such as sentiment, engagement, value sharing, and network co-creation.

A great way to share a compelling story about success is to demonstrate and describe before and after states. For example, if you have changed your registration process because it was slow and frustrating for students to navigate, collect stories and demonstrations that show the inefficiencies in the old process. Showing off the new system — and its metrics on improved response times and student satisfaction — will help win over any unbelievers.

Are you ready to make the tough calls about your team? The article's authors say that, based on their experience, "nearly half of your team and board will need to turn over during the course of a successful digital transformation. Although painful, it's really a good thing for the organization — creating balance between the old and new."

Given this, it is extremely important to empower your team members with professional training and professional development, including leadership development. You can then make your expectations clear:

1. You expect them to understand how their activities relate to the institution's business and hope that they will partner with customers to improve experiences and transform the institution.
2. You plan to enable local groups to find and act on opportunities with other groups rather than exert centralized control.

Although some of your staff may not appreciate the accompanying changes in roles and expectations, the remainder will be closely aligned with this new direction.

Will you be ready to spin off your digital business? As the HBR authors describe it, "sometimes the upstart inside the organization becomes bigger and more valuable than the parent that gave birth to it," or the upstart might have trouble attracting the right talent. In other cases, turf wars can emerge between digital and legacy teams. To enable both the parent and child to continue growing, it is often necessary to separate them.

While this point might seem remote for many institutions, I would frame it slightly differently, suggesting that you consider this advice from your institution's current situation and build from there. For example, if your institution has never focused on online learning before, developing a strategy for delivering high-quality online learning could be transformational. The magic is in determining how such a transformation would make your institution more competitive, more agile in meeting emerging needs for specific academic offerings, and so on.

Two Questions for the Change Process

Finally, two more questions — these from Commvault's whitepaper Digital Transformation: The Full Monty¹² — are extremely important to consider while your institution is undergoing the changes associated with digital transformation.

How will you manage legacy systems as IT transitions to new technologies? Focusing on older systems might seem odd in the context of digital transformation, but failing to consider them will lead to overtaxed teams and potential failures if the organization takes on more than it can handle or afford.

How do you plan to mitigate risk and protect data as your organization migrates to a digitally driven enterprise? Security is important, and it becomes even more so as you aim to achieve the sometimes-competing goals of securing personal data while also conveniently sharing data across platforms.

A Journey of Change and Empowerment

Although technological advances have set this new generation of transformation in motion, as best-selling author and digital-disruption expert Charlene Li notes, technology itself is not the biggest obstacle to digital transformation:

The biggest barrier to digital transformation is culture — and leadership drives culture. Getting buy-in throughout the organization, and employing digital technology via social media and employee advocacy channels to further communicate the value of digital transformation, is a critical part of ensuring success. In parallel, making sure you have a thoroughly developed IT strategy for actualizing this digital transition is the "make it or break it" part of the picture.¹³

Like many of you, I am excited to be a technology leader during this time of incredible change and opportunity. I believe that our technology organizations are key partners for transforming higher education to be a more empowering and customized experience for our students, faculty, staff, and stakeholders. With strong partnerships across and beyond the enterprise, many wonderful things are possible and achievable.

I look forward to keeping all of you informed as we continue on our own digital transformation journey at the University of St. Thomas.

Notes

1. Janet Hughes, "What a Digital Organisation Looks Like," doteveryone blog, Medium, June 6, 2017. ↩
2. Dion Hinchcliffe, "Digital Transformation in 2018: Sustainably Delivering on the Promise at Scale," On Digital Strategy, January 5, 2018. ↩
3. Gartner, Inc.'s free "Creating Digital Value at Scale" webinar is a special report based on the opening keynote of the 2017 Gartner Symposium. ↩
4. "Fast Facts: Educational Institutions," National Center for Education Statistics, Institute of Education Sciences. ↩
5. "Higher Education: Not What It Used to Be," The Economist, December 1, 2012. ↩
6. Jeroen Huisman and Jan Currie, "Accountability in Higher Education: Bridge over Troubled Water," Higher Education, Vol. 48, No. 4, 2004: 529–551. ↩ ↩
7. Hinchcliffe, "Digital Transformation in 2018," 2015. ↩
8. Hughes, "What a Digital Organisation Looks Like," 2017. ↩
9. Hinchcliffe, "Digital Transformation in 2018," 2015. ↩
10. Adrian Swinscoe, "The Little Things that Destroy Your Customer Experience," Forbes, February 14, 2014. ↩
11. Barry Libert, Megan Beck, and Yoram (Jerry) Wind, "7 Questions to Ask Before Your Next Digital Transformation," Harvard Business Review, July 14, 2016. ↩
12. Commvault UK, Digital Transformation: The Full Monty, The Register, April 2107. ↩
13. Charlene Li, "The Top Digital Transformation Priorities for 2016," Prophet, February 4, 2016. ↩

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Edmund Clark is the CIO, Chief Digital Officer, and VP of Information Technology at the University of St. Thomas.