What is digital? Explaining digital as a concept can be difficult – especially since there is an entire sector seemingly dedicated to making it seem exceptionally complex.
Also, the definition of digital is often kept intentionally woolly by those that benefit from the ensuing ambiguity.
However, it is well worth taking the time to understand the concept of digital. Once you understand how the ecosystem fits and works together, it’s much easier to understand why people get so excited about the concept of digital transformation. If you run an enterprise where your digital, web and IT teams are separate (or worse still in entirely different divisions), it also helps to explain why your managers spend so much time fighting and/or adjudicating turf wars over ownership of digital.
Digital has become such a hackneyed term that it now is almost meaningless as an adjective. In the early days of digital re-mastering of music, digital used to be used to distinguish between digital data recorded as bits and bytes and non-digital data typically recorded as electrical signals. In those days it was vaguely helpful in ensuring that you bought the right hardware for the data format you had.
Now, everything produced by a new system is digital data (more on this later) so digital as a description in this way is no longer very useful. Therefore, “digital”, is more useful as a noun than as an adjective. It is a thing in itself rather than a description of a type of thing.
So what is that thing?
In a practical sense, digital is an ecosystem that increasingly makes everything around us run. It is made up of five components. From a business perspective, it is critical to understand the digital landscape, what those components do, and how they should benefit your business.
But the components of digital can be so ethereal, that it’s like describing colour.
Instead, let’s talk plumbing.
Think of the plumbing in your house. Your plumbing is a contained ecosystem designed to move fluid around. The fluid that flows around your system is a common currency.
All of the pipes, devices and interfaces understand what that fluid is, and move it around the system seamlessly. Now imagine that instead of one pipe feeding water in, you have hundreds of small tanks – each capable of producing and storing significant amounts of fluid for you to use. This is your technology infrastructure.
Because all parts of your plumbing ecosystem work off the same currency, your system is remarkably efficient and, in theory at least, infinitely scalable. Your system can be extended to talk to other systems – as long as those systems are also designed to deal in the same fluid currency.
In digital terms, instead of fluid, your digital ecosystem creates, stores and moves data in a format where everything is converted into a fluid stream of 0s and 1s. This is what people mean when they refer to binary data.
Data is the fluid that courses through your digital plumbing ecosystem. The more data sources that contribute to your ecosystem, the more powerful and potentially economical your system becomes. Ultimately, this is the catalyst for the benefits of digital transformation that people talk so much about.
Interfaces and Apps
At the edges of your plumbing ecosystem you have taps, so that users can interface directly with the fluid. These draw the fluid in your system to the edges in a manageable way, and presents it in a way that makes sense to humans and creates new value.
In the digital ecosystem your taps are the many visual interfaces that your systems provide that allow you to view, control, and manipulate the raw currency pulsing through your systems. When you open a spreadsheet in excel you are drawing data into an interface that then allows you to interface with it. When you double tap a weather app on your phone you are opening a tap and drawing Bureau of Meteorology data that has been converted to consistent binary data “fluid” into the interface so you can use it.
You also have the option to plumb other systems and devices directly into your ecosystems to use the fluid in your system for different things. Think about the icemaker in your fridge or the expresso machine you had plumbed directly into your water system. These take the raw fluid and convert it into new forms for entirely different purposes. To stretch the analogy a bit, think about systems that use water pressure to control physical actions like turning on and off switches.
Your plumbed systems might well be your administration systems. When you integrate your finance, HR and payroll systems, you effectively plumb the piping from each system together so that the data from each is accessible to the other systems.
Not only can you make new things from the currency running through those systems, you can make the whole ecosystem faster and more efficient by removing redundant lengths of shared plumbing.
Sharing the love with external systems and APIs
Sometimes you might have valuable data that you want to share with your neighbour’s ecosystem. In this case, much like your plumber might leave a pipe tied off for later use, you might create an open pipe for others to use that can access some of your tanks without disrupting the overall water pressure.
As long as your neighbour has permission to open the pipe, they too can draw in some or all of the data from your ecosystem into theirs and let their systems do new things with it. This is the purpose of an API (application Programming Interface). APIs are a growing trend amongst companies producing high-value data, and can open doors for collaboration and production of new value.
But it’s about more than just getting value out.
Digitisation – the art of bringing new things into the ecosystem
Imagine that you could theoretically bring in almost any substance into your plumbing network and integrate any process so that your household could benefit from the efficiencies of a single ecosystem.
This system could combine the data from all of the networks feeding into it to give you insights that improve the way your house runs. It could also provide fast, user-friendly interfaces to carry out the key processes that you need to do to manage household tasks. As an added bonus, using these digital processes means that new data immediately flows back into the system.
Sounds great doesn’t it. The catch is that most older businesses, like most older houses, have old systems producing data in forms that the ecosystem can’t use. In order to make it accessible, the substance needs to be converted into the binary form that the system understands.
In digital terms, this is digitising – the act of converting a process, a system or a pool of data into a binary form that makes it portable and capable of being used within the digital ecosystem.
More and more companies recognise the value of bringing their data and processes under the one digital roof.
The conversion mission for most companies takes the form of –
a. legacy data digitisation; where records stored in other forms are digitised and added into the digital pool, and
b. system digitisation, where current processes are reviewed and re-engineered as digital experiences – such as converting a manual sales process so that it uses an ecommerce platform.
This has two benefits – the first being to create contemporary, online experience for users (staff and/or customers) and the second being to ensure that the ongoing data produced by the process is natively digital. This makes it immediately available and avoids a growing backlog of non-digital legacy data.
Once converted, the data produced is available to, and in turn able to use the same technology infrastructure, interfaces and integrated devices as the rest of the system.
It is the potential presented by this rich vein of digital data, and the creation of digital systems that create new data on the fly that has given rise to the big data/data science movement – and made being a data scientist one of the hottest gigs around.
It is worth noting that a true digital transformation process is far more holistic than a like-for-like conversion. The way that users interact with the systems and their data is paramount, and true digital transformation seeks to reinvent processes and look to create new value in lots of areas of an enterprise – rather than simply taking an often average physical process and replicating this online.
Plumbing aside – what is digital?
In essence, your digital ecosystem has five notional components –
1. Data sources and plumbing (technology infrastructure),
2. a common fluid currency (data in digital binary form),
3. direct interfaces (apps, software and any way that humans interface directly to view and manipulate that data),
4. integrated devices and systems, and
5. remote systems that are capable of sharing and combining data in a way that provides business insight and the opportunity to make new things.
With all this in mind, the answer to the question “what is digital” defines a full ecosystem that runs on a common currency of (binary) digital data. Digital uses the pipes and hardware of an extendable technology infrastructure as the basis for storing, moving and using that digital data. It also uses that technology infrastructure as the delivery platform to create new and contemporary user experiences that are faster and better for the end user, get better results for the business and feed digital data back into the ecosystem. The result is to provide insights that point to new value and new opportunities.
(This article forms part of our “What is” series. This series is intended to remove the mystique and provide a working, practical guide to the key components of the digital landscape. )