1. What is Digital Transformation?
A regular city person of 21st century has one identity but manages his presence in two worlds, one being the Earth, and the other one being the virtual world! From an era, where a school kid learnt alphabets by writing on a slate, to today’s world of smart classes, the world has experienced a swift shift in the technology. But these shifts are more than just Digital Doings, these are Digital Innovations.
Similarly the business market has experienced a transition from real time functioning to digital platforms, where the transition was not just about transforming into an online business, but a complete intervention of digitalising the elements of a business, marking a presence in the digital world.
In a simplified manner we can understand the term Digital Transformation as Adaptation of a business in the Digital Business Ecosystem, and adoption of Technology to sustain in market and create new business opportunities.
Whereas, technically Digital Transformation can be defined as a Shift in the fundamental business thinking, where a business adopts technology supported methods, to empower the employees to perform efficient business processes, to compete significantly and create new opportunities in the fast growing digital world.
The interactions between the internal elements within a business are modified to be more efficient, to be more effectively responsive towards the dynamic market. A larger platform for a better connectivity and understanding of customers is established. The successive increments in the digital spread creates a scope of new digital products and digital possibilities, and digital transformation makes a business able to reach that potential to create new opportunities.
What it is not:
Building a website or making products available online does not significantly makes a digital transformation. Inheriting new technologies does not compulsorily point towards a digital shift.
Using a digital platform and being technically advanced are two different things. A person might be using an abacus to calculate in the old age, and shifting to an onscreen calculator of the laptop won’t probably be termed as a Digital Shift. Whereas programming a function to automatically take the data, make calculations, and push the result data for the next process, saving time and human efforts, can be termed as Digital Transformation!
Digital Transformation was an opportunity for the innovators, and it has created a wonderful virtual platform for the Customer & Business interactions, that it has led to a change in customer trends, creating a need of transformation for the old school businesses. Neither all the businesses nor all the elements of a business need to undergo a digital transformation, depending on the business objectives. But, for a business to be trending amongst the people, it has to be trending where the people exist. Britannica is one such name that transformed to digital providing a wider platform to its readers.
2. About Encyclopaedia Britannica, Inc.
Encyclopaedia Britannica started its journey in 1768. It was founded by Colin Macfarquhar and Andrew Bell. Over the years EB continued to embrace new technologies. They even published multimedia encyclopaedia on CD-ROM and launched online subscriptions and also provided its material to colleges, libraries and Universities through internet. In 2012 Jorge Cauz president of Britannica announced that they would be stopping their printing business the whole world took notice. Insiders knew this was coming and they had planned it for last 35 years, but for the outsiders it was a shock because after 244 long and epic years the iconic reference publisher was thinking about going all digital. It was their final stage. Employees in Chicago’s offices even celebrated this occasion as dawn of a new era and transformation into digital age.
The company was not only using digital means to sell their products but was also making digital products. It was marketed in schools and colleges under a new name “Britannica Digital Learning”. Now the question is whether EB truly transformed digitally or is it just a term they are using. But EB changed its methods not today but long ago when Wikipedia came into existence. They saw the future possibilities and started working then only to change traditional ways to deliver facts and knowledge to people. This change also helped them to provide better services which helped them compete effectively.
EB saw this very early when their sales of encyclopaedias was going down from 100k in 1990 to just 3000 in 1996. So they evolved and they were ready to go online in 1994. One of the biggest benefit of going all digital for EB was that they were now able to track and gain deeper and clear insights on how their customers uses their product. Company’s senior vice president said “Online products let us be more intimate with customers. We communicate more frequently and respond to them better.” They were able to change their products according to customer needs and which resulted in increased customer loyalty. In an age of unlimited free information where everything is just a swipe away their biggest assed was still trust of people and credibility of their information.
Britannica still offers their encyclopaedia copies to some selected customers based on online promotional offers for people who wish to keep a hard copy to showcase.
3. Digital transformation of Britannica-
As suggested by Mary K. Pratt, digital transformation is not an overnight activity, rather it requires years of planning and implementation. In case of Britannica encyclopaedia, it can be seen clearly observed that it was in 1996 when they first decided to involve technology in their business model. Initially, the company faced disturbance due to introduction of CD-ROM encyclopaedia in 1994 as not many people really had the scope to access computers and internet, which was later fixed in the year 1998. With the introduction of internet to the citizens of the US, the UK and Australia, online searching of reading materials and information started and found it much easier to have information available at the web. Britannica observed change in the response to the introduction of online services at the end on of the century and gradually it became popular among the internet users.
Britannica did not transform their business neither did they stopped what they were known for, they just changed the platform for providing information to its customer. Initially, switching from paper back to online was a big step for the company. They were in a fix about whether or not to announce that they won’t be publishing any more of Britannica and that the information that we earlier found printed on a paper would now be available on the web only. But with the increased usage of internet and technology, they were able to maintain their popularity amongst its customer.
As per a common myth, it is considered that every company needs to transform digitally to survive in the market. To this Ken Hanly says that if a company is performing well and is gaining good profit in the market, it need not to go digital. Considering the case of Britannica, we can say that the president of Britannica and his team has foreseen the future once the internet hails in the life of people. They rightly calculated that the young generation would be more interested in reading online from the screens of their laptops and smartphones. Switching to digital world was a result of this observation that helped the company to maintain its position in the market. Britannica transformed digitally because it was profitable for it. Initially when CD-ROM encyclopaedia were introduced, the profit margin for the company was less as it was shared among the CD providers, vendors etc. But with the introduction of online platform, the profit margin was much higher than earlier.
According to Gerald C. Kane, using new technology to do business and grow in the market is one of the main reasons of digital transformation of any company. Transformation of Britannica from printed books to online information booth can be stated as a digital transformation as it helped the company to maintain its positon and also increased its customer base by being available online. Though the decision to culminate publishing the hardcopy of encyclopaedia was a tough decision, but it proved right when the world got hugely transformed with internet becoming an essential part of life.
Britannica found that Wikipedia was getting popular among the youngsters because of the information available as anybody could add or edit information on Wikipedia. As this was not the case with Britannica and it experienced difficulty maintaining its position in the market, still the company decided not to change its business model and stick to what they are known for- Quality of information and language. As commonly perceived in context of digital transformation that to transform digitally, a company needs to completely change it business model, yet Britannica did not change its working model and continued to provide information in fine quality English language and managed to conquer the knowledge market.