What does ‘Digital Transformation’ Really Mean? With hedgehog lab Director‚ Rob Bellingham


8th October 2021


10 min


Scott Batchelor

All too often digital transformation becomes a buzzword for organisations that need to react quickly to market change. With lots of providers using different definitions of what actually makes up a ‘transformation programme’‚ it can be difficult to determine what it actually means to undertake one of these services.

We sat down with hedgehog lab’ Director Rob Bellingham to discuss the definition‚ the possible benefits and barriers of digital transformation strategies‚ and whether automation forces you to restructure.


What Really is ‘Digital Transformation’?

The term digital transformation is‚ in itself‚ tricky.

If a successful product roadmap recognises the evolving wants and needs of your users‚ then there should never be a single moment that a business ‘transforms’. Rather‚ transformation should be happening constantly and consistently.

So why does the term exist? Well‚ what do you do when you haven’t evolved and the market has caught up to you‚ with new challengers beginning to eat away at your user base?

This is where the hedgehog lab definition of Digital Transformation comes in‚ it’s the gap between expectation and realit. We see the process  primarily as an exercise of understanding and recognising the issues in your business that affect your ability to remain competitive. Based on this understanding‚ we build bespoke solutions that tackle the problem at its core‚ tracking and measuring against your internal KPIs to ensure success.

It is worth mentioning though‚ that ‘digital transformation’ never has a definable end date. As these new processes or technologies are set up‚ they must be maintained and developed to ensure that you remain ahead of the curve. 

If you fail to consider how this new technology will continue to shape your business you will be forced to undergo a similar‚ potentially costly‚ project further down the line.

Digital Transformation in Fintech

A really good example of how digital transformation requires you to consistently innovate has been seen in the Finance industry over the past 5 years: 

Challenger banks such as Starling and Monzo were beginning to provide really competitive solutions‚ with a customer centric‚ mobile-first approach. They approached and engaged with their users and account holders from the start of their journey‚ they effectively produced banking solutions that operated in the way the customer preferred. 

Meanwhile‚ traditional banks still required you to have meetings with your bank manager‚ deposit cash in-branch and align your trips with rapidly-shortening opening hours. They needed to react‚ they needed a digital transformation programme.

Challenger banks don’t need digital transformation programmes‚ but they served as a catalyst for change when traditional banking started to lose market share. 

Now‚ according to Finder UK‚ over 14.5 million UK residents have personal accounts with challenger banks‚ with over 1/4 of all Brits having at least one form of digital-only bank account.

This is the dirty secret of how digital transformation starts:  Established stakeholders have realised they are either losing or have lost their competitive edge‚ and need to quickly react to internal inefficiencies. They are forced to rapidly innovate. 


How Do You Recognise Areas that Could Benefit from Digital Transformation?

A lot of the time issues are based on the fact that the process in house or the lack of innovation from their incumbent technology suppliers has become a problem.

If it’s an external supplier platform‚ you may have a legacy platform that has had its licence renewed endlessly and it no longer has the flexibility required to perform. If your development or tech partner does not continuously evaluate the suitability of your products and look for new opportunities‚ it can be difficult to ascertain which way to move forward with your software.

If it’s an internal problem‚ it’s typically one in which the team doesn’t have the provision or motivation to grow and change. This occurs when people are limited by the resources they have‚ the budget allocated to the development of their department is not enough to be competitive.

Those are two of the main early alarm bells in my experience‚ external drop-off or internal insulation‚ but there is really no clear ‘catch-all’ answer.

Recognising the opportunity for digital transformation is something that transcends departments‚ and it is often not just a ‘tech’ issue. Whilst technology provides a way back into a changing market for a lot of people‚ it is a cultural change that businesses must undergo to survive. 

How COVID Forced Digital Transformation for the Unprepared

COVID put digital transformation services under a microscope. In March 2020‚ as businesses shut around the UK‚ and employees were forced to work from home‚ a lot of employers were forced to quickly adapt to the new mode of remote working.

Previously‚ they may have used a local VPN‚ they may have not had cloud-based software‚ they might have even had everything running through a black box underneath the kitchen sink. These things that had previously been a normal (if archaic) part of operations became sticking points for the businesses’ survival.

In the space of 24 hours‚ employers were presented with business-critical issues across their entire operation which needed critical and prioritised attention.

This‚ like many digital transformation projects‚ was a reactive process‚ but was completely unavoidable and the experience of the vast majority of businesses. That being said‚ it was those that took a calculated approach‚ testing and ensuring that their new solution was correct and scalable before implementation‚ that returned to normality much more quickly. These organisations not only survived the pandemic but they have a strong competitive edge to react to the new demands of the market 


Does Digital Transformation mean reducing staff numbers?

Arguably‚ one of the most popular debates surrounding digital transformation is ‘Man vs Machine’‚ and whether bringing in new technology requires you to reduce internal headcount.

But is tech really starting to replace us?

Daniel Newman‚ Principal Analyst of Futurum Research and CEO of Broadside Media Group hit the nail on the head in a recent article for Forbes Magazine: When it comes to digital transformation‚ humans—believe it or not—play an integral role.

In a lot of cases businesses have teams of very experienced people that have been dealing with very dated systems. Giving them tooling that allows them to get better and do things faster‚ can often have huge results. 

That being said‚ in some cases it does come down to a matter of cost reduction. When you consider impact on customer service teams‚ for example‚ or administrative support teams‚ where you might have a lot of archaic processes that are based around a platform that  operates in a specific way‚ reducing team size may be the only sensible option. 

It should be noted‚ though‚ that these staff members often have more company-wide knowledge than most others‚ as they’re in constant communication with your customer base or at the heart of a business critical process. Whilst the changing pace of an industry choice might remove their role doesn’t mean that they are any less valuable to a business.

I’d even go as far to say if you’re planning a digital transformation project purely to reduce headcount‚ you’re going about it in the wrong way in the first place. 

You should be looking at other value propositions outside of that. Is your proposed solution actually enhancing something? Can you calculate things more effectively? Is it allowing you to upsell‚ cross sell‚ or provide other revenue generating opportunities? These are all questions to ask before jumping into a partnership.

How Do You Ensure The Success of Digital Transformation Projects?

Get as much user engagement as possible- but you need to put rails on it. If you let someone go ahead and design whatever they want without context of how it all fits together‚ you end up with a poorly planned product that is difficult to integrate. 

If you allow for any input‚ and users see that their feedback hasn’t been actioned (even if it’s for a good reason)‚ you may experience issues in the adoption and further use of your product. The feedback process must be guided‚ through carefully planned interviews that are structured based on a solid understanding of what you want to get from those users‚ and what impact they can have on the project.

Considering properly structured wireframes and being judicious about which features are crucial is also a necessity for a product launch‚ and should be considered a key part of the process that is used to contextualise user needs.

You also shouldn’t overindulge in what digital transformation can do for you. That’s something that a good technology partner will do for you as part of the process. Coming to a meeting with a pre-planned solution may solve a problem‚ but it might not be the problem that needs solving.  

You don’t always have to invest in expensive new platforms. Your internal processes may actually be okay‚ and not warrant commissioning a bespoke software package. It’s a case of understanding that tech suppliers are going to advise based on their expertise and value‚ not simply selling what they can do. 

Confidence is built through using reliable partners who don’t just prescribe a solution that matches their ability. They research‚ analyse and develop a solution that truly drives organisational change.


What are the Normal Barriers for Digital Transformation Projects?

Particularly in large‚ corporate organisations‚ one of the main barriers we see is budgeting for the work to be done. In a lot of cases digital transformation is a reactive process‚ it can be difficult to approach senior stakeholders and ask for the money to run a project that requires significant change.

By the time a digital transformation project is identified‚ money has often been spent on maintaining the established  (often broken‚ or unoptimised) process. This means that any kind of change to this becomes an unplanned cost.

Another key barrier is understanding the role an external partner has alongside your internal teams. Due to the fact that the definition of digital transformation is so blurry‚ different agencies will approach businesses with proposals for different levels of involvement.

Sometimes there is also concern surrounding the internal capacity for supporting a new piece of technology in the future. Having an experienced CTO who knows the way to properly implement new solutions into the existing suite of technology platforms being used-in-house is useful in this process. It ensures that the long-term operational viability of the solution is understood.

That being said‚ a good technology provider would be able to support your product or project long into the future‚ making calculated improvements to the service it provides. A great technology provider will map out when you should become self-sufficient.

Looking for a delivery partner that will work with you to identify‚ create and launch innovative technology products whilst providing clear ROI and long-term competitive advantage? Read our case studies or get in touch today.