Liz Nerad l Palladium - Dec 06 2022
What is Digital Transformation, Anyway?

Liz Nerad, Palladium Director of Digital Solutions

“We’ve gone digital!” If you’ve heard it once, you’ve heard it a hundred times before. Our lives and global economies have made the shift towards digital, but what exactly does it mean and are we ready for a digital transformation?

There isn’t a clear definition. The digital transformation is a new way of doing business and seeing the world. But when you view that definition through a global context, it means thinking about how digital aligns with and enables a country’s economic and social goals, rather than simply an organisation or business.

The ‘secret sauce’ for me and my team comes down to ensuring that any framework or guidance for a broad digital transformation includes political will, collaboration, and behaviour change. Digital transformation is everyone’s job. It’s a new way of doing things, and that may sound over simplified but it’s true.

If you think of any project that, for example, Palladium, is working on, many of the ways to improve it are through technology. And that mindset applies to just about everything across global economies, but planning those improvements out is an enormous task and will require a balancing act between the technologies and the right policies, guardrails, and capacities to support sustainable change that benefits societies. Ultimately digital transformation will require small, incremental steps that contribute to the bigger picture. But you can’t wait till a full plan is in place to start using technology, otherwise you’ll be waiting forever.

For example, in Ethiopia, there’s a major focus on digital identification and getting at least 70 million people access to digital IDs, which would then enable them to access financial services, health services, education services, and more through digital means.

It’s a cascading effect, but it’s enabled by government.

There are plenty of frameworks out there for digital transformation, be it for businesses, economies, or at the national level, but no matter what, they all seem to be missing the importance of political will. It may be everyone’s job, but we need to support governments to lay the groundwork in this transformation, both with the technology but also in initiating the behaviour change with citizens, and that requires political will.

"Now all of the country’s services are delivered digitally and 99% of the population is online."

Government must steward the provision of basic elements, from connectivity, digital literacy, digital identification systems, and digital payment systems, supported by the right cybersecurity and data protection regulations and digital workforce capacity. This will start to build the enabling environment where simultaneously, other stakeholders link-in with new business models and ways of working that create social and economic value.

Estonia, for example, is a unique, but a shining success story of a country that’s undergone digital transformation. Key to Estonia’s success is that it became a priority starting at the highest level of government. Then, the country began incrementally, yet deliberately digitalising foundational citizen services starting with banking, taxes and even parking. This eventually led to the development of their X-Road, a blueprint and platform for national data exchange that ultimately allowed for data across sectors including the private to be integrated and work together.

They put the basic elements into place and gave both the private and public sector the keys to access it and build on to it. Now all of the country’s services are delivered digitally and 99% of the population is online.

But digital transformation will not work if everyone isn’t actively involved, making inclusivity another critical aspect in this ecosystem. In order to do this, we need to close the digital divide and avoid leaving people behind; we need to make sure we have an inclusive lens on everything we do. This also opens up opportunities for new businesses that think outside the box, and that are focused on ensuring good service design and inclusion in order to bring people into the fold that may have otherwise been excluded.

Ultimately, global digital transformation is already underway, but we still need deliberate and coordinated efforts to ensure we do it in a way that accelerates positive impact and inclusion. This means putting countries and their citizens, regardless of their education level, socioeconomic status, or location, at the centre of efforts, and then aligning interests of development partners and the private sector.

For more, watch the webinar 'What is Digital Transformation Anyway' from TechChange's Frontiers of Digital Development Forum or read 'The Future of Development is Tied to the Digital Sector'. Contact for more information.