By Nicola Shaver.
Digital transformation has become a buzzword with such broad meaning that it’s hard to distill what it actually means or how to go about achieving it.
For all the writing that has been produced on the topic, there is still confusion about what it means to undertake digital transformation. Is it something you can do by implementing a new system? Does it require a full business-wide platform solution linking multiple systems and workflows? Or is it about business model and culture change? For those whose mandate includes digital transformation, whether in law firm management, corporate legal or innovation leadership, it has therefore become difficult to know where to start. Approaching it as an enterprise-wide shift is overwhelming, but until recently very little practical guidance has existed in the market to help professionals determine how to take smaller, meaningful steps towards digital transformation, and which technologies are available that can help move the dial.
Definitions of Digital Transformation
IBM, among others, has defined digital transformation as taking a digital-first approach to all aspects of a business, using AI, automation, hybrid cloud and other digital technologies to leverage data, drive intelligent workflows and produce better, data-driven decision-making. Oracle defines it as the conversion of manual and analog processes to digital ones in every part of a business.
Gartner provides a definition of digital transformation that is variable, suggesting that it can mean IT modernization or digital optimization, or the invention of new digital business models.
Recently, Benjamin Mueller wrote in the Harvard Business Review that digital transformation should be defined as full business model change (see How to Map out Your Digital Transformation, HBR, April 27, 2022).
Rather than look at digital transformation as a technology-first initiative, Mueller writes, it should be regarded as business model innovation, driven by changes in process as well as products. Only by viewing digital transformation in this way can it make a meaningful and lasting impact on the business.
The challenge inherent in all of these definitions is that they assume that the professionals tasked with promoting digital transformation within their organizations have the necessary control or authority, and the resources required, to undertake enterprise-wide change. While it may be true that digital transformation – once complete – impacts a business as a whole, defining it in this way at the start of the process is stultifying, making it appear that any smaller changes can’t constitute transformation because their individual impact is too insignificant. The impact of many such smaller changes together, however, may well add up to organization-wide transformation over time.
Don’t Boil the Ocean – All at Once
If you are someone whose role within an organization involves digital transformation, and you do not have the authority to initiate an enterprise-wide initiative, then approaching digital transformation as something that can only happen all at once to the whole business is unhelpful. Many corporate counsel and legal operations professionals are in this position, as are those within law firms whose ambit involves innovation or technology procurement.
Most people working in business or law have heard the phrase “don’t boil the ocean”, suggesting that rather than tackle a large project all at once you should break it down and approach it in manageable steps. The opposite argument has also been made, for example by David Benjamin and David Komlos who write that for certain highly complex projects, you must have a broad scope and understanding in order to be able to make the right kind of progress (It’s Time to Retire the phrase “Don’t Boil the Ocean”, Forbes.com, 11 November, 2019). Without understanding how different parts of a project might impact other aspects, they argue, you risk moving forwards without all of the information you need. This may lead to situations where a smaller initiative undertaken in one pocket of the business ultimately thwarts progress in a different part of the business because the connection between them was not taken into account at the outset. Benjamin and Komlos assert that you therefore can’t make progress on discrete parts of a project in isolation – or at least not until the bigger picture is first understood.
In spite of your perceived lack of authority on the business as a whole, there is value before undertaking any digital transformation initiative in undertaking thorough discovery exercises to understand the way that relevant departments operate, and to start to build support and momentum towards a broader initiative. Understanding what systems are in place and where they are being used in other parts of the business, for example, will ensure that you don’t replicate efforts or duplicate technology investments in your own department. Understanding how data and information travel between systems (or where those connections are lacking but necessary), will give you better insights into what initiatives your team could undertake that might have impact beyond your own department.
By engaging in these discussions, you will also build support amongst a network of stakeholders that might enable you to amplify your influence in the organization and generate additional inter-departmental resources to support your projects.
One Bite at a Time
How do you eat an elephant? One bite at a time.
While undertaking discovery and understanding the systems and data landscape of your organization is important before undertaking efforts around digital transformation, this doesn’t mean that those efforts must be similarly broad.
Instead, consider what parts of the organization you and your team are able to directly impact, and what the most important needs are in that area. Instead of buying a fancy technology system because it is high in the hype cycle and promises to achieve digital transformation (examples include Contract Lifecycle Management systems and AI systems for contract review), look at the business needs that are of highest strategic priority to the organization. In particular, look for:
Processes that are manual, unnecessarily onerous, and causing frustration.
Areas where there are “too many cooks”, in other words there are so many hand-offs within the same process as to make it needlessly complicated.
Processes around which there is confusion, or where efforts are being duplicated.
Areas where work-arounds have been developed because there is no system in place to support a necessary process.
Areas where it would save time and improve decision-making if data was connected, but system integrations are unavailable or haven’t been built.
Areas of low efficiency or realization, or pockets of unprofitability.
Parts of the organization from which repeated complaints are made to leadership, or where an unusually high number of calls are made to IT support or the organization’s help desk.
In identifying the right project to take on, consider whether:
You have the ability to instigate and drive an initiative of this kind;
The initiative is linked to the strategic goals of the business and your department;
The project is high value and will provide a meaningful return on investment; and
You have the resources (both financial and human) to tackle this project now.
Your aim is to identify the right initiative through which you can drive digital transformation from your position within the organization and in light of the broader context of the organization. Only once you have selected this initiative should you consider whether new technology is necessary at all, and if it is, what work must be done before selecting the relevant technology in order to ensure that the organization is ready to onboard that technology.
Finding the Right Resources
The difficulties inherent in driving cultural and business model change across an organization in support of digital transformation are rife and complex, even before it comes to selecting the right technology system. There is now a platform that can help those mandated with these initiatives understand how to go about driving that change, while also providing guidance around technology selection.
Legaltech Hub is a resource platform that was launched as a directory of legal technology solutions in October 2020. Since then, it has been re-launched to include directories of consultants who operate in legal innovation and digital transformation, as well as ALSPs. In its new iteration, Legaltech Hub includes an entire category for Legal Operations, making it easy for corporate counsel as well as law firms to identify systems that are relevant to their environments.
In the summer of 2022, Legaltech Hub will launch a premium offering that includes high quality resources to support digital transformation efforts across commercial legal organizations. Not only will users be able to search for the technology that is relevant to their internal change efforts, they will also have access to practical guides providing how-tos and best practices for identifying use cases, procuring and implementing technology, and driving adoption of that technology.
It is now widely accepted that digital organizations are more profitable and more successful than organizations where most work is still performed manually. This undoubtedly applies equally to law firms as to other businesses. Legal professionals are well positioned to drive change and improve the performance of their organizations, but this is only feasible if we move away from using daunting buzzwords and instead begin to speak about transformation in helpful, practical terms.
Make sure you download the next edition of Legal Business World Magazine for our follow-on article on digital transformation in legal practice.
About the Author
Nicola Shaver is the CEO and Co-Founder of Legaltech Hub, a resource combining a comprehensive directory of legal technology with legaltech jobs listings and high value content aimed at enhancing transparency in the procurement of legal technology. Prior to her work with Legaltech Hub, Nicola was the Managing Director of Innovation and Knowledge at Paul Hastings. She has 20 years of global experience in the legal industry, many of which have been spent driving positive change in legal service delivery.
Nicola is an advisor to law firms, corporate legal departments, and legal technology vendors, a regular speaker at conferences around the world, and a frequent writer on topics such as digital transformation, legal innovation, change management and adoption.