New Wave of Digital Transformation
What is Digital Transformation
Digital transformation is the building of new technology-enabled business models and solutions, to improve business results, enhance customer engagement, to drive operational excellence.
Digitalisation is forcing a rethink of business architecture, creating new players and even changing industry structures. It is an opportunity and a threat.
Digital disruption is not alien to businesses. In previous waves of digital computing, distributed computing, internet communications and commerce, it created opportunities and risks. The present wave of digital disruption is not dissimilar in its impact – it presents new opportunities and new risks.
Digital technology is impacting the landscape of many industries, demanding a rethink of business strategies, structures, leadership focus, operational efficiencies and investment priorities. Business solutions and customer experience which once seemed fanciful are standard expectations today. Organisations from all sectors, profit-driven businesses or public services, are finding technology-enabled ways to improve their competitiveness. The outcomes may take different shapes, such as increased operational effectiveness, improved cost efficiency, enhanced omnichannel customer experience, faster time to market compressing supply chains, or even new service offerings.
The convergence of new digital technologies is making it possible to envision end-to-end digital businesses, beyond aligning technology to meet current business needs to developing new business models. Undoubtedly this is no easy feat, particularly for mid to large organisations, which require a complex mix of factors to devise and succeed.
The ingredients for successful digital transformation are many and diverse. It is more a journey than a destination, certainly not a corner office technology-driven agenda. While several key factors are explored further, suffice it to say that usage of digital technology components such as social, mobile, analytics, cloud and sensors may well be necessary, but are not sufficient conditions for successful digital transformation.
In charting the way forward, business leaders rushing with a technology-led agenda may risk capital, time and opportunity, in addition to ignoring the required business strategy, defined by needs, priorities and changing business context.
Why is it different this time?
One could argue that the falling costs of computing, communications, and storage have been a long-term trend. So what has changed the trajectory?
This wave of digital transformation is powered by the confluence of technologies, each useful, but together more powerful. The pervasive technologies of cloud delivery, smart devices, ubiquitous connectivity, social media, sensor feeds and analytics, are powering opportunities erstwhile impossible. It is only in the past few years that the convergence of these digital technologies has created never-before possibilities.
- Pervasive connectivity through mobile phone subscriptions and use of smartphones.
- Omnipresent sensing, with internet-connected devices providing massive amount of data to decipher and use.
- Digital data explosion, doubling every two years – most of it digitised with half of it linked to an IP address.
- Cloud-driven speed, where software is the new hardware, not limited by physical obsolescence or capacity.
- Analytics, machine learning and artificial intelligence are seeking out insights, grinding through noisy data sets.
Now consider Uber, the popular taxi-hailing app on your phone. It is more than that. It is a digital business innovation with physical and technology-enabled operational layers. It is a network of drivers and cars, an online marketplace connecting mobile buyers and sellers, using a dynamic transparent pricing model and a reliable payment system. It is also a trading platform, with an intuitive front-end for buyers, while squeezing out overheads for free-agent sellers, who can reach buyers at the right time and place – all supported by a feedback mechanism, a robust, always available infrastructure operation. Some years ago this was not feasible, without the digital toolbox.
This digital toolbox is making the next stage of business transformation different. This wave is being dubbed as the most significant wave of digital disruption. It is having significant implications not only for business strategy but for the structures of industries and companies.
Organisations are seeking the first-mover advantage, leveraging the growing pervasiveness of the digital toolbox, improving digital fluency within their organisation, creating value throughout the enterprise, increasing consumer-facing digital offerings, accelerating data analysis and defining new business requirements.
The plethora of possibilities and the cumulative impact of these technological advances is nothing short of a digital-fuelled business revolution.