Our lives today is centred around technology. Technology is so intertwined with our lives that we cannot think of a world without our gadgets. We see massive advances in technologies like Social, Mobile, Analytics and Cloud(SMAC). In recent years intelligent automation, VR/AR and IOTs are gaining momentum. The combinatorial effect of these technologies are disrupting the way of life, and new products and services are born.
This is an exciting time for consumers but a challenging one for established companies. Companies see challenges from newly-minted digital natives who are entirely disrupting their industry.
Every day we see things that used to be a physical interaction are now becoming digital. For example, we have boarding passes in our phone, instead of calling for a cab we use an app. Companies like Uber leverage advanced digital technologies and within a few years, they have decimated the entire taxicab business. Today Uber is worth more than companies like Ford.
Software is eating the world — Marc Andreessen
Companies are looking at how they can transform their industry and benefit from these technology innovations. Every CEO has digital in their agenda. We hear a lot about digital transformation, becoming digital and so on but precisely what does digital really means.
What is digital?
Wikipedia defines digital as
Digital usually refers to something using digits, particularly binary digits.
In the context of digital transformation, we are talking about how a business can become digital. The digital transformation of a company is about digitizing all aspects of the business including the product or service and business operations.
An excellent quote by Mark P. McDonald on digital transformation
Digital is the application of information and technology to raise human performance. Human performance creates the type of value that leads to revenue.
Digital transformation is not just about the technologies it is about the abilities and experiences those technologies create.
How digital is different from traditional IT
One of the question technology practitioners have is what is different now, we have been deploying software technology solutions for the past 50+ years.
IT was more focused on digitizing the back and front office functions as-is but whereas digital business is all about powering the business by technology. Digital is about reinventing the product/service and operations by leveraging the latest technologies.
For example, implementing a Point of Sale(POS) at a bookstore is more of automating as-is current operations, but digital might look like selling books online, digital books, book subscriptions and so on.
How big is this transformation
Business, as usual, is not an option anymore. Companies urgently need to rise to the challenge of digital disruption by becoming disruptors themselves. This transformation is akin to how the complete Industry moved from steam-powered to electricity powered in the early 20th century.
Digital is the main reason just over half of the companies on the Fortune 500 have disappeared since the year 2000.
-Pierre Nanterme, CEO of Accenture
Becoming Digital
When it comes to digital transformation, companies need to go back to the drawing board and ask what is the expected outcome and how technology can be applied to achieve it.
For example, a farmer wants to increase the yield on his farm; one possible solution could be is to use to IoT sensors to predict moisture, soil conditions, rain and other data to predict the optimal care and ultimately increasing the yield.
Another example, an optical store today expects people to walk-in and try different glasses. Using a combination of AR and 3D technologies the user can get a better experience and get a product that is highly personalized for them.
Companies will need to find ways to move from mass-production to mass-customization. Companies will shift from more product focused to service and outcome focused.
For companies, digital transformation is going to be a journey, whether they will disrupt or get disrupted will depend on how fast they embrace digital technologies and agility within their organization.
