Over decades technologies have always been changing with new technologies evolving and companies have been using different technologies to build and develop products. Likewise enterprises are constantly improving businesses services and products using technologies on the three basic principles Cost, quality, and speed. However, with the introduction of internet, the scale and speed of usage of technology has increased and more and more information is being converted to digital format (digitalization) and the impact of digitalization has given rise to digital technologies.
Quality, cost and speed are part and parcel with growth of internet usage, however with digital technologies evolving, there is one additional factor which has become important in the new economy – Customer experience. In order to improve and grow businesses, the enterprises are changing and transforming to enhance customer experience and digital technologies has enabled changes to business models and have also enabled innovation and creativity across industries like banking, Automobile, Manufacturing, Retail, Transport and Logistics, Media and Entertainment, Health and Pharma etc.
We are at a point today where business and technology work together and we are convinced that technology is the biggest business today. The technology effect on businesses has created a wide spectrum of digital technologies. Below are few digital technologies that are already established and /or emerging technologies.
- Internet of things/M2M communication
- Big Data
- Predictive Analytics
- Social Media
- Machine Learning
- Artificial Intelligence
- 3D printing
- Virtual and Augmented reality
- Industry 4.0
- Cognitive Analytics
- Cryptocurrencies etc
Some these digital technologies impact the operations of an organization example Big data Analytics, Cloud etc, some of the technologies have impact on speed, productivity and quality for example artificial intelligence, IoT/M2M etc. However combination of these technologies along with changes to business processes impacts the growth of the company and customer experience.
Digital transformation Elements
The use of digital technologies to enhance the business model is called digital transformation and if we use of digital technologies to disrupt the business models is called digital disruption. Basically digital transformation is a confluence of new business models and new technologies. Any changes to either of the components (business or technology) will automatically require changes to the other.
Companies that can use these digital technologies better than anyone else to implement the innovative solution will succeed. Few companies have already integrated digital technologies in a seamless way. Digital technologies have enabled innovation and creativity in all domains and created digital disruptions for example Amazon, Uber etc, Starbucks is a best example which is using digital technologies and is a digital master doing tremendous things at their customer experience and Apple is the best example when we think of an innovative company. There are many other examples of digital masters across various industries.
Significance of digital transformation for any company/enterprise
Today the customer interacts to the company through multiple channels like online, mobile multiple etc. They are looking for simple and seamless ways to interact with the company and they make use information from multiple social networks such as Facebook, twitter, Instagram etc to take decisions. Social media led to a transformation in how businesses reach their customers and vice versa. For example previously a typical customer’s interface point was the point of sale and/or available marketing materials. In today’s hyper connected world, people have instant access to product information using smart phones and easily available internet.
The Internet has a major influence on Generation Y” and “Millennials” who grew up with Internet and they are using digital technologies for everything starting from communicating to shopping. The connected world is playing a major role and primary driving factor for digital transformation. There is huge amount of data getting generated and organizations have to lean on predictive analytics and other digital technologies to succeed and to be ahead of competition. Digital transformation is making enterprises change the way business is handled thus leading to business transformation as well.
Digital transformation journey
Digital transformation journey has to be designed considering the different components such as customer needs, business processes and operations. In my view below are the steps to implement digital transformation journey of any enterprise
- Leadership vision and culture change – As a first step, leadership has to create a clear transformation vision and outcome. As per studies companies which follow the top down approach have seen good results compared to bottom up approach. As per PWC report (2015) 6% of the companies have appointed a chief digital officer who focuses on organizations digital transformation. However depending on the digital maturity index of the organization and size of the organization, the role can be deliberated. Basically leadership role is essential to overcome resistance to change. A process has to be setup to change the people mind set to accept changes and the process should be aligned to the company vision. “To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of disciplines,” advised Steve Jobs.
- Invest in digital to convert vision to real action – In order to build smart and intelligent systems, enterprises will have to invest in areas such as Robotics, Automation, Electronics and Sensors, Predictive Analytics, Social, IT service management, 3D printing etc. The degree of investments will differ based on the industry, for example Auto industry will invest more on 3D printing compared to banking Industry. Organizations have to also invest in upskilling the skills of staff to understand and use the newer technologies. Digital capability of staff is the key element of the DNA of digital transformation
- Re-design Processes – The processes in an organization should be designed keeping in view the vision of the organization. During the digital transformation journey some of the redundant processes in the enterprise value chain will move out or get replaced or few process get merged. A digital journey cannot be completed without an operational excellence strategy which stabilizes the processes and transactions. This includes operational processes, governance, change management etc that have to be revisited by making changes to the organization structure and other HR/quality processes within the organization. The life cycle of service management has to be revisited and end to end IT service management implemented to enhance value to customer.
- Identify Innovative Business solution- Companies have to be responsive to constantly changing market conditions and define new business services/models to deliver better value to our customers compared to competition. In this step a business strategy has to be defined and innovative business solution has to be identified. Enterprises should select one or more business services which are important from customer point of view or which have a critical role to play in the value chain and then analyse the changes to the business model that will create a positive impact on the enterprise.
- Implementation of digital Technology – We are at inflection point in how business and technology work together and the industry boundaries are blurring and every industry is now a technology industry and technology is the biggest business today. Use of latest emerging technologies like IoT, Artificial Intelligence etc will enable to digitize, automate, increase revenue and improvise the productivity. Consequently the infrastructure elements have to be modified.
The digital transformation journey is an ongoing processes and the cycle restarts with every change made to any component (people, processes, business functions/services, technology, operations etc) across the organization ecosystem.
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