What is Digital Transformation?
- Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers.
- It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.
Market forces that drive digitalization
- Emergence of Ecosystems: New ecosystems accessible through digital channels reduce switching costs
- Reduced Ownership of Assets & Infrastructure: Growth of data is accelerating, and is forcing issues around ownership, privacy, security, transparency, and trust
- Reduced Barriers to Digital Entry: Low barriers to digital entry blur industry lines
- Decoupled Value Chains: Increased speed, velocity, transparency and access disaggregate value chains
- New Entrants: Businesses are reaching farther and disaggregating business offerings invading new spaces
- The Internet of me: Through the personalization of apps and services, the third wave of the Internet is placing users at the center of every digital experience.
- Outcome economy: As sensors and connectivity become ubiquitous in a growing number of environments, enterprises have an increasing ability to measure the outcomes of the services they deliver. Business models that sell results appeal to customers far more than those that just sell products.
- The Platform (r)evolution: Rapid advances in cloud and mobile connectivity are dismantling the technological barriers and reducing the costs associated with establishing global platforms. These platforms offer huge potential for innovation and the delivery of next-generation services. In fact, as research by the MIT Sloan School of Management shows, 14 out of the top 30 brands by market capitalization in 2013 were platform-oriented companies.
- The intelligent enterprise: Advances in data science, cognitive technology and processing power have combined to open up the possibility of ‘intelligent enterprises’, built around smart machines and software intelligence. By turning big data into smart data, firms can achieve higher levels of operational efficiency and innovation.
- Workforce reimagined: The digital economy is creating ever-greater demand for machines and humans to work together effectively. Advances in wearable devices, natural interfaces and smart machines are opening up newopportunities to empower human talent through technology.
Digital Technologies
- Big Data
- Shift to the Cloud
- 3D Printing
- Virtual Reality
- Internet of Things
- Cyber Security
- Artificial Intelligence
- Blockchain
Digital Capabilities
- Sense and interpret disruption: Look beyond your own industry. Be prepared to blur the lines between the physical and digital worlds.
- Experiment to develop and launch ideas faster: Stop innovating and look to solve customer problems instead.
- Develop platforms for fast and cheap experiments: Find or fund one venture that could most disrupt you.
- Understand and leverage data: Organize data hackathons. Think beyond big data to consider different types of data. Find new ways to monetize data. Create an analytics team.
- Build and maintain a high-quotient digital team: Be honest about how digitally savvy you and your workforce are. Create digital boot camps to reskill employees.
- Partner and invest for all noncore activities: One of the characteristics of effective digital leaders is their intuitive understanding that the journey is not one to be undertaken alone.
- Organize for speed: Ensure CEO support and the presence of a dedicated central team to drive the new digital growth supported by a team of digitally savvy executers.
- Design a delightful user experience: User experience drives IT architectures, and not vice versa.
Rise of the unicorns
- The democratization of technology (driven by its plummeting cost), increased access to funds and a rising entrepreneurial culture means that there are now hundreds of startups attacking traditional markets. Uber, Twitch, Tesla, Hired, Clinkle, Beyond Verbal, Vayable, GitHub, WhatsApp, Airbnb, Matternet, Snapchat, Homejoy, Waze and the list goes on. These startups are achieving scale far quicker than analog companies ever did.
- Whereas the average Fortune 500 company took 20 years to reach a market capitalization of $1 billion, Google managed it in eight years, and the likes of Uber, Snapchat and Xiaomi in three years or less.
Digital Maturity Model (DMM)
The DMM evaluates digital capability across 5 clearly defined business dimensions to create a holistic view of digital maturity across the organisation
- Customer: Providing an experience where customers view the organization as their digital partner using their preferred channels of interaction to control their connected future on and offline
- Strategy: Focuses on how the business transforms or operates to increase its competitive advantage through digital initiatives; it is embedded within the overall business strategy
- Technology: Underpins the success of digital strategy by helping to create, process, store, secure and exchange data to meet the needs of customers at low cost and low overheads
- Operations: Executing and evolving processes and tasks by utilizing digital technologies to drive strategic management and enhance business efficiency and effectiveness
- Organisation & Culture: Defining and developing an organizational culture with governance and talent processes to support progress along the digital maturity curve, and the flexibly to achieve growth and innovation objectives
Sources
- Enterpriserpoject: https://enterprisersproject.com/what-is-digital-transformation
- Deloitte: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Technol…
- World Economic Forum: http://reports.weforum.org/digital-transformation/wp-content/blogs.dir/…
