Digital Transformation Series – What, Why, and How to be a Digital Enterprise

As transformation consultant, I see one bandwagon that every business big and small wants to embark is the “Digital Transformation”. As I see a lot of misunderstanding about the digital transformation (“it’s internet right? ““It means go paperless, isn’t it?”) , I am hereby taking an effort to share a series of posts starting with this one on some basic history and how you can steer your organization to be more digital over time. The key aspects we will touch upon will be as follows

  • Digital Transformation and Disruption
  • Design Thinking
  • Agile Business Transformation
  • Digital Leadership

What is Digital Transformation anyway??

Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation. It transcends traditional roles like sales, marketing, and customer service. Instead, digital transformation begins and ends with how you think about, and engage with, customers.

Digital disruption is causing a paradigm shift in the way things are done in business today, and even in society in general. New developments in technology have created new avenues for business to remain relevant, capture new market share, and expand its footprint.

Gartner defines digital disruption as “an effect that changes the fundamental expectations and behaviors in a culture, market, industry or process that is caused by, or expressed through, digital capabilities, channels or assets.”

Important elements of digital Disruption

There are four elements of digital disruptions: Business, technology, industry and society.

Amazon Web Services (AWS) disrupted the on-site server industry via its IaaS/PaaS cloud platform. The company invested heavily in infrastructure as a business model, and focused on innovation in the tech stack. They created the “nearest thing to a religious movement in IT” as a societal impact. The societal impacts for other disruptors include now-familiar habits such as binge watching (Netflix) and the phrase “Google it” (Google).

A key aspect of seeing digital disruption is to learn to separate actual digital disruptions from fads. A fad, such as Pokémon Go or Google Glass, will incite lots of excitement but have limited impact. A disruption will completely redefine the market’s needs and potentially cause a significant change in the industry and beyond. For example, tablet computers like the iPad caused changes in application development, impacted revenue of desktop and notebook computer manufacturers, and even changed how humans interact with technology.

Strategic components of Digital Disruption

Customer-centricity -It is crucial that businesses build business and technical capabilities that are woven around customer engagement as this will increase adoption, experience and advocacy.

Business process optimization – Businesses can increase operational efficiency and effectiveness by integrating and automating business processes across products, channels and operations.  Business process optimization goes hand-in-hand with customer-centricity – they are two sides of the same coin.

Actionable insight -The aggregation of information for actionable insight helps to achieve personalized and deeper relationship with the customer. When data is used on its own without orchestrating it with the process, the result will be disappointing as insights fail to be turned into action. For example, reactive insurers will predict a catastrophe through “Big Data” (Climatic Info) combined with location and risk data for pricing and underwriting.  On the other hand, proactive insurers move one step further to estimate the loss and get ready for the claims servicing. In this example, insurers with a strong focus on actionable insight strive for preventable claims by continuously monitoring the weather conditions and engaging with customers.

Innovation culture – It is critical to have executive commitment and buy in supporting innovation and agility.  This must be backed up with a business case-driven approach in order to realize measurable benefits.  In today’s digital world new technologies emerge and become obsolete as fast as daily.  To be successful, a Darwinian approach of ‘survival of those adaptable to change’ is necessary which promotes a culture of change and innovation but understands that a degree of failure is not a bad thing as it teaches us important lessons. A ‘Test-and-Learn’ methodology rather than building at once is often more effective as it mitigates the risk of failure but promotes innovation.

Information security -Information security -Proactive Enterprise Risk Management that demonstrates an unrelenting commitment to information security and privacy reduces the cost of compliance and builds trust with the customers.  Recent financial and personal information breaches has resulted in billions of dollars of losses to the Financial Industry.  These incidents have increased customer aversion to share personal data digitally. The interchange of data through the ‘Internet of Things’ makes personal data security and privacy much more vulnerable.  This puts pressure on the cost of information management and can slow down the implementation of successful digital strategies. Therefore, it is critical to have a clear Enterprise Risk Management strategy and implementation plan which delivers the highest security standards.

Industry sectors that are having high potential for Digital Disruption

Per Forbes’ , the sectors that are likely to have the highest potential are financial and legal Services, healthcare diagnostics, education, data protection, customer service, insurance, automotive industry, security and “Paper Pushers – all industries with heavy paper pushing or phone call-based processes, such as real estate or roadside assistance.”

What is a Digital Platform and some common examples?

It is a technology-enabled business model that facilitates exchanges between multiple groups – for example end users and producers – who don’t necessarily know each other while offering a value that is proportional to the size of the community. There are network effects. A Digital Platform is worth nothing without its community. t is a trust enabler: it must generate trust with clear general terms and conditions regarding the intellectual property and data ownership. It also helps consumers and providers to trust each other within the network thanks to scoring mechanisms. It has open connectivity: it shares data with 3rd party developers to create new services and extend the ecosystem. This is done with APIs and participates to the API economy. It can scale massively to address millions of consumers without performance degradation.

Popular examples of digital platforms –

  • Social platforms: Facebook, Twitter, Instagram, LinkedIn – “advertising” business model.
  • Knowlegde platforms aka forums such as StackOverflow – “advertising” business model.
  • Application stores: Apple/Google Play – “digital good” business model.
  • Market places: Amazon market place, shopping engines: “ecommerce” business model.
  • Media platforms: Spotify, Deezer – “subscription” business model.

Now that we have touched upon the digital transformation and disruption and their relevance , next article we will learn about design thinking and it’s application to digital transformation via customer centric approaches.

If you like this so far and wish to learn more reach out to us and we will give you a context driven solution to transform your business to a state-of-the-art digital enterprise.

About the Author: Ram Kollengode is an agile coach and digital transformational consultant with more than 30 years of experience across a variety of sectors like Banking, Insurance, Telcom etc. Ram is passionate about agile mindset and enjoys time mentoring and training on embracing agility.


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