Digital Transformation is not a recent phenomenon, but rather an ongoing technology revolution that we have experienced for more than 2-3 decades. The only difference now is that the pace of technology evolution in the field of computer processing, mobile computing, cloud adoption, IoT devices integration, Data Analytics, and Machine Learning, etc., is accelerating as predicted by Moore’s Law.
As per the data on hostingtribunal.com
- 50 billion smart devices around the world will be interacting to connect, share and analyze data
- $77.8 billion web hosting services market by 2025
- 70% of technology up-gradation budget will be diverted toward cloud adoption
- 35 million tech startups
- 4,383 million internet users across the globe
The technology acceleration is primarily toward the digitization of the various analogous manual operations. Anything which had served the customer through a physical form is now on verge of getting digitized. From Newspaper, TV, Radio, Newspaper, phone, mail, home security, retail stores, banking, taxi service, transportation, etc. – each and everything has a Digital business model to it. For a customer, who is using these digital technologies from the comfort of their living room has been the quickest to adapt to the changing digital world. Naturally, this has resulted in a huge change in behavior/expectations by the customers.
For an organization, who has been in the business for multiple decades/generations and till now has been successful in generating huge profit with the traditional analogous (non-digital) approach, is finding it difficult to adjust to the changing environment. Thus, most organizations are trying to identity – Is Digital Transformation a Threat or Opportunity.
The answer to this question is very simple and straightforward. It depends on which side an organization wants to be.
Is Digital Transformation is a Threat?
Most incumbents naturally think Digital Transformation as a Threat, because of the influx of the new tech firm disrupting the market by providing products/services using the latest digital technology. The digital disruptor us the technology power of Social, Mobile, Analytics, and Cloud to design product/services which were never imagined. Moreover, the business areas disrupted by these new tech firms are the ones that no one ever thought of disrupting. Take for example #Uber- disrupting the taxi and car rental business. The city local taxi, Yellow taxi at the airports, and big car rental companies like #Enterprise, #Hertz, etc were caught off-guard with the emergence of #Uber – in most parts of the world. The same phenomena of disruption are seen in the retails space by #Amazon, Movies/ Cinema Thearter/ TV industry by #NetFlix, Hotel industry by #AirBnB.
- #Uber market cap as 15th May 2020 is $56.B
- NetFlix market cap = $199.75B
- Airbnb – 26B (estimated)
- GrubHub – 54.97B
For a traditional incumbent, accepting that Digital Transformation is a Threat is a lost battle. Instead, the only way forward is to adapt and accept the changing business land space due to DIGITIZATION. Forgetting the history and glory which was achieved and taking steps to be competitive is the need of the hours. One can always learn lessons from the companies like #Nokia, #Blockbuster, #Kodak, #Blackberry, #Sears, #SportAuthorigyt, #ToyRUs, #Sears, #CircuitCity – these big organization accepted Digital Transformation as a Threat and in the process ceased to exist today.
Is Digital Transformation is an Opportunity?
There is no doubt, Digital Transformation is an opportunity to accelerate the growth and revenue of an organization. In today’s, landscape and economic condition more or else, it is the only option left for the traditional incumbents. Just imagine, in today’s COVID19 crises, can a local restaurant owner decide not to be part of the food-delivery chain using #GrubHub, #UberEast, #DoorDash, #Zomato, #Swiggy to name a few. Well, this very small initiative is also termed part of accepting Digital Transformation as an opportunity. As per Statista – the Quick Service restaurants franchise established from 2007-2020 is estimated to be around 199,394 and projected to reach around 280 billion.
Most consumer goods and the retail business is primarily associated with an individual like you and me. The same individual has adopted the digital environment as part of the daily routine. A single piece of smartphone is like a Wallet, Newspaper, Contact list, Entertainment device, Camera, Weather report, read email and message, and not to forget a Phone for talking and video conference.
Digital Transformation is primarily associated with developing new products/services – Banking App, eCommerce Platform/Marketplace, Food ordering service using the latest technology – including, Cloud Computing, Big Data Analytics, Mobile Application, AI, etc. In reality, every single organization cannot build new products/services as part of the Digital Transformation journey. Instead, an organization could initiate the Business Transformation aspect like HR, Finance, Legal, IT, Front-office, Marketing, Sales, Operation, etc is part of the Digital Transformation. Few examples are:
- Adopting an Office365 and MS Teams throughout the firm
- Finance team could adopt for paperless invoice processing option for AR/AP
- HR could introduce an online learning platform like #Udemy and #Pluralsight platform
- The marketing team could adopt to engage more on the Social Media platform as a primary advertisement
- A legal team could adopt the eSignature platform for contract execution
- IT Operation could plan to adopt Cloud computing platform
The above is just a small set of initiatives that could be undertaken by the management. Remember, in the Digital Transformation journey – The digital aspect is very easy to implement. The Transformation which is associated with the working environment, culture, workflow, data silos, etc are very difficult to implement with an established organization.
So, the question now is “Are there firms who are undergoing Digital Transformation current?” Accordingly to HostingTribunal.com – following is the advancement taking place in the Digital Transformation journey:
- 70% of organization have Digital Transformation strategy
- 38% of the traditional organization has adopted Business Transformation
- 39% expect a benefit from Digital Transformation in the next 3-4 years
- Executive anticipate to achieve 40% operational efficiency, 36% feel they better control on go-to-market strategy, and 35% are concentrating on customer support operations.
Conclusion
Digital Transformation is a journey where a business needs to adjust and adapt to the changing environment. As we move ahead in our journey, new technological advancement is bound to happen, and adjusting to the environment is required. This has been happening for generations. The only difference now is that the pace of the technology evolution has accelerated. What-ever was in the physical format is not getting digitized e.g. handwritten paper was replaced by typewriter than to electronic typewriter and later to MS Word document / Webpage Data entry form.
When a customer is getting NEWS update 24/7 on his Smartphone for free, why would anyone buy a paper Newspaper? This same analogy applies to all businesses.
In the end, I will just quote PWC’s Global Entertainment and Media Outlook –
”We are at the end of the digital beginning as companies reshape and retool for life in the new normal.”
These numbers speak volume in terms of the digital accelerations which is happening around us. Currently, our digital experience is limited to the 2D view of the mobile screen, computer monitor, and Smart TV set. But the acceleration in the field of Cognitive Technology (Speech Recognition, Vision, Machine Learning, Natural Language Processing, etc.) will help us to break the barrier of 2D view of a web page and phone app. We are slowing moving into the ecosystem where will start interacting with the physical object through the digital medium. IoT has already paved the way in this direction.