Digital transformation, disruption, and digitization. It can seem as though anywhere you look in business, those hot-button terms are at the center of every conversation. New technology, predictive analytics, and business optimization are all the rage. But few businesses have looked beyond the tech to the real-world differences this process will make in our businesses and everyday lives.
Some years ago, I remember reading a summary of Machiavelli’s The Prince to gain a better grasp of what this Renaissance mastermind had to say about the world. One piece, in particular, stood out, that if you can’t win the game using the existing rules, change the game. As digitization and digital transformation change the way we do business and interact your business “game” – the method by which you retain success – may also be changing drastically. If you don’t change your game to keep up with transformation and disruption in your industry, you may find your business left behind. What changes can you expect from the true essence of digital transformation?
How Will the True Essence of Digital Transformation Impact Your Company?
What is it – really?
Digital transformation is the result of combining inexpensive technology, pervasive network availability, supercomputing power, cloud computing and digital security. With these five aspects in place, everyday people expect to be more connected to life through their devices, whether that involves tracking a shipment, video chatting with a customer service rep, having their preferences follow them to your website from social media or expecting that you’ll know when an appliance needs repair instead of having to determine that for themselves.
It’s really easy to get caught up in the technology, but we must remember the human factor. At the start of popular use of the internet, customer interactions were much like ordering from a catalog. You filled in a form in some fashion, then submitted your payment and sometime later, you’d receive your purchase. As time went on, receiving tracking numbers and fulfillment dates became the norm.
With the advent of the digital revolution, business models began to change. Today’s largest taxi service, Uber, owns no taxis. AirBnB doesn’t own any lodgings. Apple, Google, and Amazon don’t own the rights to any music. These new business models require existing businesses to keep up and adapt to these changes or be left behind following the industry disruption.
Where is it taking us?
Tomorrow’s business is a dynamic, agile enterprise that is able to adapt to change in the market while remaining profitable and responsive to client demands. It will be expected to predict failures in machinery, future customer behavior and increasing demands for innovation. Simply opening another online storefront or marketing to a new social media page won’t suffice, you’ll need to set yourself apart through your products, your fan base, your company culture and the difference you make in the world.
How do you get there from here? Maybe you incorporate Facebook or Google+ sign in options for your website and ordering process, allowing you to update customers about their orders through social media. You could use Google Analytics to figure out not just a good advertising campaign but the best possible one. Market research may allow you to better focus on the exact persona of your best customers, helping you focus on only the most profitable sector of your market.
Why does it matter?
There have been many changes in the market as technology has advanced, so why should you worry about this change? IDC Energy predicts that by next year, a full third of the top-20 leading market share businesses will have been disrupted by competitors with new business models. It’s expected that by the end of this year, 45% of the world’s workforce will be contingent labor, many of which prefer to work from home. Deloitte has reduced human review of accounting documents by half using machine learning. Change is here, now. Customers expect to be the center of your business and process, not a simple revenue source.
Early adopters of digital transformation are also seeing increased market shares and revenues while lowering overhead costs. NTT DOCOMO, a telecom company, is already receiving 15% of its revenues from its Smart Life Suite. Early agribusiness adopters are seeing a 9% increase in revenue creation, a 26% improvement in profitability and a 12% increase in their market valuation. The question isn’t why does it matter, it’s can you afford to not care?
How do I get there from here?
Digital transformation can be a complex process, and you need to start with a good grasp of what needs to change in your IT department to make it work. Rather than being a supplier of services, your IT resources will become integrated into every part of your company. Innovation will be driven by a stronger cooperation and cooperative development from all areas of the company. To get there, you’re going to need to change the historical role of IT from being a side department that keeps things running smoothly to facilitating an enterprise-wide approach to digital transformation.
Your IT assets must play a central role in planning where your business will be in a year, five years or a decade. You’ll need visionaries capable of seeing what’s possible today and what innovations can take your company through the next twenty years. To develop solutions that work, you need IT personnel and solutions that focus on creating superior functionality for your employees and customers by breaking down what each person is doing, why they’re doing it and how it can be improved to streamline the process. If you need dynamic solutions in Melbourne, Invotec is here to help. Please feel free to email us (link firstname.lastname@example.org) or call us at 1300 Invotec to get started.