top of page

Is Digital Transformation Hype or Reality? - Part 3 of 4

In the previous parts of my blog series about Digital Transformation, I put up those 4 key questions for debate, and answered the first two:

  1. Why do we need to innovate by transforming our business at all?

  2. Where (in which areas) does it make most sense to start the transformation process?

  3. Which technologies are most promising for effective transformation (low hanging fruits, quick wins with low risk)?

  4. How to implement digital business transformation?

Now it’s time to look into the technologies which are responsible for accelerating the digital transformation.

Which technologies are most promising for effective transformation?

In 2012 Gartner introduced the nexus of forces (Mobile, Social, Cloud, Big Data) as the emerging technologies enabling digital business transformation. In the meantime other technologies have become readily available, which add up to Gartner’s nexus of forces, namely: Internet of Things (IoT), Machine Learning or Artificial Intelligence (AI), Virtual & Augmented Reality (V/AR) and 3D-Printing (3D-P).

ABI Research's latest data on the Internet of Everything (IoE) shows that

"…there are more than 10 billion wirelessly connected devices in the market today; with over 30 billion devices expected by 2020"

Figure: The 8 enabling technologies (c) Roger Hage

You can use these 8 enabling technologies as a checklist for ideas when you brainstorm for innovation. Ask yourself for example how can Social networks help? Or how can I use Augmented Reality to solve a problem or increase customer experience? Or what new insights could Big Data Analytics bring and how could it predict events or behaviors to develop better offerings?

All these technologies are reality today and are feasible & viable, which implies that if business transformation is enabled by digital technology, then this wave is already here.

Giving technology adoption and digital transformation a meaning

Here I would like to repeat a question I raised in the first part: “Why react so quickly & answer the digital transformation call, instead of adopting a more relaxed wait-and-see attitude? Maybe it is only a passing fashion trend?”

Because sometimes we get so much overwhelmed by and drowned in technology complexities that we forget the Why. So I would like to come back to the WHY we should be doing this?

I remember sitting at a technology conference about 5G networks back in 2015 and everybody was talking about the need for a) higher throughput (bandwidth & data speeds), b) supporting more subscribers due to IoT bringing 30 billion new devices to be connected to the network and c) much better security as we will be putting all our eggs in one basket… Then all discussions went into the technical details of realization, standardization and implementation. I couldn’t stop myself from asking the panel discussion members the WHY question.

I was not asking why we need more bandwidth, or why we need to cater for more subscribers or to increase security, because these three questions were already answered in the conference.

I wanted to go one step up and ask the second layer of why questions. Why do we need IoT? To my knowledge IoT is a means (solution) and not a purpose (aspiration or problem)! I was asking for BENEFITS and I did not get any. The answer could have been “because then we can stay connected to our products after they are sold, or because we can use beacons and apps to enhance customer experience for example”.

Are these benefits substantiated with insights, facts or data? I doubt so.

Did anyone ever ask if customers want to have their products monitored at all times and receive quicker and better maintenance? Or if the customers want a more personalized and sophisticated experience when they enter the hotel bar, so that the barkeeper greets them by their names and knows their favorite cocktail?

We should not let ourselves be driven (pulled) by technology just for the sake of technology, but rather use technology where it creates greater value for our customers, better work environment for our employees, and better competitive advantage for our company.

We shouldn’t be slaves of new technologies and be blindly pulled by them like walking a young hyperactive dog. We should rather lead with solutions to real problems people have (even if not yet aware of) and which people are willing to pay us to solve them. We need to address the customer value equation. Any transformation should start with the People in mind: The customers (desirability and added value), the employees (corporate responsibility) and the citizens (social responsibility).

If you’re not a non-profit organization, then there is another reason you are doing the transformation: You want to secure a sustainable competitive advantage and probably if you are publically listed and controlled by shareholders, then you need to grow and maximize the shareholder value. Yes, there is a business rationale behind digital transformation, but it should not be to the detriment of your customers or employees.

"In everything we do, we should always ask the WIIFOC question: “What’s in it for our customers? “ – Roger Hage

How much added-value will this digital transformation bring not only to our business, but also to our customers?

Figure: Corprate and Customer Value Relation (c) Roger Hage

We should ask ourselves “How can a certain digital technology help…”

  • Increase P (the unit price of items sold)? > By increasing the customer value

  • Increase Q (quantity of sold products)? > By creating higher demand generation

  • Lower Cv (variable costs)? > By optimizing operational costs (automation)

  • Reduce Cf (fixed costs)? > By outsourcing or automating

  • Save Ca (costs for amortization)? > By avoiding investments (outsource, move to an OPEX cost model)

Competition is not sleeping and digital technologies are mature and viable enough to implement today. According to Cap Gemini Consulting, some industry segments have more than 30% digital masters pioneering in digital transformation.

We don’t have to wait & see, but rather act now. The question is not if or when to adopt such technologies and transform, rather which ones to implement, why and how?

Image credits Pixabay

Featured Posts
Recent Posts
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
bottom of page