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DIGITAL TRANSFORMATION

posted 20 Mar 2017, 07:47 by Roelof Iball

Businesses need to rethink their approach, and thereby their operations, to encompass the digital age and have a clear strategy to transform. Or else they will become less relevant and may even cease altogether.

Companies must be able to grasp what the disruptive digital age means to their business, their industry and their customers in order to stay relevant, competitive and valuable to shareholders.


Key Domains:

Customers, Competition, Data, Innovation, Value.


1) customers are part of a network

2) competition comes from platforms more than products

3) data is a strategic asset

4) innovation is driven by small experiments and scaling

5) value is dynamic and adaptable.

Image - Courtesy, David L Rogers



Key trends for future? Jobs will be at risk especially those that can be replaced by software; but that means the human talent will be in high demand (creative, morality…) and new opportunities that we can’t even think of will become reality.

We’re moving from being driven by Products to Services to now Experiences.



Exponential technology rate - Moore's law:

We are at a point in time where the most powerful commercial computer has the equivalent ‘organic brain’ capacity as a cricket. But in approx five years it will match that of a human brain. By 2050 it is predicted that a single computer will have the capability of ALL human brains on the planet, such is the rate of technical growth. (Gerd Leonhard)


Everything is software - what part of your business can be more s/w? Software and digital technology will take many more jobs away from what humans do currently but new jobs will be created too.


Love and pain - love what your company does, but realise it will be painful to change.

Use technology for the human benefit - not machines.

Think of the current business and the next: - The energy company, Shell, has published its transformation plans to move from fossil to wholly renewable energy.


Music businesses - look at who’s the smart business now - Apple, Spotify, Youtube … have usurped EMI, Sony, Columbia… (Graph below courtesy - Gerd Leonhard)

The traditional music titans tried to hold out and over the years sued thousands of people for copying physical music formats (tape, CD) and trying to halt the accessibility from the cloud; but in the end it is the internet companies who have triumphed and it is software that has clearly emerged.




Disintermediation is becoming even more prevalent; the reduction in the use of intermediaries as business (and esp. consumers) transact more directly rather than through third parties for goods and services.


This is what we mean by Digital Transformation and as a CEO you need to grasp what impact it's going to have on your business.


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