“Digital transformation” is a popular buzzword these days that can often mean many things to many people.
Simply put, it’s about using digital technology, such as the cloud, mobile and Big Data to enable organizational change. This change will allow businesses to adapt to fluctuating customer demands and competition from rivals both old and new.
In an increasingly digital world, ambitious start-ups are having a profound impact on established markets and brands by successfully exploiting this phenomenon.
Fast-growing disruptors like AirBnB and Uber have ripped up the rulebook, embracing digital technology to deliver services customers want without the need for huge capital investments. Even without owning physical assets such as hotels or cars they have still altered consumer purchasing behaviours, changing these traditional industries forever.
As more disruptors make their presence felt, established organizations must digitize—automating business processes, analytics and workflows. Otherwise they risk being left behind or, worse, put out of business.
However, a big challenge organizations face is the terabytes of information generated each week – too much for any person to read, let alone fully understand. It’s simply beyond human ability and human speed.
So how can an organization make the most of this wealth of information to drive growth and stay competitive?
By taking a digital-first approach, using analytics alongside content and process management technologies, enterprises will start to discover invaluable “digital breadcrumbs”: insights into market trends, process bottlenecks or customer satisfaction issues. These breadcrumbs can be used to affect organizational efficiencies, enhance product design or create self-regulating business processes that can save an organization time and money.
I believe that digital technology will drive a level of change for businesses, individual organizations and their workforces that has not been seen since the Industrial Revolution. Change on a truly massive scale.
We’re on the precipice of an immense transformation; automating tasks currently require human intelligence to be performed. While the specific catalyst and rate of transformation will vary across different industries, one thing is certain – over the next decade everyone will be affected.
In fact, there is already clear evidence of this. Tesla Motors is providing customers with over-the-air updates for their electric cars as easily as if they were downloading software to a smartphone. Now, owners are spared a trip to the garage while Tesla saves on the time and the expenses spent on a customer visit.
Despite examples of successful digital change, most organizations are only focused on solving discrete problems. For example, digitizing the management of supplier contracts but failing to automate or integrate these processes with their wider supply chain systems.
Only a few organizations are investing in digital-first and adopting this holistic approach to restructuring their business silos.
The key to implementing these multi-year transformational programs the right way are the senior executives. In my experience, these initiatives succeed when driven by the CEO, who ensures they align with corporate strategic goals, such as delivering shareholder value and boosting return-from-asset efficiency.
Given the central role that data and information plays in digital transformation, involving the chief data officer (CDO) also plays a critical role. It’s the CDO who is laser focused on the quality of data in an organization. How is it stored and managed? How are systems integrated? Have all regulations been complied with?
It really is a full-time job safeguarding the quality and security of information. So it’s not surprising that Gartner predicts that 90 percent of large organizations will have a CDO in place by 2019.
The problem for an organization that relies on out-dated management and analytics technology – one in no hurry to appoint a CDO – is that they continue operate at human speed. But competitors that highly value data and complete control of information, will soon have intelligent systems in place to uncover predictive trends that will allow them to outperform every day of the week.
What really counts is reduced costs and increased efficiency. When choosing between paying $10 per old manual process or $0.04 per digitized one, surely it makes sense to go for the less expensive option? If you don’t, an agile, ambitious start-up may quickly outgun you while you’re still deciding what to do.
It’s not all about going digital for digital’s sake, old-school business lessons still apply. An organization needs a carefully thought out strategy to understand where it can yield the best benefits. And it’s important to bring people along when change occurs. It is difficult for people and they can get scared about what it means for their jobs and way of life.
In the late 19th Century, people worried that steam tractors would take their jobs, and in the early 21st Century, they worry that artificial intelligence and Big Data will render them obsolete. But all those roles that disappeared with the advent of the steam tractor were replaced with new, often more innovative jobs. The same will happen when the coming digital revolution fully takes hold.
The only difference is that today we’re automating things that once could only be accomplished with the human mind. While such change will inevitably be difficult for some, I believe that we might as well accept what’s coming, embracing it rather than fighting it.
Now is the time to move beyond human speed.