Digital Transformation, Part 3: The Building Blocks
“Information technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without talking about the other” – Bill Gates.
This quote perfectly encapsulates the notion that technology and business can no longer be seen as two separate branches within every enterprise. So it’s hard to imagine that the quote is from 1999!
Now, more than ever, businesses need to have digital transformation in mind. However, digital transformation cannot be fueled only from IT – all lines of business and operational processes need to be aligned. For example, marketing can benefit greatly from social and data analytics with a deeper understanding of the consumer’s wants. Armed with technology, businesses can take advantage of predictive marketing and provide enhanced customer service for an integrated experience.
As mentioned in Part 1 – Rapid state of change (see here) – we see four key building blocks of digital transformation that, taken together, can drive enterprises’ shift to the new way of business: cloud, mobile, data, and networks.
Let’s dive deeper: Series on #DigitalTransformation (3) – The building blocks
The cloud is far more than a deployment model. Ultimately, it means freedom, efficiency and integration. With the cloud, businesses can focus on their core missions with better collaboration and always up-to-date solutions. It’s scalable, flexible, and accessible.
A collaboration study from 2012 by Knowledge@Wharton and SAP found that 85% of businesses believe that cloud computing will transform their business and/or industry, but 48% of those surveyed have minimal or no adoption of the cloud. Even in 2012, the cloud was recognized as a critical element for digital transformation; we can only imagine the numbers have grown since. But even though most businesses realize that cloud adoption is imperative, fewer have actually made the crucial move to cloud adoption.
Need more proof? Look at the increasing role of LOB in IT investments. IDC predicts that, “By 2016, 80% of new IT investments will directly involve LOB executives, with LOBs the lead decision makers in half or more of those investments.”
Interestingly, cloud adoption rates are higher for businesses in developing countries, since they have fewer legacy systems in place and thus have no processes to disrupt. For them, integration or shifting to new systems is not necessary. Although businesses in developed countries may be on top now, they must avoid the trap of simply “getting by” with legacy systems to protect their existing business. Adopting the cloud, even as an extension to a working solution, is essential to do so. Ripping and replacing something that still works doesn’t entirely make sense, but transformation is best and fastest if you lead with the cloud.
Finally, the cloud delivers an innovation platform that connects different ends of the world. Transforming a business and adopting an “as a service” delivery model often requires new ways to deliver, manage, and monitor. With the cloud, this is possible.
Mobile enhances and is inextricably related to the digital transformation. It takes freedom and connectedness further by allowing for greater access. Rather than having to haul your computer around, you can now achieve the same functionality with a tablet or smartphone. Its role is growing, with an astounding 50 billion connected devices predicted for 2020.
Currently, mobile applications are being adopted most quickly in large companies ($20+ billion) and manufacturing firms for functions like travel booking and expense. Smaller companies ($100 – $999 million) focus on key areas to support their business, for example, expanding mobile recruitment and HR functions. (SAP)
We can find examples of mobile usage in every industry. In the retail world, employees can use tablets to show off products and check out customer purchases. Customers now get to skip the line and make their purchases faster. Doctors, like those working at the Charité University Hospital in Berlin, also benefit greatly from mobile devices. Not only is using a tablet more convenient, but doctors can also now interact with patients in a less obtrusive way. Gone are the days where they have to fuss with potentially outdated papers – they can now have instant, up-to-date patient information at their fingertips. Everything is in one place, ready to go.
Using the right data in the right context means smarter decisions, new opportunities, and ultimately, a big competitive advantage. Big data is really BIG, with over 2.5 quintillion bytes of data being produced daily – but only a fraction of this really used. The rest serves little to no function as “dark data.” Of course, this number will continue to grow, especially with the Internet of Things bringing in data from sensors and wearables. Systems will be smarter, with airplanes, for example, communicating when their parts will need fixing, then self-scheduling fixing during downtime.