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An unprecedented convergence of technology and trends is changing the world, ushering in a digital transformation.

First, we’re faced with a shrinking planet. By around 2100, we will have about 10 billion people. At the same time, we will be confronted with increasingly scarce resources such as water, oil, and more. We will need to address this and resolve other environmental issues in order to even have a future.

Second, we are also dealing with an exceptional evolution of the human population over this extraordinary period. A significant proportion of us grew up without a computer. Today, people are digital natives, growing up with smart devices and laptops. The distinct nature of our respective development has significant implications on how we interact with people as well as devices.

Take attention span, for example. The average Millennial’s attention span is less than two minutes, which means they are already anticipating a distraction when they start on an activity. That naturally has a knock-on effect on how we will be working in the future. As customers, digital natives are also demanding because they are used to products that are designed for them as individuals; it naturally becomes an expectation.

Third, products have become smart. Today we can put microchips on almost everything. This includes not only cars and homes, but also small devices. I recently read about drinking glasses with smart microchips that can tell you not only what you are drinking but also how much you have drunk — for example, the glass tells you after your second glass of beer that you shouldn’t be driving. Smart products are increasingly integrated into a part of our daily lives. In no time, we will have products that communicate not only with us but among themselves.

Hyperconnectivity: Impacting how we move into the future

With everything being connected, we will be collecting a great amount of data. According to a report from Cisco, this phenomena, also known as the Internet of Things (IoT), will generate a staggering 400 zettabytes (ZB) of data per year by 2018. (One zettabyte has 21 zeros, so one can only imagine the sheer amount of data we’ll collect.)

The implications are enormous. For now we have something in our hands that allows us to transform the way we’ve done things in the past and move into the future. That sheer volume of data — along with the insight it affords — will give rise to a “me” economy, in which we can have a much better understanding what our customers want, what their desires are, and how we can respond to them. If we’re smart, we will also use that understanding to transform our business processes and to some extent, our business models.

The digital transformation begins with the customer

The fact is that 78% of business leaders see the digital transformation as being core to what they need to do over the next two years. A full 93% of the employees of these companies also believe that we must start now. But even as we want to go all out toward this objective, we must also understand what we need to do.

From my point of view, the digital transformation always starts with the customer. We must change the way we service our customers so that ultimately what they gain from us is an experience of using our products rather than merely purchasing products. If we can achieve that, we would have a very different interaction with our customers.

At the same time, we must look into our own value chains and reflect on how we develop, produce, supply, and service products. We should also look into our workforce to make sure that we hire, develop, and retain talent in a very different way than we have in the past.

A “customer-first” success story

Let me share one example from India: Asian Paints, a company that produces and sells paint to the Home Depots of the world, which then sells it to end-customers. Today, Asian Paints has completely revamped its business model and has a big presence on the Internet. It offers a portal where you, as an end customer, can model your room trying out different color palettes to make better decisions. If you need help, you can also request that through the portal. Once you have decided on a color, you can even order a painting service to come – allowing you to make over your home without the work of the home painting process. This example illustrates a transformation from selling products to providing an experience for a customer. And that’s the key point to keep in mind.

The digital transformation required inside: Preparing for “batch size of one”

To respond to your customers’ needs, it’s critical to prepare for a “batch size of one.”

To create and produce customized products, you must revisit your production processes and product development processes. Consider how your products become smart: What would you like to learn about how customers use your products to ensure that you capture the most relevant insights? Which aspects of your customers’ behavior do you want to track and find out more about?

Embarking on the journey

Business transformation requires a complete rethinking of what you do. That is not easy, and a proven methodology can mitigate risks and impact outcomes significantly. Be sure that the methodology can help you make digital transformation decisions that drives the vision, benchmarks your different business processes, prioritizes potential innovations in terms of feasibility and value generation, and subsequently develops a roadmap for your transformation.

It is important to understand that transformation is not achieved in a day. Start small and fast, and then advance step-by-step will help you succeed.

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