Not too long ago, we were talking about disruptive innovation. As more and more businesses began their journey in innovation aided by technology, this has now become the trend, with many businesses now embracing digital transformation. From a select few this has increased to a flood and now it has become the dominant trend. What is digital transformation?
Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing the way you operate and deliver value to customers. So, this is not a case of technology supporting and enhancing traditional business practices but transforming them totally.
The underlying transformation is that of automation, but digital transformation adds on the dimension of digital with data and analytics, and the possibilities become limitless. Together with machine learning and multifuction sensors transmitting various data about devices, machinery and the environment, enter the age of artificial intelligence and the Internet of Things, where almost everything can be interconnected and automated.
It is almost essential for all businesses, from the small businesses to large corporations to embrace digital transformation. For not to do so is to be left behind. It’s not about disruption, it’s the new norm.
Transformation has its benefits. For transformation enable the automation of processes to be transformed by innovation and creativity. This creates new business models and new opportunities for business. This has been the experiences of many who found in transformation newer and more efficient ways of providing value to their existing and new clients.
But implementing technology is not without its cost. Tim Keary writing in the online newspaper, Information Age8, asserted that 84% of companies embarking on digital transformation and gave several reasons for it. He explained that decision makers did not quite fully comprehend that transformation involves cloud services, artificial intelligence, big data and the Internet of Things and how they mesh with the organizational structure and processes.
In Singapore, where infrastructure support is excellent, with the government providing guidance and support to the hilt, up to 1 in 4 businesses still lost up to $800,000 in failed digital projects.9 Most business leaders admitted ignorance of digital skills with digital projects assigned to the CIO to take charge. And because of the silo mentality of most, other colleagues turned defensive and guard their own turf jealously, leading to failure.
Note that digital transformation is really a change process with specified outcomes to achieve organizational outcomes. When seen through this lens, you can understand the above failure rates.
A change process requires leadership and advocates at all levels. With good collaboration and communication, buy-in by all involved has to be achieved to a significant degree to overcome resistance as well as to encourage and persuade. Early wins and achievements have to be celebrated and the top leadership has to monitor the pulse and the progress of various project initiatives.
The leadership of a business has to take charge in a digital transformation initiative. It is too important to leave it to the CIO to lead although it involves technology. If the CIO plays the lead, a silo mentality sets in and different departments become defensive and they start to defend their own turf, which is a sure indicator of the initiative eventually failing.
The digital transformation initiative has to be aligned with the firm’s long term strategy. Hence before even a firm started out on the transformation journey, the strategic intent has to be clear, objectives ought to be clearly defined and choices to be made between options available. That’s why the initiative has to be led and driven by the entire leadership team. Early wins has to be identified and when achieved has to be celebrated so that these will give the organization motivation and enthusiasm `for the change process.
So digital transformation is not about the technology, it is about the survival of the organization10. The technology is incidental purely because that’s the next frontier. The survival of the organization is the key to digital transformation and the members who are a part of the organization are what matters. When this priority is recognized, you will understand the involvement of only the CIO is not enough and is in fact inadequate. The leadership team has to take charge with all members of the organization on board.
This transformation has affected many sectors. While factory automation easily comes to mind, if you have sat in a driverless train on Singapore’s MRT or at airports, and the now touted driverless cars, automative and transportation easily comes to mind, and of course aerospace and defence is the focus of much digitalization activities. Healthcare and consumer electronics are also important sectors for transformation.
If you own a smartphone and if you are cognizant of the US-China tradewar, you will be aware of the impending rollout of 5G. While the news has been about the speed of 5G, 5G will make possible many advances in wide diverse fields which will require a whole article to recount.
In Singapore, and other world cities, the speed of computing has made possible instant crime reporting, smart streetlights, and sensors that measure things like air quality, parking spaces and garbage collection. These data are used for public safety, health and sustainability. 5G will certainly drive digitalization and transformation.
And because of the huge amount of data, it is no longer cloud computing, but edge computing. Edge computing is data analysis at the “edge” of the network closer to where the data is generated by Internet of Things (IoT) devices for immediate application.
If you own an Amazon’s Alexa or Google Home or use your smartphone with apps to control devices and appliances in your home, you would have an idea what the coming smart home is going to be like. While these 2 devices are voice activated, the future smart home can be activated by a whole range of sensors linked to the internet and wifi.
For example, if you are on your way home, sensors can detect where you are and when you are sufficiently near, appliances such as lights, television or whatever you need would be turned on. Or suppose you are in the living room listening to your music system, and you walk to your kitchen or bedroom, sensors will detect your motion and music will follow you by activating speakers in the kitchen or bedroom without you needing to do anything.
With such convenience, of course, you would lose your privacy. That would be the tradeoff you would be expected to tolerate for the convenience you would enjoy.
What would be the implications for the modern day entrepreneur?
If you have an existing business already, you should get started in your business’ digital transformation. In Singapore, you would be eligible for governmental assistance, as long as you qualify.
If you have not started yet, you are in a position to pursue an innovation strategy. With no business, you would have no emotional baggage to contend with. With current digitalisation trends, almost every industry is ripe for disruption.
To come up with truly innovative solutions, use design thinking techniques to generate ideas for transforming existing business models. As you work, you will probably find that you are not alone seeking for ways to innovate existing and even completely new innovations.
So you got a passion? And you like to see it in action? Know what you stand for and what you want to do with your passion. Innovate your way to a success by getting the right professional help, make use of all available resources including governmental and non-governmental assistance and you should be on the way.
If you do so, you will succeed to varying degrees and you will survive. The quality of that survival will depend on how successful you are with your value innovation, your very own disruptive innovation.
So, follow your dreams.