Is your company still thinking of Digital Transformation? Do you have an alternative?
Companies which do not carve out Digital Transformation as a strategic options fail. Digitalization is no longer an option. Digitization is changing the way companies are thinking and working. Companies are using new technologies including broadband networks, cloud-based computing and mobile devices, to disrupt market leaders in no time, leaving them with no clue whatsoever.
In a digital world we are interacting through “smart” devices for a faster paced, less predictable decision making. Digitization is disrupting the existing competitive positions of many traditional businesses. In digitalization there is 10% technology and 90% behavior change, therefore CEOs face the challenge of how to handle the opportunities and risks of digital transformation.
Therefore, are you ready for the digital transformation? Many companies are yet to recognize the trend towards dematerialization – a by-product of digitization – that is turning our economy, industry and society on its head.
The fact is that the Indian companies are at one of the three levels of digitalization: First, Digitalization is alien concept to the top management. Second, Digitalization concept is introduced to the management and they are planning to make it a strategy. Third, Even if digitalization is a part of their strategy, they are too far from the real thing.
At many organizations, decision-making is an inside out approach and not the outside in. You need a clear picture of what lies ahead of your company if you want to take bold entrepreneurial actions. And your actions need to be digitally disruptive with a focus on consumers.
Forget your competitors. Think about your customers.
Digitization is more than just technological change. It is technological change that transforms business models. Businesses must make concrete decisions at the right time to safeguard their future. Everett Rogers’s theory of “Diffusions of Innovations” identifies five key segments of innovation, innovators, early adopters, early majority, late majority, and laggards. Now with the new disruptive innovation companies are better and cheaper from the word go and hence now there are only two segments, the users who participate with the company at the product development level and than there is consumers at large.
The most important consequence could involve not just digitizing your existing business, but radically rethinking both the entire portfolio of products and services and the priorities set for individual corporate functions.
Even companies, whose operations are completely digital, for example twitter also struggled with a technical architecture that didn’t scale fast enough. Whereas, technology like Microsoft Kinect brought life to the Xbox by activating Voice and motion to the gaming experience and the same technology was displayed by Tom Cruise in “Minority Report”, where he was able to manage data by hand motion.
The challenge of digitization is not about gaining a mastery of digital technologies. Instead, top management must create the conditions and culture needed to enable the transformation to a digitally mature organization.
According the German consulting firm Ronald Berger, the logic of the digital transformation has five key principles:
Source: Ronald Berger
- Companies need to transform their business models through relevant technological changes to stay ahead and secure their future.
- The responsibility of digitalization lies with the top management.
- The idea is not only to digitalize your existing business but also to digitally align all the corporate functions.
- To disrupt the market companies have to look beyond their core businesses.
- It’s not about acquiring technology but also create a culture for digital transformation within the organization.
Therefor the company who adopts digitalization will be far ahead in gaining competitive advantage. Claiming that we are not a digital company is no answer. You have to run faster than your competition in the new digital age. A story, which I read once, goes like this, there were two people relaxing on the riverside and they hear a tiger’s roar. One of them begins to put on his shoes. “What are you doing?” the other asks in disbelief. “You can’t outrun a tiger.” “I don’t have to,” the first one replies. “I just have to outrun you.” So, Plan D – Digital Transformation is not about running fast but running faster than your competition. So wear your running shoes, get on your mark, get set, go.
Published in Business World Magazine on: August 21st, 2017