‘Digital transformation’ is the current buzz word. Business consulting firms are busy helping clients find their digital strategies while the leadership teams are deeply engaged in understanding what ‘digital’ can do, to and for them. Very interestingly, if asked what is digital transformation, the responses are quite varied, implying that the wide scope of this phenomenon gives rise to diverging perspectives. However, in this ambiguity lies an entire set of new opportunities that are ready to unfold.
Internet technology increased the usage of computers and dependence on them for all kinds of information – weather, stock, sport, politics, current affairs, business investments, etc. With social media, mobile phones became the go-to device and with mobile apps, we discovered our network of friends; recommendations for buying products are made specifically based on individual preferences; notifications and updates based on one’s likes and home delivery of food and other goodies that were ordered online. Through mobile technology, we experienced the convergence of text, voice, and images, which could be easily created and widely shared. Pen and paper’s usage became occasional as punching the keyboard for texting became the preferred option. Also, cameras got sharper and feature-rich, built on digital technology, they helped in convergence of audio-video devices.
Businesses discovered a new way to reach consumers through social media and used that to gather customer insights, which aided in product and service level improvements. Organizations got access to real data, which got analyzed, leading to deciphering new patterns and emerging trends. Platform technologies like the online retail stores revealed that one needn’t have to own in order to sell; market reach wasn’t as much a challenge as delivery was; maintaining operations in a transparent manner – indicating where the product meant for delivery was, handling returns without hassles, exclusive product launches, etc. empowered buyers and encouraged them to experiment with their purchases. On the platform, genuine content became the product while everything else provided an experience to validate the content’s promise. These shifts impacted equations at the backend where products and services were being produced or configured. Technology enabled real data that told real stories which the fulfillment chain believed in. This led to technology enabling faster turnarounds of superior quality products and services.
Technologies like Internet, followed by social media, mobile apps and cloud, have enhanced the creation and consumption of digital data. So much so that 90% of all data got created in last 2 years! In 2015, it was estimated that 2.5 quintillion bytes of data got created every day. Managing such voluminous data require sophisticated systems and curation tools. Humanly, this cannot be managed. With more advancements in technology, more data are expected to be created and consumed. IoT (Internet of Things) enables the creation and communication of data between devices and machines. Artificial Intelligence can understand, process and respond intelligently, creating its own set of data which can be stored and retrieved in future. Blockchain, which is believed to hold various kinds of data in a very secure manner, further adds to the creation and consumption of data. The speed at which such data gets created and, the complexity of processes that create data need super systems to manage and comprehend them. When such super systems work in tandem, in the context of powering an organization’s business processes, digital transformation has got initiated!
The management of business functions and their information, which are part of a routine, day-to-day activities, including operational decision-making, being performed by super systems instead of human beings, is digital transformation.
The new technologies are not only efficient and capable but are also quick learners. They can be taught and trained to automatically perform certain routine tasks that are either manually cumbersome (movement of goods in a warehouse) or complex but highly structured (forecasting based on frequently changing parameters). As organizations implement new technologies for experiencing enhanced speed and scale of operations, more and more roles will come under the purview of these technologies for performing them. Functions like monitoring and control, activities like supplier payments or following up on collections, which are repetitive tasks, will get done by technologies. With time, these technologies will pick up skills in planning, budgeting, forecasting, coordination, costing, pricing, discounting, etc., edging out human effort from such tasks. Gradually, the organization will experience that its processes are activated and controlled by technologies and human skills are sparsely consumed on a day-to-day basis. As technology transitions from assisting a business’ core functions to performing the core functions, which further influences the speed and efficiency of operations, the organization has digitally transformed itself.
In the course of transformation, organizations will use several kinds of technologies that, while working in tandem, will appear like a well-coordinated team of highly skilled and efficient resources. In such organizations, human roles will be fewer (in terms of headcount), and therefore, the organization structure will appear very flat. However, human beings will be involved in managing impactful tasks that are business critical, which will call for judgement skills, critical thinking and spontaneity in decision-making.
Why ‘digital transformation’ is popular can be understood now. However, the ambiguity and uncertainty around industry verticals will create flavors of digital transformation – manufacturing will refer to it as Industry 4.0; retail and education may call that as Virtual and Augmented Reality and Healthcare and Fintech may use AI extensively.
These technologies are here to stay, influence and create new opportunities for organizations to explore and embrace. In doing so, there will be positive and negative impacts of transformation. Digital transformation will disrupt existing and conventional roles and therefore displace people from such jobs. But, it will also be the creator of new and empowered roles that give opportunities to those willing to reskill.
Digital technologies are poised to change everything that we are currently used to – professional engagements, tasks and targets, speed, accuracy and efficiency and access to data. They are also poised for creating new ways of thinking that will change our perspectives and become the reason for new philosophies to emerge. Digital transformation is a path for rediscovering and redefining!