Digital transformation is creating an unprecedented opportunity for innovation across all industries, and is seeing a total reinvention of products, services and experiences being delivered to the market.
Social media, Internet of Things, mobile - all these technologies are disrupting markets, and changing the way we connect, communicate and discover forever.
And to succeed in the digital era, organisations will need to become digital enterprises themselves, and rethink all aspects of their operations. Many have already embarked on this digital journey, and have begun automating and streamlining, investing in machine learning and artificial intelligence.
Some are concerned that technology and society are evolving faster than businesses are able to, and this ‘adapt or die’ fear is ushering in a new era of leadership, and new, innovative business models.
Others, are embracing this change, and investing heavily in digital transformation to adapt and outperform the competition.
But “digital” means many things to different organisations and in many cases, is being confused with the technologies that enable it, or the “digitisation”.
Schneider Electric views digital as a customer-centric value proposition, bearing in mind how digital technologies and information can enhance our existing assets and capabilities to create new customer value.
Other factors include today’s current market trends where commodity prices are in constant flux, and an era where globalisation and increased competition have become the norm.
A growing pressure to comply with quality, safety and environmental regulations, is driving digital too, as is the rise of the new workforce and the continuous acceleration of change.
The consumerisation of IT is also having a huge impact. For the first time, smaller entities have tools such as analytics and AI - previously only affordable to large enterprises - at their fingertips.
This is seeing a new wave of smaller, nimble incumbents rise up from nowhere, and start taking a slice of the market share.
There’s no doubt that digital has become a business imperative to improve operational efficiency, and drive profitability and agility, in order to become more responsive to changing customer demands, as well as maximise asset reliability and availability.
And digital transformation is not without its challenges. One challenge is the fear that digital transformation and with it automation, will mean job losses.
However, digital transformation should augment and not replace humans. Mundane, repetitive tasks and expensive activities within business processes that result in low output and poor job satisfaction, should be automated.
Removing these laborious activities will allow people to focus on creative, value-creating activities that increase job satisfaction and well-being, and will see a demand for new skills and roles that haven’t even been invented yet.
The greatest challenge is really the speed of change, and the need for ongoing re-education so that individuals are able to evolve with their jobs as they evolve.
A digital talent pool that is way too small, is already hampering the adoption of new solutions. A lack of ongoing employee training to ensure businesses remain up-to-date and relevant, followed by continuous rapid deployment of new tools before the previous deployments have been successfully adopted, can also wreak havoc.
Another challenge that is proving a barrier to adoption, are the poor technology foundations and cumbersome legacy systems that many businesses have, and that are neither streamlined or integrated.
Moreover, too many businesses implement technology and then try to solve a problem with it. They all have one thing in common, they are missing the point. Technology isn’t a silver bullet that solves all business problems, it is an enabler, designed to address specific challenge.
Instead, they should start small, collect some data, identify the outcome they hope to achieve, work on it quickly and either fail fast or iterate quickly to achieve the desired aim. Rather be directionally accurate than exactly wrong.
Finally, having no clear digital strategy communicated throughout the organisation is a problem too. Leadership must take the time to understand what digital means to the business, and define and communicate the digital strategy throughout it. Business owners must also drive a transformative culture where people are allowed to learn, experiment, innovate and even fail.
There is no ‘one size fits all’ approach to digital transformation, but there is a serious risk to businesses that do not have a digital strategy. Organisations need to transform and innovate, and reinvent and disrupt themselves, before they are disrupted and wiped off the map by new incumbents. The digital age is one of speed, and cycles are much shorter, meaning once you have fallen behind, you might not ever catch up.