Digital transformation is driven by proliferation and adoption of new technologies in the workplace. These technological capabilities include enterprise social, mobile, Cloud, big data, artificial intelligence, and connected devices.
Companies are striving to create new digital business models and rush to gain new digital revenue streams to compete against digital-native startups. Digital markets and digital channels continue to grow and dominate commerce.
Companies need a number of key capabilities for digital transformation:
- The right competencies such as DevOps, Agile, micro-service development
- Adoption of Artificial Intelligence and Machine Learning
- Ability to manage the explosion of useful but unstructured data
- IoT device management
- Network security
- Integration of services deployed over multiple clouds
For example, industrial companies must manage data and telemetry from connected devices effectively to enhance efficiencies and uptime. Support organizations can use data for more efficient frontline support and faster time to issue resolution. Tools such as augmented reality can help support teams better diagnose issues. Personalization happening in the travel industry can be expanded to other industries. Retailers can use data to provide more focused and more personalized services across multiple channels. Manufacturing companies are moving to offer outcome-as-a-service instead of selling equipment by better using the data and offer profitable subscription services. Tachnology can be applied to customer experiences, for example implementing conversational interfaces and concierge services.
ROI for digital transformation
Return on investment for digital transformation requires a deeper analysis of the impact of the technology on the overall business model. Digital transformation is becoming a core requirement of the value proposition in a number of industries. Digital transformation is about creating competitive advantage by making digital a part of the DNA of the business model. Bolt-on technologies are not sufficient to compete with digital natives that have changed the rules of the game by rethinking the business model entirely. Companies that apply the technology as bolt-on are missing the value and impact of digital from the customer’s perspective and thus struggle to see the value proposition in digital transformation.
Business Model Transformation
A Digital revolution is changing the way people work. Technology is allowing organizations to enhance the speed of internal communication and decision making, share and collaborate for innovation, transform customer experiences. The traditional business models get in the way of adopting new technologies to their full value. Most stop short of transforming their delivery model to take the customer experiences deeper for example utilizing artificial intelligence (AI) to customer data to innovate and meet unmet needs.
Transforming the business model requires understanding the customer’s undefined needs, redefining the channels of distribution, and rethinking the customer relationships based on the power of digital. Digital transformation can enhance operational efficiencies and connect the operations directly with customer experiences such as Omni channel capabilities. Building new business models require agility in implementation. Marketing digitization, sales support capabilities, and customer experiences need to come together to deliver on a brand’s promise.