Described by some as the 4th Industrial revolution, Digital Transformation is infiltrating everyday lexicon in business. And it isn’t one of those buzzwords you can just ignore! Digital Transformation is happening all around you. It’s happening at home, at work and everywhere else. It certainly isn’t just isolated to business.
What is Digital Transformation?
The most confusing part about Digital Transformation is the world “Digital”. Digital Transformation actually has very little to do with technology. Of course, technology has helped to facilitate this change. But Digital Transformation is much more than just technology. It refers to a fundamental shift in thinking, thought, process and behaviour because of technology.
I’ll give you an example. In 2003, tech giant Apple opened their now famous iTunes store. In it’s first week, it sold over 1,000,000 tracks. Why? Because it revolutionised the way consumers could access music. At the same time, it launched it’s latest iPod which could link to your computer via USB to download tracks from the app store.
The thinking behind iTunes and the iPod was simple. They thought: “How can we solve the problem of being able to listen to whatever music you want, whenever you want, purchase the music you want at any given time And fit all of this into your pocket?“ The answer? iTunes and the iPod. The technology available to Apple at the time merely facilitated the solution to those issues.
It’s this sort of radical thinking that’s a key part of Digital Transformation.
Why is it important?
Digital Transformation is important because it is fundamentally altering the very fabric of our society. Some of the biggest companies in the world didn’t exist a decade ago – and their impact on society has been profound. AirBnB for instance has shook up the hotel industry, Uber, has revolutionised the Taxi business and finally Twitter has altered the way we receive, digest and react to news.
Failure to observe trends in the market can have disastrous consequences. Perhaps one of the most famous cases of recent times is the Blockbuster vs Netflix case. In the space of a decade, Blockbuster went from being the market leader in the video rental business, to being bankrupt.
They were usurped by Netflix, who disrupted their business model by adopting a subscription approach to video rental. By observing the market and predicting technological advances, Netflix took a risk and invested in video streaming technology. The gamble paid off, as in 2017 Netflix recorded record profits and is the largest video content provider in the world.
The danger of not paying any attention to Digital Transformation is very quickly your business can become obsolete and irrelevant. A bit like Blockbuster.
Why is everything Digitally transforming?
Before I answer this question, let’s just take a step back for second. This isn’t the first time Digital Transformation in some guise has happened. In fact, it’s happened repeatedly throughout human history.
In 1876, Alexander Graham Bell invented the first telephone. In 1905 2.2 million people were using telephones. In 1910 this figure exploded to well over 10 million. It’s the same story for the TV. It was first unveiled in 1927 by 21 year old inventor Philo Taylor Farnsworth. To put the mass adoption of the TV into context, in 1939, there were 7,000 TV sets in existence in the United States. By 1959, this figure was 67,145,000 – an exponential rate of growth!
The point of these figures? Rapid adoption is becoming common-place in our society. Facebook was launched in 2004 and just 10 years later, it had 1,39 billion active users across the globe.
So to answer your question, “Why is everything Digitally Transforming?” It’s because of mankind. We’re relentless innovators.
So are you trying to tell me Digital Transformation isn’t actually Digital Transformation?
Exactly, that’s exactly right! I mean, it is Digital Transformation. But it isn’t being led by Digital Technology. It’s a fundamental re-alignment of society because of digital technology.
What should I expect?
Disruption. Lots of disruption! Disruption has become the new norm in the modern era. People, businesses, processes and society are changing in the blink of an eye. New technologies will emerge, and render older ways of doing things obsolete For instance, automation is a huge part of the Digital Transformation with Google pouring money into driverless cars. Microsoft is doing fantastic work with AI technology and their Dynamics 365 product. It utilises Deep Learning algorithms to prompt your sales staff on what it thinks they should do next to close a deal.
These initiatives might seem pie in the sky right now, but cast your mind back 20 years ago. Who would’ve thought you’d have a computer capable of surfing the internet in your pocket?
What does this mean for my business? And what can I do?
The first thing you need to do is acknowledge change is coming. And it’s about learning how things are going to change, so you and your business can be ready in time. Failure to prepare could result in your business becoming irrelevant or even being replaced!
You’ll need to start planning for the future now. Take a look at emerging technologies. Is there anything that could give your business Competitive Advantage?
What’s next?
We’re kick-starting our Digital Transformation mini-series with this blog. Over the coming weeks, we’ll be discussing what SMEs can do to embrace Digital Transformation and what measures and technologies they can implement to stay relevant.
Do you have any questions or insight about Digital Transformation? We’d love to hear about it, so please leave us a comment below!
