DOCSLIB.ORG

6 Ways Digital Transformation Is Reshaping the World

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
6 Ways Digital Transformation Is Reshaping the World 6 Ways Digital Transformation is Reshaping the World Brought to you by the Stanford Digital Transformation Program. ONLINE Contents 1. Introduction 2. Personalized Digital Experiences 3. Business Run from the Cloud 4. Data-Driven Decision Making 5. The Internet of Things 6. Accelerated Business Processes with Automation 7. Artificial Intelligence 8. Conclusion – The Future of Digital Transformation ONLINE Introduction Digital transformation is reshaping the world. It is accelerating the pace of technical and organizational innovation, empowering new market entrants, and generating new categories of goods and services that are, in turn, altering how we live, work, and play. While the term can be defined in a variety of ways, digital transformation typically references two fundamental shifts: • a transformation in the effectiveness and sophistication of digital technologies • the adoption of new business cultures to facilitate digital transformation These shifts are being driven by the promise of increased agility and greater cost efficiencies and are enabled by a set of powerful new digital tools that include cloud computing, artificial intelligence, and predictive analytics. But they also require that organizations rethink how they use technology, people, and business processes. That is a complex undertaking and far from simple to master. It typically requires executive support and the assembly of dedicated teams trained specifically for the effort. Yet the pressures to change are immense. Digital transformation enables startup companies to develop new goods and services that can disrupt existing markets and increase customer expectations, e.g. gig economy services, self-driving automobile technologies, precision agriculture, customized 3D printed parts, and app-based payment systems. At the same time, digital transformation offers legacy companies a pathway to increased agility and lowered operational costs, allowing them to compete with new market entrants. The two groups are collectively reshaping the competitive landscape of almost every sector of every major economy. It’s no surprise that in a 2020 survey of enterprise IT leaders, It’s no surprise that in a 2020 survey of enterprise IT leaders, 93% reported having digital transformation projects underway. Still, almost half (42%) of those same leaders 93% reported having digital transformation projects underway. reported being behind in their efforts or being completely stalled. Still, almost half (42%) of those same leaders reported being An effective digital transformation project requires a full understanding of the possibilities of a transformation. behind in their efforts or being stalled altogether. ONLINE 1 According to a 2018 report from the Pew Research Center, 73% of buyers point to customer experience as an important factor in purchasing decisions. #1 Personalized Digital Experiences One of the earliest and most dramatic changes wrought by digital generate streams of data documenting our behavior, activity, and preferences. transformation—and a driver of further change in sectors as diverse as retail, Companies use this data to ensure a consistent brand experience across transport, entertainment, social interaction, and healthcare—has been the multiple interfaces and to personalize customer interactions via curated advent of highly-personalized digital experiences. product recommendations and targeted promotions. These first appeared with the development of online digital platforms but took According to a 2018 report from the Pew Research Center, 73% of buyers point off with the introduction of smartphones. to customer experience as an important factor in purchasing decisions. And some 63% of customers expect high levels of personalization today, meaning Mobile, connected digital platforms have reframed the brand/consumer it no longer confers competitive advantage, but is instead now a standard relationship and in the process upended entire industries. They’ve changed how requirement for consumer-facing industries. we buy books, clothes, food, and even houses and cars; how we interact with each other and learn about what is happening in the world; how we interact In the last half decade, the rise of social media has taken this all a step further with services like banks and healthcare providers; how we find flights, rides, or by blurring the distinction between consumer and brand. “Influencers” are hotel rooms; and how we consume media like music and tv shows. now paid to be brand ambassadors to their niche audiences and almost anyone today can easily establish a brand of their own, making money through This is about more than ease of access or charging lower prices (although both activities as varied as dancing, reviewing, music-making, video creation, have been important factors driving the adoption of these platforms). All of crafting, or simply making recommendations to others. the apps and websites via which we now regularly access goods and services ONLINE 2 As of 2019, 41% of business workloads were running in the private cloud, while 38% ran in the public cloud. In addition, 58% of companies reported having a hybrid cloud strategy under development. #2 Business Run from the Cloud Flexible, dynamic, and ubiquitous digital platforms would not have emerged Just as significantly, on-demand computing has allowed new businesses to without the advent of public cloud computing. Cloud computing of any kind grow with unprecedented speed, enabling market entrants like online movie deploys remote compute resources to store, manage, and process data, streaming, online music streaming, ride sharing apps, and short term rental typically in ways that abstract out (or ‘virtualize’) physical servers, data apps to develop into billion dollar “unicorns” seemingly overnight. centers, and even networks. Many companies now run their entire businesses through public, private, Most importantly, cloud networks centralize IT provision, offering individual or hybrid clouds, reducing operational costs, simplifying IT management, groups within a larger organization access to compute resources on demand improving service delivery, and minimizing risk. As of 2019, 41% of business while avoiding over-provision and generating significant efficiencies of scale. workloads were running in the private cloud, while 38% ran in the public cloud. In addition, 58% of companies reported having a hybrid cloud strategy The cloud model of distributed computing has existed in one form or another under development. for decades, but 2006 saw the advent of the first commercial services selling compute resources to customers on demand. Most recently, public clouds have been instrumental in enabling a rapid shift to remote work arrangements in light of the COVID-19 pandemic. Access to Since then, pay-as-you-go computing has been a massively disruptive force in fast-scaling public cloud services has allowed teleconferencing companies, for almost every industry, offering startups instant access to compute resources example, to expand their service in a matter of days, allowing employees to without needing to first invest in expensive hardware. As this has lowered collaborate with co-workers, communicate with customers, and maintain barriers to new market entrants, we’ve seen software-based solutions high levels of productivity even as they are required to work from home. targeting a expanding range of markets. ONLINE 3 #3 Data-Driven Decision Making The shift to digital platforms has made data both discoverable and actionable. In leading organizations, data collection and analysis now operates at increasing scales and guides decision-making across all aspects of business operations. Moreover, where data relating to specific business functions (supply chain, marketing, customer experience, etc.) or individual business units had been historically siloed, data from across the enterprise is now being collected and analyzed to inform and improve corporate decision-making in areas including strategy, planning, human resources, product development, intellectual property management, partnerships, marketing, and communications. The impetus here, again, is both agility and efficiency. In a survey conducted for the MIT Center for Digital Business, MIT professors Andrew McAfee and Erik Brynjolfsson found that companies adopting a data-first approach saw a 4% increase in productivity and 6% higher profits. To note just a few examples of data-driven innovation: major retailers now deploy sophisticated data analytics to predict which products shoppers in any region are most likely to purchase, allowing them to maximize the number products available in local warehouses for one-day, or even same-day, shipping; technology companies are collecting data on managerial performance to develop more effective employee training programs; and even sports leagues are in on the game, with teams in a wide variety of sports gathering data on individual and team performance to inform team selection, tactics, and trades. Data analyses are typically displayed in information “dashboards” that offer decision makers instant access to key metrics and dynamic reports of trends. These now inform and optimize activities ranging from R&D, lead generation, accounting, marketing, HR, product pricing, and supply chain and channel management. But they are also only as good as the Data science can be used as both a technical data they collect and the care that goes into their design. tool kit as well as a mindset for improving As a result, data
Load more

Recommended publications
  • Data in the Digital Age
    March 2019 Data in the Digital Age The growing interactions between data, algorithms and big data analytics, connected things and people are opening huge new opportunities. But they are also giving rise to issues around “data governance” at the national and international levels. These include questions around the management of data availability, accessibility, usability, integrity and security, as well as concerns about ownership, impacts on trade and competition, implications for personal privacy, and more. Policy makers across government are grappling with these issues. The use of digital technologies and data underpins digital transformation across all sectors of economies and societies, meaning that any policy decisions on data can have wide effects. Instilling trust in the use of data is a pre-condition for fully realising the gains of digital transformation. This in turn calls for policy makers to better understand and account for the heterogeneity of data, to take a strategic approach to its governance and ensure all policy objectives are considered, and to upgrade their own capabilities to harness data for better policy making. Key policy directions Recognise that there are different types of data, and measure the economic and social value of data and data flows. Many different types of data are collected and used, and their purpose and value can differ widely. Without recognising these different kinds of data, governments will not be able to effectively address issues such as personal data protection or competition. Better measurement of data and data flows and their role in production and value chains will also help support policy making. Develop national data strategies.
    [Show full text]
  • Six-Gear Roadmap Towards the Smart Factory
    applied sciences Review Six-Gear Roadmap towards the Smart Factory Amr T. Sufian 1,*, Badr M. Abdullah 1 , Muhammad Ateeq 1 , Roderick Wah 2 and David Clements 2 1 Faculty of Engineering and Technology, Liverpool John Moores University, Liverpool L3 3AF, UK; [email protected] (B.M.A.); [email protected] (M.A.) 2 Beverston Engineering Ltd., Prescot L34 9AB, UK; [email protected] (R.W.); [email protected] (D.C.) * Correspondence: a.t.sufi[email protected] Featured Application: This work is beneficial to bridge the gap between advanced technologies and their applications in the manufacturing industry, especially for SMEs. Abstract: The fourth industrial revolution is the transformation of industrial manufacturing into smart manufacturing. The advancement of digital technologies that make the trend Industry 4.0 are considered as the transforming force that will enable this transformation. However, Industry 4.0 digital technologies need to be connected, integrated and used effectively to create value and to provide insightful information for data driven manufacturing. Smart manufacturing is a journey and requires a roadmap to guide manufacturing organizations for its adoption. The objective of this paper is to review different methodologies and strategies for smart manufacturing implementation to propose a simple and a holistic roadmap that will support the transition into smart factories and achieve resilience, flexibility and sustainability. A comprehensive review of academic and industrial literature was preformed based on multiple stage approach and chosen criteria to establish existing knowledge in the field and to evaluate latest trends and ideas of Industry 4.0 and smart manufacturing technologies, techniques and applications in the manufacturing industry.
    [Show full text]
  • Application-Centric Transformation for the Digital Age APRIL 2017
    BLACK & WHITE PAPER Application-Centric Transformation for the Digital Age APRIL 2017 PREPARED FOR ©COPYRIGHT 2017 451 RESEARCH. ALL RIGHTS RESERVED. About this paper A Black & White paper is a study based on primary research survey data which assesses the market dynamics of a key enterprise technology segment through the lens of the ‘on the ground’ experience and opinions of real practitioners — what they are doing, and why they are doing it. About 451 Research 451 Research is a preeminent information technology research and advisory company. With a core focus on technology innovation and market disruption, we provide essential insight for leaders of the digital economy. More than 100 analysts and consultants deliver that insight via syndicated research, advisory services and live events to over 1,000 client organizations in North America, Europe and around the world. Founded in 2000 and headquartered in New York, 451 Research is a division of The 451 Group. © 2017 451 Research, LLC and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publi- cation, in whole or in part, in any form without prior written permission is forbidden. The terms of use regarding distribution, both internally and externally, shall be governed by the terms laid out in your Service Agreement with 451 Research and/or its Affiliates. The information contained herein has been obtained from sources be- lieved to be reliable. 451 Research disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although 451 Research may discuss legal issues related to the information technology business, 451 Research does not provide legal advice or services and their research should not be construed or used as such.
    [Show full text]
  • How Organizations Have Progressed in Their Digital Transformations Over the Past Two Years Executive Summary – Key Takeaways
    Digital Mastery How organizations have progressed in their digital transformations over the past two years Executive Summary – key takeaways Organizations have advanced their Talent and culture initiatives take precedence Our research has consistently found that culture is a top digital and leadership capabilities barrier to successful digital transformation. The progress over the past two years organizations have shown over the past two years is encouraging, suggesting more organizations are paying On average, 60% of organizations today say they have the attention to the importance of culture. digital capabilities and 62% say they have the leadership • For example, 67% of organizations today said they actively capabilities required for digital transformation – up 24% promote the exploration of new ideas and experimentation and 26% from 2018, respectively. We realize the scale of compared to only 35% in 2018. increase from 2018 to 2020 that our research reveals is vast. • And many more organizations today involve employees in There is no doubt that the COVID-19 pandemic has forced their digital initiatives – 63% in 2020, up from 36% in 2018. many companies to reinvent themselves and accelerate their transformation. Given this urgency for change – and Upskilling, sustainability, and purpose needs more less resistance to it – it could be that respondents are more attention enthusiastic and optimistic about the maturity of their More organizations are focused on upskilling employees in organization’s overall capabilities today. Since they were 2020 than they were in 2018, but the increase has not been as witnessing such a rapid pace of capability building in areas significant as in other areas.
    [Show full text]
  • Fourth Industrial Revolution Beacons of Technology and Innovation in Manufacturing
    White Paper Fourth Industrial Revolution Beacons of Technology and Innovation in Manufacturing In collaboration with McKinsey & Company January 2019 World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel.: +41 (0)22 869 1212 Fax: +41 (0)22 786 2744 Email: [email protected] www.weforum.org This white paper has been published by the World Economic Forum as a contribution to a project, © 2019 World Economic Forum. All rights insight area or interaction. The findings, interpretations and conclusions expressed herein are a re- reserved. No part of this publication may be sult of a collaborative process facilitated and endorsed by the World Economic Forum, but whose reproduced or transmitted in any form or by any results do not necessarily represent the views of the World Economic Forum, nor the entirety of its means, including photocopying and recording, or Members, Partners or other stakeholders. by any information storage and retrieval system. Contents Foreword 5 Executive summary 6 1. Lighthouses: Sites Embracing the Megatrends of the Fourth Industrial Revolution 8 Seeing the light: A radical leap forward for Fourth Industrial Revolution front runners 8 Identifying lighthouses 8 2. Overview of the Global Lighthouse Network 10 3. Understanding Lighthouses: Characteristics, Differentiators and Success Factors 14 Lighthouse characteristics 14 Injectors of human capital 14 Industry leaders that are resetting benchmarks 14 Open innovators and collaborators 15 Large and small companies 15 From emerging and developed economies 15 High impact with minimal replacement of equipment 16 4. How Do the Lighthouses Achieve Impact at Scale? 17 Charting a course for scale: Two routes 17 Value drivers for impact at scale 18 Scale-up enablers 18 The current state of lighthouses 18 Three tools to scale Fourth Industrial Revolution technologies in production and overcome 19 pilot purgatory 5.
    [Show full text]
  • 2021 Digital Transformation Assessment
    2021 DIGITAL TRANSFORMATION ASSESSMENT COVID-19: A CATALYST FOR CHANGE Researched and produced by: Commissioned by: Additionally, almost all of the senior This is clearly evident in their customer decision makers interviewed for this growth plans, with better serving existing EXECUTIVE report noted that manual reporting and clients and winning new work a significant data collection was still prevalent in their business imperative for 87% and 69% of organisation. respondents, respectively – particularly SUMMARY those who have witnessed a dramatic The findings discussed within this report It’s logical, therefore, to see rising numbers and rapid decline in their core markets. reveal the digital transformation of of operations adopting digital tools to industry across two time horizons. perform data gathering exercises or to In order to achieve this, manufacturers fulfil simple HR and finance transactions. are increasingly taking the data and A large proportion are also upgrading insights they’ve unlocked to maximise IMMEDIATE PRIORITIES their production systems, particularly operational efficiency and using it to The first is the short-term actions those involved with overall equipment innovate their offerings and transition manufacturers have had to take effectiveness (OEE), and manufacturing/ from selling products to offering in response to a highly volatile, enterprise resource planning (M/ERP). experiences. unpredictable trading environment. Businesses have faced disruption at It’s also encouraging to see cybersecurity If 2020 was the year for internal digital every turn and the vast majority have and cloud computing as the most widely transformation, 2021 is when attention demonstrated an incredible capacity to adopted technology use cases. This will turn to the external, customer-facing embrace change at speed.
    [Show full text]
  • 2021 Retail Digital Transformation Survey Contents
    2021 Retail Digital Transformation Survey Contents 03 Introduction When Everyone Is Doing Digital, Execution is 05 the Differentiator 06 CX Remains Retail’s Top Digital Priority 08 A Re-imagined Retail Workforce 10 Efficient Supply Chains Hinge on Data Analytics 11 Cyber and Data Privacy Risks Persist Amid Digital Shifts 12 Conclusion About the 2021 Retail Digital Transformation Survey About BDO’s Retail and Consumer Products Practice 2021 RETAIL DIGITAL TRANSFORMATION SURVEY 2 Introduction Before the pandemic, digital transformation was considered a critical path to business longevity. In a matter of months, it became the only path. Retailers that thought they were ahead of their competition when it came to technology soon saw weak points, as COVID-19 forced businesses to rely on digital like never before. More resources do not necessarily make large, established retailers In the 2021 Retail Digital Transformation Survey, just 10% of retailers say superior better equipped to pivot, and on the other end of the spectrum, technology is their top competitive differentiator, down from 25% that said the startups may lack the means and infrastructure to scale. Middle market same in early 2020. retailers now have a unique opportunity to beat the competition, but to do it, they’ll need shorter timelines, bolder moves and stronger data. As the industry shifts from maintenance to recovery mode, the lessons learned and the innovations developed during the pandemic will be valuable, but they won’t be NATALIE KOTLYAR enough on their own. To propel business forward, retailers need to double-down on Partner and National Retail & Consumer investments that integrate their digital and physical shopping experiences.
    [Show full text]
  • Digital Transformation in Order Management
    DIGITAL TRANSFORMATION IN ORDER MANAGEMENT Replacing high-touch order management procedures with AI-powered automation increases productivity and better serves customers DIGITAL TRANSFORMATION IN ORDER MANAGEMENT Executive Summary Processing orders is one of the most, if not the most important part of any business endeavor. After all, order fulfillment is the cornerstone of most profit for any organization. Yet, order processing can take an inordinate number of man hours and introduce inefficiencies into operations, especially when manual processes are used for order fulfillment. What’s more, orders are the foundation of the supply chain, impacting every step of the supply chain from manufacturing to shipment to delivery. Without orders, the supply chain becomes irrelevant. Numerous businesses view order processing as a cost of doing business, ignoring the potential value of streamlining and automating the process. Many businesses still process purchase orders using manual steps that include the need to route paper copies of orders, move copies of those orders across departments and manually track the fulfillment process — all while informing those responsible for supply chain operations of what is needed and when. What’s more, manual processes introduce the possibility of errors or oversights, further reducing productivity and ultimately impacting customer sentiments. The biggest improvements to the order processing process can be realized by introducing automation and reducing the need for physical paperwork to traverse the fulfillment chain. In other words, digitizing order processing workflows can help businesses improve fulfillment speeds, reduce the chance of errors, better calculate fulfilment costs, and improve the ability to measure efficiencies. Automation also brings with it the capability for BI (Business Intelligence), data analytics and other analysis that can further improve the overall supply chain.
    [Show full text]
  • The Fourth Industrial Revolution. Change Brings Opportunity
    Welcome to the fourth industrial revolution. The Internet of Everything is transforming the way every business operates. It is ruthlessly redrawing industries and reinventing our future. Some companies are faring better than others in the race to become a digital business. 4,000 business leaders across the globe weigh-in on their progress. The revolution is already here. Business leaders see a chaotic, uncertain future ahead. don’t know what their industry feel threatened by digital fear they may become will look like in 3 years startups obsolete in 3-5 years Pressure is increasing in all directions. Who is driving digital transformation? Line of Business Leaders Competitors C-Suite Customers Have seen new competitors enter the marketplace as a result of the emergence of digital technologies Progress has been patchy so far. Leaders agreed the following digital business attributes are imperatives to success: Predictively Demonstrate Deliver unique Innovate in Operate in spot new transparency and personalized agile ways real time opportunities and trust experiences are not implementing the digital attributes well are unable to meet top customer demands confess digital transformation could be more widespread in their organization What’s slowing digital progress? Here are the top 5 most commonly noted barriers: 1. Insucient budget and resources 2. Inadequate skills & expertise 3. Lack of senior support 4. Technologies working at speed of business 5. Data privacy and security concerns Businesses still have a huge opportunity to get this right. This is how leaders plan to leap ahead: say a centralized tech plan to expand their are incentivized to invest in IT strategy needs to be a software development infrastructure and digital skills priority capabilities leadership Top technology investments over the next 3 years: 1.
    [Show full text]
  • The Role of Blockchain Technology in Ensuring Digital Transformation for Businesses: Advantages, Challenges and Application Steps †
    Proceedings The Role of Blockchain Technology in Ensuring Digital Transformation for Businesses: Advantages, Challenges and Application Steps † Gokhan Kirbac 1,* and Berna Tektas 2 1 Department of Logistics, Vocational School, Istanbul Kültür University, Istanbul 34000, Turkey 2 Department of Business Administration, Faculty of Economics and Administrative Sciences, Izmir Katip Çelebi University, Izmir 35000, Turkey; [email protected] * Correspondence: [email protected] † Presented at the 7th International Management Information Systems Conference, Online, 9–11 December 2020. Abstract: In recent years, the concept of digital transformation has emerged as an area where businesses have been working intensively. Digital transformation refers to the holistic transfor- mation of businesses in human and business processes and technology elements in order to pro- vide more effective and efficient services. Therefore, blockchain, which is called a disruptive tech- nology, has great importance in ensuring the digital transformation of businesses. In this study, some determinations have been made about the adoption of blockchain technology and situation analysis while performing digital transformation in businesses. In this context, semi-structured in- terviews were held with experts in the blockchain field. Keywords: blockchain technology; digital transformation; blockchain advantages and challenges Citation: Kirbac, G.; Tektas, B. The 1. Introduction Role of Blockchain Technology in Today, as a result of the rapid development of the internet infrastructure, the sub- Ensuring Digital Transformation for ject of information technologies has become important for businesses, along with the Businesses: Advantages, Challenges concept of digitalization. It can be said that technological advances that enable digitali- and Application Steps. 2021, 74, 17. https://doi.org/10.3390/proceedings2 zation contribute to the digital transformation of business models.
    [Show full text]
  • Unlocking Success in Digital Transformations
    Unlocking success in digital transformations Digital transformations are even more difficult than traditional change efforts to pull off. But the results from the most effective transformations point to five factors for success. OCTOBER 2018 • ORGANIZATION Jean-François Martin As digital technologies dramatically reshape industry after industry, many companies are pursuing large-scale change efforts to capture the benefits of these trends or simply to keep up with competitors. In a new McKinsey Global Survey on digital transformations, more than eight in ten respondents say their organizations have undertaken such efforts in the past five years.1 Yet success in these transformations is proving to be elusive. While our earlier research has found that fewer than one-third of organizational transformations succeed at improving a company’s performance and sustaining those gains,2 the latest results find that the success rate of digital transformations is even lower. The results from respondents who do report success point to 21 best practices, all of which make a digital trans- formation more likely to succeed. These characteristics fall into five categories: leadership, capability building, empowering workers, upgrading tools, and communication. These categories suggest where and how companies can start to improve their chances of successfully making digital changes to their business. Transformations are hard, and digital ones are harder Years of research on transformations has shown that the success rate for these efforts is consistently low: less than 30 percent succeed.3 This year’s results suggest that digital transformations are even more difficult. Only 16 percent of respondents say their organizations’ digital transformations have successfully improved performance and also equipped them to sustain changes in the long term.
    [Show full text]
  • Strategy in the Digital Revolution Introduction
    Strategy in the Digital Revolution Introduction Digital had already established itself as a primary Strategy needs to move at the speed of digital driver of winners and losers across industries, for an organization to survive and thrive. The and the COVID-19 crisis has only accelerated the firms that will be successful will adopt a new urgency with which organizations need to evolve strategy playbook that adapts to ongoing their strategies and business models. As Satya complexity and speed, looking well beyond the Nadella, CEO of Microsoft, has declared: “We’ve short-term planning horizon. They will understand seen two years’ worth of digital transformation in technology beyond the purely executional and two months.” reframe it as a primary driver of both business strategy and innovation. In a context of massive disruption and exponential change, incremental approaches Now is the time for leaders and organizations are not fit for purpose. New foundations have to recalibrate portfolios, revisit strategy and emerged that will underpin competition for redeploy their financial and talent resources to the next generation. Post-crisis, the winners survive and thrive. will be led by leaders who have reinvented their strategies and thinking to adapt to these new foundations and developed new strategic capabilities in their organizations. As President of Forrester Research George Colony wrote, “The world is going even more digital because of this crisis, and old industrial era thinking needs to be abandoned once and for all.” About the Masterclass The Strategy in a Digital Revolution Masterclass is a modular series of live virtual sessions tailored to your organization’s needs.
    [Show full text]