If cloud computing is as nebulous a term as the metaphor, Digital Transformation is a plain language disguise for a potentially vast range of activity in ICT. It is of course not a technical term at all, just a handy and currently fashionable label for the next stages of our progression in the utilisation of technology in business, government and everywhere else. The word ‘profound’ is often used in descriptions and discussions and is probably the key.
It is already in many respects a digital world but there are many areas of human activity — and business and government processes — that are still analogue and comparatively primitive. The processes of transforming human activity into wholly and natively digital forms will not be completed by this generation and in any event will also be subject to ongoing technological advances and change.
What we are really talking about is business transformation in a digital world. The specifics are often technological — cloud gives rapidity and scalability. You can rent or licence proven technologies, not re-invent them. The result is or should be that you can focus tightly on what you want or need to do in your specific market, Neil Sholay, Oracle
Board level
But digital transformation demands thought, planning and change from every organisation. “It is a board level topic,” says Neil Sholay of Oracle, pointing out that it is the only viable option in a world that is becoming ever more interconnected, personalised and data-centric. “Look at it from the end user or consumer point of view. Most people today want to engage in different ways. Yes, old or young want to visit a shop or read a book, but they also want to enhance or augment those experiences with a digital channel to give a choice or a blended experience. So a business has to acknowledge and act on that fact.”
Another factor which generates a lot of discussion, he says, is the disruptive potential. “There are famous examples in the market, like AirBnB or Uber, and clearly any ambitious business will want to disrupt before it is disrupted. Another simple and obvious factor is money — businesses see money going to digital offerings in greater volume and they want a slice of it. But established businesses are also seeing their margins cut by alternative offerings — look at Lending Club versus traditional banking, for example.”
There are broader trends, Sholay points out, like the ways in which the market now consumes video and music and entertainment generally by subscription rather than purchase. It enabled consumers in a broader way and so the market liked and adopted it.
“A good example today is Virtual Reality. Right now full 360 degree VCR requires up to 30 cameras and complex software to stitch the images and costs roughly $6,000 a video minute. But our partner Samsung has produced an omniview camera, about the size of a football, that currently costs just $9,000 to purchase. VR has so many use cases, well beyond entertainment, that it is totally clear that VR technology is now crossing quickly from emerging to enabling. That is the point, in any sector, at which a business should be deciding whether there is a business model and opportunity there or whether it should be planning to counter.”
“What we are really talking about, in many ways, is business transformation in a digital world,” he believes. “The specifics are often technological — cloud gives rapidity and scalability, for example, so you can experiment aggressively. You can rent or licence proven technologies, not re-invent them. The result is or should be that you can focus tightly on what you want or need to do in your specific market.”
Metamorphosis
Digital transformation is a phrase used in multiple ways today, particularly depending on the business and the ways in which it is searching for growth and seeking to overcome challenges, says Vicky Godolphin, head of Digital in Accenture Ireland. “I’m inclined to borrow the caterpillar and butterfly analogy. To me much of the efforts to use technology for greater efficiency, and to move the business along, are really just making the caterpillar go faster. When you are employing digital technology to profoundly change the way your business operates, to re-invent it, to offer different customer and employee propositions, that’s when we are talking about actual transformation — caterpillar to butterfly.”
Many Irish organisations are beginning to change their own mind-sets in business, she says, and the ways in which they approach strategic change. “They are looking beyond their own processes, aiming to be much more customer-led in their design. They are looking to create experiences rather than products or marketing campaigns for consumers, who are ever more demanding — and changing what they want and how they want it all the time. But smart businesses are using that customer focus to drive the technological change and agility rather than just their internal processes.”
I’m inclined to borrow the caterpillar and butterfly analogy. To me much of the efforts to use technology for greater efficiency, and to move the business along, are really just making the caterpillar go faster. When you are employing digital technology to profoundly change the way your business operates, to re-invent it, to offer different customer and employee propositions, that’s when we are talking about actual transformation — caterpillar to butterfly, Vicky Godolphin, Accenture
Consumers do not know quite what they want, in many respects, Godolphin points out. “Today we are looking for good experiences. We want to be surprised — in good ways — and delighted, stimulated, engaged in the interactions we have with services or buying stuff. Much of that can be quite ordinary. I want my transaction to be fast, clear, information on hand when I want it, no fuss, no friction and in fact not necessarily any frills either.”
But that is the driver, while the actual transformation comes within the business, stimulated and informed by that new digital world and its manifestations, she says. “We have much richer attitudinal and behavioural data, for example, that enriches the standard customer profiles of the past. That famous 360-degree view of the customer now actually is. The digital aspects are key, the technology is constantly developing, but it is all an enabler while the transformation is actually in the business.”
Data-driven business
Dejan Ćušić of Comtrade sees it as a set of transformations which are all related to each other. “One is business transformation, which is about finding and pursuing new business models. IT transformation is about making IT a strategic partner. But digital transformation, in my view, is about what data can do for your business. It is also about looking at business strategy, alongside technical capabilities, and how that will change how you are operating and generating your revenues. In practical terms, it is using technology to radically change and improve performance and the reach of the business. It is also complex, involving disruptive technologies and complex surgery around customer experiences, operational processes and business models.”
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