As the so-called ‘3rd Platform’ technologies of cloud, mobility, big data, and social become more firmly entrenched across the region, a new band of innovation accelerators are lining up to transform the very fundamentals of how we do business. These digital game changers include the likes of 3D printing, wearables, robotics, cognitive systems, next-gen security, virtual reality, and the rapidly growing Internet of Things.
The task of incorporating these digital technologies into the very fabric of enterprise processes in order to drive new revenue streams and previously unimaginable efficiencies sits at the heart of a process that has become known as ‘Digital Transformation’. At IDC we define digital transformation as a continuous process by which enterprises adapt to or drive disruptive changes across their external ecosystems of customers and markets.
And while you might not know it yet, digital transformation is occurring all around us every second of every day, disrupting customers, business models, and even entire industries as it goes. Whether a business is using technology to better engage with its customers and suppliers, utilising new business models to keep pace with the explosive rate of change, or simply creating new strategies that rely on technology to accomplish day-to-day tasks, it has already taken its first steps towards enabling digital transformation.
At IDC we believe the single most important competency required to thrive in this new digital economy is the ability to rapidly respond to changing conditions within the ecosystem in which the organisation resides. And while warnings of impending change are nothing new in an industry that is driven by innovation, the current rate of change we are seeing within the ICT space is truly unprecedented.
As such, digital transformation is a foregone conclusion for most, if not all, businesses. It’s a process that simply has to take place to some degree in order to secure future profitability. And the stats certainly back this assertion up.
Each year, Forbes magazine releases its ‘Global 2,000’ ranking of the top 2,000 public companies in the world, and IDC predicts that by next year, 66 per cent of them will have placed digital transformation initiatives at the center of their corporate strategies. By the following year, we expect 75 per cent of them to have deployed ‘digital twins’ of their products/services, supply networks, sales channels, and operations, and by 2020, we believe the deployment of digital technologies will have improved the success rate of new products by as much as 70 per cent.
With this in mind, the choices at this point in time are to entrench and hope for the best; develop digital transformation competencies and become a disruptor; or split the difference and become a follower. Given these choices, IDC believes that CIOs should look to align their IT activities with the pre-requisites for true digital transformation by improving the customer experience and pursuing digitally enabled products and services.
They should shift their focus away from short-term internal operations to longer-term external projects, and also look to reduce the amount of time they have to spend on driving IT service availability, cost reductions, and business process optimisation. In this regard, it is important that CIOs look to maximise the time spent on innovative activities aimed at creating new IT services, improving the time to market, and increasing revenue.
Broadly speaking, I see digital transformation occurring across five key elements of the forward-thinking enterprise – leadership, information, operating models, worksource strategies, and the provision of a truly omni-channel customer experience. The extent to which digital transformation is embraced across these five critical areas means that enterprises can be split into resisters, explorers, players, transformers, and disruptors. And if you’re not at least exploring these exciting new opportunities by now, you may have already missed the boat.
This journey requires commitment across all levels of the enterprise, because simply dabbling in digital initiatives will not get an organisation where it needs to be in order to compete with the lean and lethal digital start-ups that are gearing up to steal market share.
For that reason, I strongly recommend the implementation of an optimised, end-to-end digital transformation strategy that is targeted at helping the organisation to work faster, lead smarter, and win the inevitable talent wars. Those organisations that embrace this approach and become true digital transformers will find themselves much better positioned to outwit their competitors and deploy solutions that reduce the risk and increase the reward.
Just about every operating unit of every corporation has already been disrupted by emerging digital trends in one way or another, and this process is only going to intensify over the coming years as more and more businesses figure out how to transform emerging digital technologies into reliable digital revenue streams.
With the rewards on offer including the ability to innovate faster, operate more efficiently, and connect with customers in real time, there has simply never been a better opportunity for the region’s organisations to scale up their digital initiatives and secure that all-important competitive advantage.
To download IDC’s full report on the topic, click here www.idcdxinsights.com
Jyoti Lalchandani is group vice president and regional MD at IDC Middle East, Turkey and Africa