For businesses today, nothing is a greater priority than digital transformation. The reasons are clear: digital technologies are radically enabling new ways to deliver value to customers, altering competitive landscapes, and changing the underlying economics of markets. Agweria is enabling businesses/corporations and enterprises to develop a strategy for digital transformation. Learn more on how your business can leverage digital transformation and the benefits you will realize.
Rapid Changes in Technology
Technological change is nothing new, and often rapid — but this round of change is happening at a rate faster than ever before. Some businesses cite the risk of disruption as the impetus for transformation; that risk is certainly real. But while new and modern technologies may threaten established businesses, they can also create unprecedented opportunities. In fact, an increasing number of business executives are more concerned with missing opportunities to grow, than being forced into oblivion. It is not a digital disruption that impels companies to change, it is the fear of missing out.
In this context, it is however surprising that most businesses still view digital transformation too narrowly. First, digital transformation is not monolithic. There are four types of digital transformation:
- business process
- business model,
- business domain,
We often see corporations focused solely on the process or organizational transformation. Failure to address all four types leaves significant value on the table. Second, the multi-dimensional nature of digital transformation means execution must be a team activity, involving several stakeholders. It should be championed from the top-level management to the lower-level employees. Third, too many corporations erroneously believe digital transformation must begin with cultural/organizational transformation. Teaching the organization to be more innovative, agile, and digital is indeed important, but we see greater success among corporations that first pursue business transformation initiatives.
There are significant opportunities being created by new technologies, but corporations that don’t recognize and pursue transformation in a multi-dimensional way may find themselves missing out. Here are the four types of transformation in more detail:
1. Business Process Transformation
A significant focus of business activity has been on business processes. Data, analytics, APIs, machine learning, and other technologies offer businesses valuable new ways to reinvent processes throughout the corporation—with the goal of lowering costs, reducing cycle times, or increasing quality. Process transformation is evident everywhere. For example, we see process transformations in customer experience, where companies like Domino’s Pizza have completely re-imagined the food ordering process; Dominos’ AnyWare lets customers order from any device, including smartwatches, smart TV, Google Home, Alexa, Siri, voice orders, Google Assistant, Car, Slack, Messenger, etc. This innovation increased customer convenience so much that it helped push the company to overtake Pizza Hut in sales. Companies are also implementing technologies like robotic process automation to streamline back-office processes like accounting and legal, for example. Process transformation can create significant value and adopting technology in these areas is fast becoming table-stakes.
2. Business Model Transformation
Some companies are pursuing digital technologies to transform traditional business models. Whereas process transformation focuses on finite areas of the business, business model transformations are aimed at the fundamental building blocks of how value is delivered in the industry. Examples of this kind of innovation are well-known, from Netflix’s reinvention of video distribution to Apple’s reinvention of music delivery (iTunes) to Uber’s reinvention of the taxi industry. But this kind of transformation is occurring elsewhere. And, though not yet a reality, there are numerous efforts underway to transform the business of mining to a wholly robotic exercise, where no humans travel below the surface.
The complex and strategic nature of these opportunities requires involvement and leadership. Business units are often launched as separate initiatives while continuing to operate the traditional business. By changing the fundamental building blocks of value, corporations that achieve business model transformation open significant new opportunities for growth. More companies should pursue this path.
3. Business Domain Transformation
An area where we see surprisingly little focus — but enormous opportunity — is the area of domain transformation. New technologies are redefining products and services, blurring industry boundaries, and creating entirely new sets of non-traditional competitors. What many executives don’t appreciate is the very real opportunity for these new technologies to unlock wholly new businesses for their companies beyond currently served markets. And often, it is this type of transformation is that offers the greatest opportunities to create new value.
A clear example of how domain transformation works may be an online retailer, Amazon. Amazon expanded into a new market domain with the launch of Amazon Web Services (AWS), now the largest cloud computing/infrastructure service, in a domain formerly owned by the IT giants like Microsoft and IBM. The AWS business domain now represents nearly 60% % of Amazon’s annual profit.
It may be tempting for Executives of non-tech businesses to view the experience of Amazon or other digitally-native companies (such as Apple or Google that have also expanded into new domains) as special; their ability to acquire and leverage technology may be greater than other companies. But in today’s digital world, technology gaps are no longer a barrier. Any company can access and acquire the new technologies needed to unlock new growth—and do so cheaply and efficiently. The building block technologies that are unlocking new business domains (artificial intelligence, machine learning, internet of things (IoT), augmented reality, etc.) can be sourced today not only from the traditional IT supply-base like Microsoft or IBM but also from a growing startup ecosystem, where we see the greatest innovation taking place. Corporations that know how to reach and leverage this innovation efficiently, particularly from new sources, are reaping the benefits of new growth.
The lesson is to recognize the new domain opportunities afforded by new technologies and understand they can be captured—even by traditional incumbents. Because these opportunities involve re-defining business boundaries, pursuing these opportunities often involves Strategy and the CEO.
4. Cultural/Organizational Transformation
Full, long-term digital transformation requires redefining organizational mindsets, processes, and talent & capabilities for the digital world. Best-in-class corporations recognize digital requires agile workflows, a bias toward testing and learning, decentralized decision-making, and a greater reliance on business ecosystems. And they take active steps to bring change to their organizations.
As technology change increases, industries will continue to be forced to change. A business that regards and pursue digital transformation in a multi-dimensional way will find greater success than those that don’t.
Agweria Digital Transformation
The Agweria projects team has delivered Digital Transformation projects for different businesses from Healthcare, Insurance, Education, Finance and Banking, and Administrative fields. Agweria provides digital tools and software to automate your business process, expand your business presence, and achieve more. We help you grow your sales, reach more customers, improve business operations, and deliver value to your customers. Talk to us about your business and we will identify opportunities for you to explore and build a strategy to win the competition. Find out how we can transform your business.