Call it a trend or a fad, digital transformation is happening and is transforming the way businesses are done. Many companies, including Volkswagen, Dominos, and Target, have invested in digital transformation resulting in increased revenue.
In today’s business climate, this “luxury” is no longer an option. In fact. In the digital age where “data is the new oil.” They both generate substantial wealth and power global economies, but one crucial way in which they differ is their longevity. Oil is a finite fossil fuel, meaning it will come to an end at some point. Data, by contrast, is infinite. Just take this example: within the next couple of years, 40 zettabytes of new information will be created, translating to four million years of HD video.
So, then, it’s a no-brainer that CEOs must make significant investments in digital transformation. Indeed, it’s a strategic imperative for any business that wants to surge ahead rather than just limp along. Digital resources are taking on a new importance, making them serious contenders as asset classes that are well worth the investment. The big challenge, then, is to blend the strengths of the old with the opportunities of the new, requiring tech-savvy CIOs to dive into and own the data themselves to interpret, analyze and align.
A Climate of Exponential Digital Growth
Think the Industrial Revolution was a frenzied pace of advancements and breakthroughs? Well, it was – then. But it pales in comparison to the exponential pace of digital transformation now. The next decade alone will bring furious growth into many sectors, from 3D printing and neuroscience to digital telepresence and cryptocurrency. Therefore, it’s not really a choice to embrace technology enablement; rather, it’s mission-critical to the survival of every company. CIOs and CEOs don’t necessarily have to be tech experts themselves; however, they must have a clear appreciation of how technological advancements will redefine their business models, operational processes and customer experience engagement.
How Industries are Evolving
From retail and banking to media and healthcare, new technologies are injecting themselves into all sectors – in many cases, pushing out traditional companies through the leveraging of digital advancements. There is no more room for ignorance. Just look at the Blockbusters and Borders of the world that failed to migrate into new territory as smoothly as icons like Netflix, Amazon, Google, Airbnb and Zappos.
So, what are these relatively new entrants into traditional industries doing right? They have been able to build market share fast by:
- Offering more enjoyable customer experiences, backed by engagement models supported by evolving technologies
- Delivering service at a much lower cost
- Instituting return policies that take everything back, no questions asked
- Offering superior products or services as compared to traditional players
- Providing stellar ROI for shareholders and investors
Social media…data analytics…the internet of things and gamification: the technology spurring on these areas can no longer be ignored by large companies and how they approach data, security and new business models. The truth is, companies don’t fail because they don’t want to advance right alongside technology. They fail because they don’t understand the technology. Surveys have shown that boards believe technology is imperative to the survival of a business, yet a deficiency in properly skilled executives at the CEO level was seriously lacking to leverage technology advancements for business growth.
As such, executives at the board level should be seeking growth through embracing technology advancements by:
- Improving their understanding of disruptive technology trends
- Boosting board and senior executive level awareness
- Taking on an agile approach to technology-enabled innovation
- Emphasizing technology-enabled business growth and transformation as a top corporate initiative
- Getting more aggressive when it comes to risk-taking
- Appointing the CIO or other technology leader as a member of the senior executive team
- Leading through example in the adoption of new innovations
Agility and fast action is one of the cornerstones of success. Many people assume the magic comes from the data itself; however, so many companies fall victim to what’s called “analysis paralysis,” where they are aware of the technology but get stuck in a loop of analyzing the data. As a result, they become stagnant – the death knell of a company that has missed the bus on enterprise agility. Striking quickly is the key to digital transformation investment that works.