We are at the dawn of the next big emerging technology change where everything is increasingly interconnected in the digital economy – and where software is embedded in all facets of our lives. The technology metamorphosis of today is bringing new opportunities and threats to long-established companies, as innovative upstarts seek to disrupt industries and win market share.
These established firms realize they can no longer compete effectively unless complexity is reduced, operations are re-imagined and digitization is fully embraced across the enterprise. In our new digital economy, first-mover advantage is proving to be more critical than ever. Those who can most effectively re-imagine their offerings, business models, core processes and customer experiences have a clear opportunity to be market winners.
Digital Disruption is a Threat to Every Organization
Digital business is quickly blurring traditional industry boundaries. Think Hulu and Netflix to traditional TV. Or AirBnB to the travel space. Or Uber to the transport industry. New digital innovators can disrupt an entire industry, as they see the world through an entirely different lens. They are the ones that are your strategic threats, as they are likely to be very lean, agile and free of the legacy technology and processes that often curtail large, established enterprises.
The C-suite must revisit all major decisions about strategy, products, enterprise systems, operations and organizational structure while remaining even-keeled through market uncertainty, numerous strategic alternatives, and cultural resistance to the change.
Many long-established businesses are engaging with one-off digitalization activities and achieving some form of operational excellence within their business. Digitalization is an important enabler for any transformation, but it often focuses on existing processes and traditional business models.
For instance, a business would digitize their financial management business process in order to enable a predictive analytics-based financial planning and forecasting approach. However, when looking at the greater ecosystem of emerging digital technologies, one can see an opportunity that could dramatically increase organizational capabilities through data – be it in sheer volume of it, speed of processing or the way to make rapid decisions. As a result, new business models emerge.
Foundational Technologies Powered by Data
Today, data and analytics are foundational technologies to intelligent automation (IA) technologies. IA expands upon the original machine learning / artificial intelligence thinking to include robotic process automation (RPA), machine learning, cognitive automation and artificial intelligence.
A digitally transformed business is built on an emerging computing infrastructure of a digital core ERP system (e.g., SAP S/4HANA) – the foundation of mobile, cloud, big data/analytics, Internet of Things (IoT), and artificial intelligence. Those who are driving their complete digital transformation are taking the necessary risks to set themselves up for future competitive advantage, and even first-mover advantage in some industries.
Only an integrated and holistic approach to digital transformation can achieve maximum impact for an organization, and potentially enable it to disrupt the space they play in.
Challenges Facing Big Business
In our ongoing work with a number of top brands, some key challenges exist that are hindering progress forward in their digital transformation journey. This is natural, as it’s a highly complex (and costly) undertaking. To summarize, these include:
- How to Transform – Companies are still trying to improve digital operational excellence (lower cost, shorter time to market) in order to generate competitive advantages. Thus some are not yet ready for the next step: digital transformation to provide truly unique products and services.
- Navigating the Complexities – Digital transformation is a diverse topic with various technologies, business cases, investment plans and change programs. Hence some companies do not know how to best approach.
- Risk Aversion – Although most companies see the need to transform, they tend to be risk averse, afraid of making the wrong investments and alienating staff, to name a few.
- Corporate Culture – Mastering digital transformation requires agile processes, innovation, opening of processes, sharing information, and a trial-and-error culture. Some company environments are not yet configured to support this.
There are no easy answers to the above challenges. But rather a set of smart approaches to navigate each to start developing a holistic strategy to move forward with a transformation agenda. A number of enterprises we are engaged with are asking us to help them analyze these very topics – with the aim to become a leader in their space in the short- to mid-term.
With today’s transformative digital economy that we all work in, there is limitless opportunity ahead for those brave firms that embrace it.
Stay tuned for a future post where we will dissect these areas in greater detail, and offer a plan of attack for your business.
Partner, Enterprise Technology for Life Sciences
Alex joined Infosys Consulting in 2017 as a leader in our life sciences and enterprise products practices and brings over 28 years of experience as a digital strategy and business transformation leader. He is seen as an entrepreneurial visionary in the emerging technology space, having significant expertise on topics ranging from SAP Leonardo, big data/analytics and the internet of things to social media, cyber security and AI/automation. Alex has worked across industries, but has gravitated towards the life sciences space where he has focused mainly for the past 20 years.
Alex has a Bachelor of Science degree in Management Information Systems from The Pennsylvania State University, an MBA from Saint Joseph’s University and participated in several advanced graduate programs at Duke University and the Wharton School of Business.