Digital technologies are part of our daily lives. Smartphones, social networks, the Cloud, Big Data and the Internet of Things have dramatically changed each and every sector of the business world. Like a tidal wave sweeping over our economy, little by little since the 2000s half the Fortune 500 companies have been wiped off the list. For many companies founded prior to the digital era, digital transformation represents a real challenge, one that can only be met by reconsidering their very fundamentals.
Physical and virtual worlds coalesce
It's a fact. Digital is stepping up the pace of trade and strengthening what is now international competition, particularly with the arrival of the ‘born-digital’ newcomers. Traditional economic models are fast becoming obsolete, and the way in which companies interact with their customers, partners and employees has undergone a radical transformation in the wake of real-time and interactivity demands.
From data centers and mobile devices to physical environments, new approaches have evolved to provide a better customer experience. The emergence of these trends has seriously challenged traditional business relations, systems and processes; indeed it has rendered them completely obsolete.
It is fascinating to see just how much the line between the physical and digital world is blurring. The lack of distinction between these two worlds is forcing companies to redefine their business model. And this is the true challenge of the digital business: greater agility within innovation efforts, and a stronger desire to improve the customer experience.
This reconsideration is fundamental, for it is the only way for companies to meet, or indeed, exceed customer expectations. Technology has introduced and provided customers with access to all the new solutions and services. Everything is instantly within their reach, they can now buy anything they want, from anywhere and anyone. Their product and service reviews are published and shared straight away. ‘The age of the customer’ is truly upon us, and the power is no longer with the supplier, but with the consumer.
The value chain
The success of a business model now lies in companies' ability to connect easily to the people, processes and objects connected within the value chain.
This transition is often laborious, since organizations must begin by establishing digital connectivity channels and then build digital services before they can even focus on the digital experience.
Obviously, the task's complexity depends on the maturity of the company embarking on its digital transformation, as well as the state of its IT infrastructures and environments. However, three fundamental aspects must be considered to support the digital transformation:
Connectivity and digital channels: The volume of data now created and stored by companies has reached unprecedented levels. To fully exploit the potential of this trend and transform this data into useful information, companies must introduce digital business processes and connect the data flows of each silo, using integration technologies like APIs, secure data transfer (MTF) or EDI.
Digital services: Business service exposure and use via digital channels is broadening professional relations and offering customers greater added value. For example, by incorporating dozens of different applications (Uber, Yelp, etc.), Google Maps allows the co-creation of value between Google and its commercial partners. These services are far from being reserved exclusively for companies specialising in new technologies. These days all sectors can use API, from retail and finance to the hotel industry. This allows organisations to exploit their services in an innovative way, creating new revenue potential.
Digital experience: The set-up of a digital platform is essential to both the creation of new economic models and the success of a digital transformation. Banking services, for instance, have evolved dramatically, and customers can now consult their information on their mobiles and online and not just at their branch. Omnipresence is a strong customer experience.
Amazon is another excellent success story. Over the years, the company has developed new business models with the set-up of digital platforms. Previously limited to book sales, Amazon is now a Cloud giant, holding its own against the biggest IT companies.
Shrewd managers and directors who adopt these changes, allowing their organizations to capitalize on digital technologies are able to navigate this new environment quickly and successfully. It is a transition undertaken by a growing number of companies that can see the business potential heralded by the digital revolution.
Embrace digital transformation with confidence, not fear, and focus on what makes it possible.