We’ve all heard about the buzzwords digital transformation and digital disruption but what does it actually mean.
Well digital transformation is not necessarily about digital technology itself. But about the power the technology has to create opportunities and ways to do things that were previously unthinkable.
All those digital things make it possible to solve traditional, day-to-day problems and to create massive opportunities to develop products, services and businesses.
If we can manage to use the digital power in a positive way, it will create enormous future value. Not just in revenue and profit, but it might also prove to create solutions to the major challenges we are facing.
We know, it can be a little bit intimidating, trying to understand how all these digital things are happening but once you do, you might become more optimistic than ever because we are literally living through the biggest cultural shift in human history.
The waves of Digital Transformation
The Internet is 25 years old and what we’re seeing now are just the first eruptions of what digital is capable of achieving. Everything around is increasingly getting interconnected and digitalised, our cars, washing machines, televisions, toothbrushes, etc. You name it, and there will be bits and bytes involved. Some of these new innovations will fail, but it’s clear that we have set course to a fully digital destination.
In case you still doubt that digital has the power to transform or even destroy entire industries, just look around. We’ve all seen how disruptive digital was for the music-, photography- and video rental industry. Consider this the first wave, one that serves as an example to all of us.
As technology advanced and continues to advance, more industries are beginning to notice the true impact of digital. We believe that the next wave is already upon us, as new players are currently taking over other industries. Think about how the TV, Newsmedia, Recruitment and Travel industries are getting disrupted by players like Netflix, LinkedIn, Uber, Airbnb, Booking.com and all the countless new platforms. This is the second wave.
And it doesn’t stop here. Think about the future of retail, about the increasing demand for transparency in healthcare and things Bitcoin, Tesla… Technology made this and many more things possible. But what will happen in the next 5 years and beyond? These and many other industries will be subject to change in the third wave.
The Infinite Loop of Transformation
The digital age is way more challenging than ever before. The rise of the Internet creates more competition and more demanding customers. Traditional businesses need to transform themselves in order to keep up with the digital disruption. They can do this by adapting their strategies via the so-called ‘Infinite Loop of Transformation’.
This loop contains 3 different phases. First, The Disruption phase is about experiencing and acknowledging the severe impact of new players and/or technological evolutions on the core business activities. Afterwards, The Modeling phase, applies to mapping out the impact of the disruption and trying to transform possible digital threats into digital opportunities for the future. The last one is the Transformation phase. Which involves implementing the digital transformation model throughout the entire business processes, culture and systems.
Digital closes doors in industries, but it also opens up countless new opportunities. The best strategy to adopt new technologies is diving right into them. Be aware of what’s happening in front of your eyes. In the digital world that means using new tools as soon as they’re released, subscribing to new networks that get attention, downloading mobile apps that get traction, following startups that have potential to disrupt your business.
You might suggest that once you face the disruption and transformed your business the job is done. Unfortunately, this won’t be the case. Transformation has become a situation without an end-state, because disruption will be knocking on your door forever. Good luck with that!
If you want more insights on digital transformation and how to master the disruption, check out our digital transformation book.Click here to order Digital Transformation book