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Change is inevitable. Fewer sayings summarise the state of existence so eloquently or succinctly. Fearing it, though, is a fruitless endeavour. Those that are able to embrace change and identify the opportunities it brings are typically those that succeed – and businesses are no different.
Technology – business-centric tech, in particular – changes frequently. New products and services are launched regularly, each promising to yield positive change in some way, shape or form. Consider various statistics relating to these tools and it becomes clear that these vows are not lacking in merit.
In 2018, 25 billion gigabytes of data – much of it containing valuable insights – was created.1 The machine learning market grows at an astonishing 20% annually2 and polls conducted by MIT revealed that 84% of business leaders believe that AI and automation provide them with a significant advantage over their competitors.3 A further study, undertaken by marketing and advertising agency Spiceworks, also revealed that 89% of businesses predict they will spend more on their IT infrastructures over the coming year.4
Organisations, then, are fully aware of the fact that tech can fuel growth. They are also happy to invest in new technology. In spite of this, though, only 27% believe that a digital transformation strategy is vital to their business. This is akin to acknowledging that your car’s engine is vital to its health and performance, but does not need to be serviced or maintained. Simply recognising that technology is important – that it is worthy of investment – is insufficient. It is unlikely to result in stability, let alone progress.
Determining precisely how technology can bring about significant and truly meaningful positive change to a business is dependent upon analysis, consideration and, vitally, effort. A comprehensive understanding of a business’s current and desired position, its practices and models must be blended with a nuanced understanding of existing platforms, their functions and capabilities as well as market deficiencies and trends. In short, a detailed and complex strategy – a digital transformation strategy – is required.
Anyone unconvinced of the potentially transformative effect a considered and sophisticated digital transformation strategy can have on businesses and industries only need be presented with a handful of examples to be persuaded otherwise.
Uber have, in a remarkably short amount of time, grown into one of the world’s most recognisable companies. Attaining more than $11 billion in global turnover in 2018, the company recognised weaknesses in an existing sector and identified how they could use technology to address them. This was followed by the formulation of an innovative business model – again leveraging technology – that allowed them to offer services without purchasing resources (vehicles). The end result: the world’s largest taxi company owning no taxis.
Famously Airbnb was setup by two friends whose only asset happened to be an air mattress. Like Uber, it identified a market (people looking to rent out properties for short periods of time) and developed a platform through which this sector could reach their customer base. Their strategy – nuanced enough to deliver substantial traffic to their website – has paid dividends and Airbnb is now valued at more than $25 billion.
Streaming services, fintech companies and software vendors provide further examples of how digital transformation strategies that consider markets, objectives, limitations and execution can fundamentally transform businesses.
Digital transformation is, in the simplest possible terms, utilising digital technology as a means of improving organisational performance – and its successful implementation is entirely reliant upon highly developed strategies.