Technology-led products, services and business models are disrupting industries and altering business functions.
Innovative Technology companies like WhatsApp and Skype have shaved off nearly $386 billion of income from global telecom companies like China Telecom, Vodafone, Ettel etc. All between 2012 and 2018. The financial services have been transformed by technology companies like PayPal, Flutterwave, Paystack, Chippier, etc.
But What is Digital Transformation?
- It is about IT-enabled business models and capabilities and how you can leverage them to drive competitive advantage.
- It is the incorporation of technology into all areas of a business, on a very basic level changing how you work and deliver value to your customers. It is also a change in your business culture in such a way that innovation, experimentation and out of the box thinking becomes commonplace. Digital Transformation also allows you to get comfortable with failure/disappointments.
As General Electric CEO, Jeffrey Immelt noted in his letters to shareholders in 2013, every industrial company will become a software company. And that the vision of firms requires a shift in thinking about IT, and it requires a transformation of the IT function.
I stumbled on the term “Disruptive Innovation” sometime back, and it altered my perspective on innovation.
Disruptive innovation has been trending since Clayton Christensen coined it back in the mid-1990s to describe the way in which new entrants in a market can disrupt established businesses. It’s gained even more prominence in the past two decades as companies like Uber, Lyft, Etsy, Netflix, and countless other startups have emerged with a goal of changing their respective industries.
WHAT IS DISRUPTIVE INNOVATION?
- Incumbent businesses innovate and develop their products or services in order to appeal to their most demanding and/or profitable customers, ignoring the needs of those downmarket.
- Entrants target this ignored market segment and gain traction by meeting their needs at a reduced cost compared to what is offered by the incumbent.
- Incumbents don’t respond to the new entrant, continuing to focus on their more profitable segments.
- Entrants eventually move upmarket by offering solutions that appeal to the incumbent’s “mainstream” customers.
- Once the new entrant has begun to attract the incumbent business’s mainstream customers en masse, disruption has occurred.
In Summary, I think Digital Transformation is not a technology problem, in as much as by definition it is directly tied to the integration of technology as the centre stage of business model innovation, operations and customer service delivery. Digital Transformation is a leadership problem.
It needs to start with an intention.
- What do you need Digital Transformation in your enterprise for?
- Will it contribute to the business growth and execution of your business strategy.
Before you go on a wild chase of Digital Transformation because it is trending, take time to do a digital audit, develop a digital strategy and a process of execution.
That is where I come in. I can help you develop a robust Digital Audit with recommendations. Biased but recommendations that will help your business achieve its goals and ambitions. Find out more here: https://www.bloopglobal.com/transformation