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Transformation?
The words digital and digital transformation, have been trending very actively
and have become buzzwords of some sort. There is a need for some form of
structured understanding about this term and what it entails.
What is Digital?
Everyone is rushing to become digital and every CEO has a digital agenda that
he or she wants to push forth. Some believe digital is only about technology and
higher investments in technology. Some believe digital is about interacting and
engaging with consumers in different ways. And for some digital is finding a new
way of operating and conducting business. Having such varied perspectives is
causing leadership teams to lack a common vision. Due to such misalignment,
misplaced efforts are resulting in missed opportunities, poor performance
relative to competitors and loss of brand equity. Digital should be seen less as a
thing and more a way of doing things (Dorner and Edelman, 2015). This has
been further divided by Dorner and Edelman into three attributes creating
value in new areas of the business, creating value in customer experience
processes, and building capabilities that support the entire structure internally.
As we moved from the late 90s, the dot COM era towards the millennium and
now, to the digital age, the type of digital attributes changed as did their impact
on the economy. During the 90s, digital products such as music and video, and
infrastructure such as telecommunications and enterprise software had very
limited impact on the economy. In the 2000s, with the web and along with it ecommerce coming in, the impact increased with the dawn of virtual marketplaces
and all-pervasive retail. Finally in this current age, mobile, data analytics, social
and cloud are redefining the way companies do business and exposing
enterprises to a much wider array of opportunities and value.
Digital Transformation is evolving as a result of three causes mobility shift,
social networking and hyper-digitisation.
Mobility has caused a major shift in time and space for customer interaction via
smartphones with high-speed Internet connectivity, GPS targeting and
processors that can handle a variety of applications. As eMarketer reported,
more than a third of the worlds population, which amounts to 2.56 billion will be
on smartphones by 2018. The millennials segment of consumers, that is, 18-34
year olds exhibit the maximum propensity to spend their internet time on
mobile. This is further supported by a 90%+ penetration of smartphones within
this segment. Moreover, in every demographic, mobile is outpacing desktop in
digital media time spent. (comScore, 2015). All the aforementioned statistics
prove that mobile will be the primary source for digital consumption for this
generation and the next.
Social networking is scaling up rapidly with number of users reaching 2.44 billion
by 2018 (eMarketer, 2014). Below is a graphic depicting active users as of 1st
August 2015, to give a brief picture of number of users across various social
networking platforms. Facebook has about 1.5 billion active users, which is about
21% of the global population. With an unprecedented availability of real-time
information and by virtue of its instant shareability, an amplified network effect
has been created within which millions connect, interact and drive decisions a
critical factor for an enterprise, brand, product or service to consider.