Trend #1: Digital and Digitization
Digitization has certainly come beyond buzzword, though there is still a lot of debate and thoughts on leveraging digital technologies. IT executives and leaders have been living through waves of automation, updates in usability, user self-service, web and mobile enablement and eCommerce.
“Digital” and “Digital Transformation” has caught the attention of senior executives across a wide spectrum of industries, thanks in part to global forums like the Davos World Economic Forum (ref: Davos 2016 – The Digital Transformation of Industries) where it was the key theme in 2016. Enterprises large and small continue their digitization journey. Some of us muse if Digitization is perhaps an uber term used as a combination of some of these: taking the view “Isn’t “Digital” just IT done the right way?” Of course, “Digital” isn’t just IT done the right way ! (link)In many organizations, realizing the promise of digitization is really a challenge of system integration, and visualizing how technologies work in cohesion.
Image* credit:Bill Sargent
Digitization in corporate world
Digital, Digitization and “Digital Transformation” has caught the attention of senior executives across a wide spectrum of industries, thanks in part to global forums like WEF (link) where it was the key theme in 2016. Some executives are concerned by the disruptive potential of digital technologies, especially when leveraged with Social, Mobile, Analytics and Cloud (SMAC) strategies. Frequent news articles hyping up potential of digital disruptors like Uber, Airbnb and the continued growth of social media giants like Facebook, Twitter and LinkedIn help fuel a sense of urgency to react too. There is also prognosis from experts (link) with a call to action:
“The Fourth Industrial Revolution builds on the Third Industrial Revolution, also known as the Digital Revolution, which entailed the proliferation of computers and the automation of record keeping; but the new wave of transformation differs from its predecessors in a few key ways.”
Many organizations continue to define their “Corporate Digital” strategies; some insights come from peers in the industry, while much of it is defined in reaction to competitive forces. While IT executives and CIOs are, perhaps rightly, being tasked with enabling digital strategies, most of the execution in the corporate world is focused on specific user stories that are providing tangible benefits and making headlines – medical insurance companies goading consumers towards video-chat with doctors, auto insurers offering “usage-based insurance” by leveraging analytics of data from devices used on cars by drivers, banks working to minimize foot-traffic at branches etc etc.
Executing a Digital Strategy also requires working through fundamental challenges of executing IT transformations: More than a few organizations also struggle to enable comprehensive eCommerce solutions (link) or design for responsiveness in social media (link) that consumers have come to expect.
Why should corporate executives pay attention to Digitization?
- Corporate executives need to continually explore opportunities to engage business stakeholders, and design “digital services” for their customers. Novel digital use cases include that of a medical Insurance company offering “virtual doctor visit” (to minimize cost of doctor visits), a bank enabling digital deposit tools to minimize the need for customers to visit a branch etc.
- Startups continue to innovate in domain specific areas, some of which can be leveraged by larger enterprises
- Need to continually evaluate the impact of new and emerging digital business models like the sharing economy – uber, airBnb etc – and what it could mean to your business
Digitization and the consumer expectations
While trying to execute on a digital strategy, it is worth wearing the hat of a consumer: After I request a taxi on my Ola App, I get a confirmation with details of my driver, type/color/plate of the car and likewise, my details shared with the driver. Same goes for a tweet to my Airline asking for a special meal on my booking; or a comment I post on a corporate page of Facebook or LinkedIn. The impatient consumer in me expects an almost instantaneous “human like” response; like when I am in front of a ticketing agent or on a call with a customer representative.
Getting a quick digital-response releases the right bit of dopamine, cementing a closer relationship with the brand. Not getting an agile response does the opposite. While the dopamine effect of social media is a hot topic of research among psychologists (link), corporate designers must take note. Not receiving a tweet from my airline confirming my special meal request is not a mere annoyance, but rather an act that may make me reconsider that airline during a travel future booking.
A tremendous amount of effort in realizing a digital strategy, including automation, workflow with the right intelligence built in, integration of back-end systems and processes might fall flat if the weakest link – and perhaps the ultimate proof of strategy realization – the human element is missing.
Digital Startup Solutions in the news
- Digitization in Food Industry –General Mills taps into the ingenuity of startup companies – One year ago, the leaders at General Mills had a revelation: It couldn’t keep up. Specifically, the food giant was struggling to develop new, creative products at the pace of innovation that is required in today’s ever-changing food industry. – Minneapolis Star Tribune/TNS
- Digitiaztion in Insurance – Most insurers will partner with or acquire insurance technology startups to secure their competitive positions in the next two years, according to Gartner – Insurance sector CIOs need to expand their market insight concerning the innovation and disruption potential of insurance technology startups (insurtechs) to complement their digital insurance strategies, according to Gartners. According to Gartner research, 64 percent of the world’s 25 largest insurance companies have already invested directly or indirectly via their venture capital arms in insurtech startups. (Economic Times)
- Supply Chain – Ex-Amazonian’s stealth startup gets $2 mn seed funding to disrupt logistics – Leading VC firms Kalaari Capital and Norwest Venture Partners have quietly made a US$2 million seed investment in a startup in stealth mode, according to Termsheet, an online platform for angel investing. The deal was done in May, but not publicized so far.
- To beef up in marketing, Salesforce will buy Krux for $340M in cash, up to $750M overall – Salesforce is making yet another acquisition, once again to build out its footprint in marketing and adtech. The company has just confirmed that it is buying Krux, a company that tracks traffic (“data signatures”) across multiple devices — e.g. desktop, mobile, tablet, set-top — and channels — display, social, search, video. In a statement to the SEC, Salesforce said it would pay $340 million in cash plus stock. A story giving a heads up on the sale in AdExchanger said the actual price would be between $650 million and $750 million — which appears also to include earn-outs and the value of that stock. Salesforce tells us “approximately $700 million.” (TechCrunch)
- IBM sharpens focus of start-up outreach – IT major IBM is sharpening the focus of its SmartCamp outreach programme for the start-up ecosystem — from an across-the-board approach to one that makes it industry specific. “From this year, we started adding an industry focus… will continue looking at industry segments as the start-up space is ever evolving,” said Seema Kumar, country manager-ecosystem development, IBM India and South Asia. (The Hindu)
- Meet the 27-Year-Old Founder Building the Future of E-Commerce – Alex Adelman is figuring things out in a hurry. In a few short years, the 27-year-old founder of Cosmic has built a potentially game-changing e-commerce company, made Target its retail partner, and sold it to lifestyle media company PopSugar Inc. (Fortune.com)
- A report by the McKinsey Global Institute estimates that by 2025, digitization could add up to $2.2 trillion to annual U.S. GDP by 2025
Compiled and Edited by: Mohan K || Click on the links above for more details, examples of other businesses that have succeeded in the space. us if you have a startup story you wish to feature
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