We have entered the Third Industrial Revolution, where competitive advantage depends on how we use digital infrastructure and the massive amounts of data flowing across it. Digital transformations are all around us.
Every company, from the local grocer to hospitals and financial organisations, is a technology-based enterprise today. Digital technology is the lifeblood of the organisation.
Digital business is growing. Research indicates that 50 per cent of businesses intend to be a digital business in 24 months, and 83 per cent in three to five years, which will result in high stresses on individuals in organisations.
By 2020, 75 per cent of businesses are expected to become, or prepare to become, a digital business.
“It’s a creative time for businesses, large and small,” says Stuart Mills, regional director, ANZ, CenturyLink. “New firms can rely on pre-existing digital infrastructure to jumpstart their own business models.
“Established firms can remake themselves. What was once a tangible product is now delivered as a service with a new cost structure and no expiration date.”
For Mills, transformation implies more than just process change or a shift from one tool to another - it represents a complete metamorphosis across whole industries, companies, departments or people.
A business unit is transformed when its evolution is so great that it no longer resembles its former self, this could involve the overhaul of internal infrastructure, or the addition of a variety of new outsourced services taken on with the help of a managed hybrid IT provider.
“Digital transformations accomplish the most dramatic change in status for businesses,” Mills adds. “With digital technology driving the business, you can move faster, serve customers in new ways, and create new opportunities for growth and innovation.
“We have moved well beyond automating tasks when considering what digital infrastructure can accomplish. Today, we are innovating entirely new business models.”
For example, Mills believes in the retail industry Wi-Fi is just part of the offering to customers in the store.
But Wi-Fi is also a way to encourage customers to enter the store, understand what they are shopping for and show them the range of goods on offer.
For medical practices, electronic medical records (EMR) are now part of patient diagnosis and the foundation for coordinating care across the practice. For media companies, the number of screens on which to display content is seemingly endless.
“Trade-offs still exist, though. In today’s organisations, back-end infrastructure and customer-facing services compete for the same limited investment funds,” Mills adds.
“New ideas for services or expansion plans can be shelved because of the cost of the related infrastructure.
“Digital transformations, therefore, are also about choosing what to focus limited capital and resources on, and choosing what to outsource.
“By outsourcing some or all infrastructure needs, organisations can free up resources to focus on creating innovative new kinds of value for customers and drive efficiencies for all stakeholders.”