Digital transformation — using technology to radically improve performance or reach of enterprises — is becoming a prime topic for companies across the globe.
CEOs no longer think only digital start-ups or high-tech darlings like Amazon, Apple or Google can use digital transformation. Executives in all industries are seeking ways to use digital advances to change customer relationships, internal processes and even business models. Other executives, seeing how fast digital technology disrupted media industries in the past decade, know they need to pay attention to changes in their industries now.
The MIT Center for Digital Business and Capgemini Consulting set out to investigate the ways in which large traditional companies around the world are managing – and benefiting from — digital transformation. They are working to understand how digital technology is changing the business of large companies. Their first report, Digital Transformation: A Roadmap for Billion Dollar Companies was recently recognized as one of the best examples of thought leadership over the past decade.
What technologies spur digital transformation? The authors of the MIT Center for Digital Business/Capgemini Consulting report identify four emerging technologies companies can use to completely rework their customer interaction, their operations and their business models:
- social media;
- embedded devices, or smart RFID tags.
You can call them the SAME gang or skip the cute acronym, but these four technologies form the core of what companies are using to create digital transformation. These technologies build on previous investments in enterprise technology. For instance, companies will have a harder time gaining transformative insights through analytics if they have a poorly implemented ERP system. The new technologies also take advantage of emerging infrastructure technologies like the cloud.
How can senior executives successfully lead digital transformation? While many experts urge companies to get started on the digital transformation journey, few tell how to do it. The examples they do give tend to revolve around young companies that exist because of technology, like Apple and Amazon. Executives in traditional companies often find these examples hollow. Big traditional companies, with decades of history and legacy, are simply different from these newer digital entrants.