Digital Disruption


Technology today is impacting business outcomes in a more fundamental way than ever before.

Progressive organizations the world over are leveraging digital technologies to not just improve IT efficiencies, but drive business transformation: to re-design customer experience, to develop new revenue streams, and even disrupt business models.

Research shows that organizations that are masters or leaders in the adoption of digital transformation are more profitable than their industry peers. They are also able to generate more revenue from their physical assets than their peers.

Digital transformation is moving more rapidly in some industries than others. For example, many firms in the high-tech industry are already digital leaders. Banking and retail industries are not far behind in adoption maturity. Consumer goods and manufacturing are relatively behind.

However, even in less digitally mature industries, business leaders cannot sit still and go slow on digital transformation.

Evolving Customer Expectations driving Transformation in the B2C sector

Customer expectations are increasing at an unprecedented rate. The new age digital leaders such as Amazon, Uber, AirBnB and thousands of emerging players around the world are setting the bar for customer experience.

For established, traditional companies, there is the ever-present danger that new born-digital startups may emerge and disrupt the traditional business model. Uberand Lyft internationally, Ola in India and Careemin the Gulf and many others around the world are disrupting the transportation industry.

Financial technology (Fintech) startups are rapidly disrupting the financial services industry. Alibaba’s financial services company was valued last year at the same level as the 300-year-old Barclays Bank.

Banks have been focusing on the mobile banking experience for a while now, and seeing increasing volume of transactions. Going beyond, many leading banks are investing in new Fintech startups to add innovative digital products to their portfolio. They are keen to digitally transform branches and fully integrate them into the omni-channel experience.

Traditional B2B Companies areGearing up for the Digital Economy

In many traditional B2B industries, new technologies and platforms are creating new value networks and solutions that were not possible earlier. Leveraging these, many established organizations are now taking digital transformation more seriously than ever before.

Manufacturing giant GE, for example, is transforming itself into a digital leader. It launched a software division and hired thousands of software engineers to and has developed an industrial internet platform. GE is today partnering with IT vendors such as Microsoft to accelerate digital transformation for industrial organizations.

IT Buying Shifting outside the IT Department

Given the business impact of digital transformation on the organization as a whole, decisions are now going beyond the purview of the CIO’s office. The CEO and other CxOsare getting involved. In fact, surveys show that across industries CEOs are increasingly placing digital transformation within their context of their corporate strategy.

IT Provider Strategies Changing

In this environment, leading IT vendors are transforming their portfolios and revamping sales and marketing strategies. Software vendors such as Oracle, SAP, Microsoft and others have now focused their portfolios on key technologies that drive digital transformation such as cloud, analytics and mobile. Infrastructure vendors such as Cisco are shifting focus to software defined products that support cloud and mobile environments and the emerging the Internet of Things.

Digital transformation is finding increasing adoption in the Middle East. The public sector has been at the forefront driven by smart city developments and citizen / resident e-services transformation but other sectors are rapidly catching up.

IT providers targeting this region will need to revisit their selling and delivery strategies in this environment. Business outcome-based solutions, based on industry-specific expertise and good practices, should form the core of the provider’s portfolio. Greater engagement with line of business CxOswill become essential. Providers will need to re-organise their portfolio around emerging technologies, align their sales and marketing communication, build new skills and adopt new performance metrics in this environment.

Ranjit Rajan compressed

Ranjit Rajan

Ranjit has been a part of the IT industry for nearly 20 years. He is currently a senior executive at the premier global technology analyst firm IDC. His views here are based on his personal views and experiences.

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