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> White Paper | Best Practices in Digital Transformation
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‘Digital Transformation’
No two definitions of ‘digital transformation’ are quite the same but
most definitions share the following elements:
• It is a process involving change.
• The type of change is usually underwritten as profound or new
– it is a new way of doing things not just a tinkering with the way
things have been done before.
• It involves the deployment and application of digital
technologies.
• The impact will be felt increasingly across business and society
more generally.
While the term is understood, it is considered open-ended. This
perception is caused by the huge perceived scope of digital
transformation:
“If it’s done properly, it’s everything. It’s almost like you are handing
over control of the company”. [Business Services]
“If you look at Uber, Amazon, Facebook, they seemed to come from
nowhere and build vast empires. They are basically IT companies
that have extended into areas of necessity and taken it over.”
[Personal Services]
Digital transformation is considered to be (among other adjectives
used) inevitable, enabling of opportunity, huge, far reaching, risky,
unpredictable, high impact, step-by-step, never ending, transitional,
progressive. These adjectives indicate positive, neutral and some
negative sentiment and a high level of caution.
It is considered also a catch-all term for a number of dierent
components and activities – most mentioned are big data, IoT, AI,
machine learning, virtual reality and augmented reality. It is seen
as a combination of some or all of these activities in combination,
and finding the right balance between them is seen as a major
challenge. Since digital transformation is such as considerable
activity, questions are raised as to how far it can be measured so
progress can be ascertained.
The reasons for pursuing digital transformation in an MTDC
environment embrace two main drivers:
• As a means of running the MTDC whether as a single facility or
across a number of facilities. Given the commercial vulnerability
of some of these organisations and the need to balance costs/
resources against revenues, a digital strategy is seen to improve
all cost elements, improve eciency and compliance. Mention
is made in this context of Google’s use of algorithms to improve
operational eciency. Thus, digital transformation is seen to
have internal value.
• As the reason for generating a series of services that might
be developed and leased/oered to clients who need the
processing power and connectivity of an MTDC to formulate
their own approach towards big data, IoT or other elements of
digital transformation. These include the components outlined
above in the way an enterprise organisation might approach
digital transformation.
“They come to us for what I’d call heavy data processing where they
need to connect with cloud infrastructure to augment their internal
processing capacity. They can get this capacity in a highly elastic
environment much more economically from us.” [IT Services]
“Everything is really up in the air as I look at what we do here and
think that it may all get disrupted. It pushes us to change the way
we do our business, interact with our customers, learn about them,
everything. Or is it just a tech sales gimmick? But I doubt that”.
[Business Services]
“One of our key market dierentiators is technology. We sell our
services as an alternative to in-house fulfilment of logistics services
and their oering is based largely around the eciencies that smart
technology can bring to the process.” [Business Services]
Analysts and MTDCs agree that the path to digital transformation
enhances the nature and purpose of the MTDC provider:
• Data becomes central to the organisation. A recent DCD study
around Industry 4.0 indicates that data is now more valuable to
manufacturing and process industries than any other resource.
• Through the process, all companies become de facto
technology companies.
• That while the emphasis is on the deployment of technologies,
the strategies for this are based clearly on the business
requirements such deployments are intended to meet. This is not
technology for technology’s sake.
Figures quoted for the progression of digital transformation are
emphatic. According to Gartner, 80% of the business sectors of
enterprise will participate in IT construction. The proportion of
the CIO budget spent on digitalization will rise to 28% by 2018.
By next year, two-thirds of the CEOs of Global 2000 enterprises
will have digital transformation at the core of their corporate
strategy. A KMPG study of 2016 (“The disruptors are the disrupted”)
indicates that 67% of tech leaders surveyed believe that disruptive
technologies are having a positive impact on their company’s
performance. Again there is a proviso – less than one-third of these
technology companies are very prepared for disruptive technology.
By 2021, the global digital transformation market will be worth an
estimated USD 392 billion and by 2020 they have the potential
to add as much as USD 1.36 trillion to the GDP of the world’s top
10 economies. According to IDC, the worldwide market for IoT
solutions will grow to USD 7.1 trillion by 2020. u