Stuart Mills helps you and your business prepare for current and emerging trends in technology.
We are well into the Third Industrial Revolution, better known as the Digital Revolution. Since the latter-20th century, when digital computing and digital record-keeping began to proliferate, business has been irreversibly transformed by digital technology.
Just about every organisation today is affected by this trend and the resulting digital transformation that is infusing all areas of business. Every company from the local grocer to hospitals and financial organisations is a technology-based enterprise today. Digital technology is the lifeblood of business today.
The knock-on effect of this trend for organisations that use digital technology for any purpose is that competitive advantage now depends on how digital infrastructure is used, and how the massive amount of data flowing across it is manipulated.
Almost half a century after digital technology made its first forays into the world of business, digital technology in business is growing at an unprecedented rate. Research suggests that 50 per cent of businesses intend to be a digital business within two years, and 83 per cent in three to five years. By 2020, 75 per cent of businesses are expected to become, or prepare to become, a digital business.
The Predicted World of Digital Business
50 per cent of businesses intend to be a digital business within two years.
83 per cent of businesses intend to be a digital business in three to five years.
By 2020, 75 per cent of businesses are expected to become, or prepare to become, a digital business.
The Digital Transformation in Australia
In Australia, the national broadband network rollout is expected to facilitate the proliferation of digital technology in business. This will result in more small and agile businesses operated by young entrepreneurs. Big business dominated in the second half of the 20th century, but according to KPMG Demographics, the first-half of the 21st century will see the rise of small technology based businesses.
Connectivity and digital technology are combining to become the single greatest common factor that will influence future businesses and future jobs. Digital disruption as a whole, combined with universal connectivity, will help to create new business models for existing industries, new sectors, and new jobs.
Digital technology and the improved connectivity delivered by broadband networks is already augmenting and altering how and where work is undertaken. Thanks to this increased connectivity people can work more flexibly, from a greater number of places, and using their own devices. This is increasingly affecting what kind of work is done by Australian businesses and employees.
The current changes to industry and business effected by the worldwide proliferation of digital technology is part of a continuing overall trend. It is transforming business so fast that it can be daunting for organisations and individuals to manage. As such, workforces need to develop an attitudinal shift that comes with digital disruption. Specifically, they must remain open to, and accepting of, change in order to identify new business and work opportunities.
A major part of this approach is to understand early on how new and emerging technology can benefit a company rather than how it might negatively impact its existing business model. Clearly, an attitudinal shift of this magnitude is likely to result in adaptation pressures and stress for organisations and individuals alike. However, the benefits of facing that pressure head-on far outweigh the drawbacks of shying away from change.
It can be challenging or downright impossible for organisations to keep track of all emerging technology and how it is likely to benefit their business. However, there are some specific key technological advances that all companies should be aware of if they want to embrace disruptive change rather than run away from it.
According to market analysis firm IDC 2015 is a year of accelerating disruption, based on broadening adoption of so-called ‘Third Platform’ technologies such as cloud, mobile, social, big data, and Internet of Things (IoT).
IDC believes that this year will mark the Third Platform’s shift to the ‘innovation stage’, with an explosion of innovation and value creation on top of the Third Platform’s foundation. This is likely to come in the form of a new generation of outsourced services with new capabilities.
Many organisations have already seen the value in these emerging services. In fact, so popular are the existing solutions built on Third Platform technologies, that such solutions are forecast to account for one-third of all IT spending and 100 per cent of IT growth in 2015.
Due to the rise of such technology, Gartner has outlined the top industry trends it expects to see businesses deal with this year; These include increased agility, mobility, digital business jobs, and customer experience investments.
Of potential concern for many organisations, particularly those grounded in a traditional model is Gartner’s prediction that by 2027, 70 per cent of successful digital business models will rely on deliberately unstable processes designed to shift as customer needs shift. By the end of 2015, Gartner expects five per cent of global organisations to have designed so-called ‘supermanoeuvrable’ processes that provide a competitive advantage.
Perhaps the most welcome Gartner prediction for businesses is that by 2018, the total cost of ownership for business operators will be reduced by 30 per cent through smart machines and industrialised services. Smart machines will not replace labour, suggests Gartner, but they will displace complacency and inefficiency, adding velocity to business operations.
The Digital Technology Driving Business Transformation
The changes that have already come and those that are yet to hit may seem overwhelming for many organisations. However, they present enormous opportunities for those who are prepared to accept them and use them to transform their businesses for commercial success. As new businesses look towards emerging technology to jumpstart their own business models, established organisations can transform themselves with the same technology.
While businesses wanting to recreate themselves can leverage specific technology solutions, it is important to remember that transformation implies more than just process changes or a shift from one tool to another: it represents a complete metamorphosis across whole industries, companies, departments, or people.
For example, 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 transformation also has the power to accomplish a dramatic change in an organisation’s market standing or brand association. Just look at technology powerhouse, Nokia, which began life as a Finnish pulp mill. With digital technology driving the business, a company can move faster, serve customers in new ways, and create new opportunities for growth and innovation.
Given what digital infrastructure is now capable of, industry is moving well beyond the mere automation of certain tasks or the streamlining of others. It is resulting in the complete overhaul of existing business models, and the development of entirely new business models through digital innovation.
For example, in the retail industry, mobility has, for some time, facilitated the potential for new offerings to customers in the store through brand messaging and sales information delivered via Wi-Fi. However, mobility is also becoming a tool to encourage customers to enter the store and understand what they are shopping for.
Likewise, for medical practices, electronic medical records (EMRs) have become part of patient diagnosis and are the foundation for coordinating care across the practice. For media companies, the number of screens on which to display content is seemingly endless, giving rise to a plethora of new ways to monetise content.
Trade-offs still exist, though. In today’s organisations, back-end infrastructure and customer-facing services compete for the same limited investment funds. New ideas for services or expansion plans can be shelved because of the cost of the related infrastructure.
However, many new and existing digital business solutions, such as cloud architecture, datacentre infrastructure, and information security are now being delivered externally as a service. This means that businesses of all sizes can make use of the latest technology without having the burden of the prohibitive capital expenditure such solutions would incur to implement internally.
Digital transformation, therefore, is also about choosing on what to focus limited capital and resources and choosing what to outsource. By outsourcing some or all infrastructure needs, organisations can quickly free up resources to focus on creating innovative new kinds of value for customers and drive efficiencies for all stakeholders.
Stuart Mills is the Regional Director for Australia and New Zealand at CenturyLink. Stuart is a recognised IT professional, with over 23 years of experience in sales, strategy, and services. He is responsible for the growth and success of CenturyLink in ANZ and will be leading the introduction of CenturyLink’s managed hybrid IT services in the Australian market.