As a CIO in the automotive industry, I am often asked, “What’s the difference between digitalization and automation? Isn’t the hoopla about going digital just old wine in a new bottle?” After all, the auto industry is no stranger to automation – assembly lines and robots that require little or no human intervention have been standard features in our business for a while now.
In reality, there’s a world of difference between IT automation and the wave of digitalization sweeping the globe today. Here are six critical dimensions, in my view, that differentiate automation from digitalization:
- The democratization of sensors: Traditionally, IT embedded sensors into equipment and machinery to create PLC-enabled automation of manufacturing lines. But in today’s digitally connected world, almost anything around us can be. Sensors are cheaper than ever as they move from factories and robotic lines to everyday objects, creating entirely new value propositions unleashed by the reimagination of the purpose of things. We have smartphones that function with over 15 sensors. Smart coffee mugs that report daily calories, sugar, and liquid intake. Even a smart basketball that can improve a player’s skills and drills. And these are just a few examples of sensors creating value by making things smarter.
- Personalization driven by Big Data analytics: Analytics is not a new science. In fact, IT has always handled and deciphered large amounts of business data to deliver reports and insights. But thanks to Big Data that can leverage large and multiple sources of data – both structured and unstructured – today we have contextual insights to radically personalize the customer experience. Take, for example, the enormous amount of personalization online shoppers benefit from because marketers are analyzing clickstreams on browsers and mobile apps, location data, sensor data, social media profiles, and interactions to generate those “Wow!” moments.
- Mobile solutions that are changing our lives forever: Never before have users enjoyed such an intuitive, functional, and technically comprehensive device. Our desktops and laptops cannot compare to mobile in terms of technology, content, or user experience. Just consider how GPS and location-enabled services have enabled a compelling customer use-case scenario. Mobile devices and solutions allow today’s IT teams to deliver anytime, anywhere connectivity – something unimaginable only a few years ago.
- The infinite computing power of the cloud: Classic IT system delivery was time-consuming and primarily constrained by large infrastructure BOMs, software licenses, and high upfront costs. In the digital age, the cloud has created infinite computing resources at the disposal of users on a pay-per-use basis. This has resulted in software-as-a-service (SaaS) solutions for practically any process, platform-as-a-service (PaaS) development platforms, and virtual servers running on demand softwares – all available on an as-needed basis. Cloud solutions have allowed IT teams to speedily apply infinite hardware and software resources to satisfy business demands seamlessly.
- Cost of experimentation: Historically, the IT organization developed solutions for existing problems posed by businesses. In essence, it was not known for trying out new solutions, due in large part to internal costs and process constraints. Thanks to cloud computing, technology functionalities are no longer developed from scratch. IT now has access to data, code, and developer communities that can help unleash unlimited opportunities for experimentation. A multitude of APIs has created a data economy where ready-to-use codes enable faster solution delivery. With standard ecosystems and plug-and-play options, the overall cost and time of experimentation has drastically been reduced – increasing the opportunity to innovate.
- IT as an innovation driver: This brings me to the most important difference between the world of IT automation and the digital world of IT. In the old world, IT always started out with a well-defined business problem for which it had to provide a solution from known monolith technology options. Juxtapose this to the current scenario, in which digital technology helps solve benign problems or areas of inconvenience that have not yet become actual problems. Uber and Airbnb are great examples of solving benign problems never voiced by consumers. At the same time, such innovation has delivered completely new efficiencies, creating customer delight even when the customer was not actively looking for it.
Digitalization is a far more powerful – if not ubiquitous – phenomenon compared to the automation solutions of the past. When integrated appropriately, digital solutions have the potential to raise the equity of IT as an innovation partner to business like never before.
I think the over rendered jargon of “SMAC” (social, mobile, analytics, and cloud) – and now the Internet of Things – has made us cynical. CIOs should junk the jargon and leverage the real value inherent in these technologies for delivering great new age solutions. CIOs need to work on architecture, learning curves, adoption, and competency building to effectively drive digital technology-led transformation.
For more insight on digital transformation, see Connected For Purpose: What Total Digital Transformation Looks Like.