Five Pillars Of Digital Transformation: Invest In Digital Technology Capabilities

Ashutosh Kumar, Joao Ribeiro, Jose Carvalho, and Kay P. Hradilak

Today’s consumers are increasingly different from consumers of the past. Millennials do not understand what life was like before the Internet, and being connected is second nature for them. The new technological age, with IoT, Big Data, predictive analytics, 3D printing, and genetic sequencing, is changing the world in ways and at speeds that will make it hard for future generations to relate to our life today. Technology will become even more central in our lives.

It is important for businesses to evolve alongside these changes, using technology channels to become closer to customers and to define their strategy and business model. 

The reach for an engaging relationship

In an excellent example of technology used for the benefit and convenience of both company and customers, Domino’s Pizza in the United Kingdom has created a new app that introduces a gamification concept to the pizza-ordering process. The app creates a digital twin of a pizza, and customers can earn promotional points by playing with the representation of their pizza while they wait. Customers also have full visibility into where their pizza is in the cooking and delivery process. At the same time, Domino’s gains awareness of their customer and boosts customers’ attachment to the brand.

After introducing the app, Domino’s saw a rise in EBITDA of 18% a year, thanks to increased sales, revenue, and margin per pizza sold. Everything is done online so there is no call center involved, which decreases the cost of sales, and the technology optimizes the supply chain with greater transparency.

This is a prime example of technology running the entire value chain, internally and externally, and extending customer insights back to the company.

Different purposes of technology

The example above shows how much a new platform can add to a business. It is less obvious to see the impact it has on existing IT landscapes and how to integrate a core IT platform into an entrepreneurial technology platform. Indeed, established businesses face a large challenge to keep the lights and the profits running while changing the mindset and preparing for what is coming in digital innovation. Gartner calls this “bimodal IT” and IDC describes it as the Innovation–Transformation–Integration model. In a nutshell, businesses need to innovate, while still maintaining a stable core of processes to run their business.

This dilemma exists for both enterprise giants and startups. An enterprise giant wants to protect its business while still innovating and taking mitigated risks. The startup does not want to be a startup forever and needs platforms that are scalable and can support an enterprise business. Solving this means focusing on the utility and competitive sides of IT to optimize the efficiency of processes, while enabling seamless integration to a platform that can deliver on technological innovation to drive business disruption.

Technology is no longer an enabler of the business; it is the core of strategy

We finish this blog series right where we started. Technology must be considered in all interactions among people, processes, and things. The blurring lines between physical and digital bring new opportunities in the shape of new digital business models based on data and possibilities brought to life by entities that have been passive. Today even a simple toaster can be connected and provide useful information to users and businesses, and it may evolve into a product we cannot imagine today.

When Bitcoin appeared a few years ago, it was considered a threat to the free world, with governments and officials claiming it would be a dangerous enabler of money laundering. Today, the supply chain industry is investigating blockchain, Bitcoin’s underlying technology, to trace products’ sources, introduce transparency, and guarantee ethical behaviour in the value chain. Albert Einstein once said that “life is like riding a bike, to keep your balance you must keep moving.” With business, to stay relevant you need to keep evolving, and technology is a key component of it.

With all this being said, businesses need to consider technology both for new ways to engage with the market and to look inward to see how they engage with their employees. In our next post, we’ll look at these questions:

  • Is technology a threat to people?
  • How can humans stay relevant in a digital world?
  • How can technology engage people in the workplace?
  • What are the jobs of the future?

While you wait, assess your Digital Transformation Maturity with IDC.