High Tech Blazes The Digital Transformation Trail

Dirk Wenzel

Digital transformation is not just a new technology trend; it is fundamentally changing how business is done across all industries. From product innovation to customer engagement and enterprise productivity, technologies such as the Internet of Things (IoT) and real-time, Big Data analytics as well as social, mobile, and cloud computing, are changing every aspect of business.

The high-tech industry is playing a unique role, not just as an enabler of digital transformation, but also as a potential disrupter of all industries. 70% of all high-tech revenue will be directly related to other industries adopting the digital economy by 2020. Companies in every industry use technology to reimagine their core business processes. This makes it harder to see where high tech ends and other industries begin. New products and business models rely on technology to deliver benefits. Those benefits help them to leapfrog the competition as customers choose to buy outcomes rather than products.

Connected things enable new business models

According to IDC, the IoT will reshape almost every aspect of business. This change includes product design, marketing strategies, executive decisions, customer engagement, and after-sales service. In this projected model, every company will need to become the focal point of a broad ecosystem. This business network will enable close collaboration among all participants using mobile, analytics, and the cloud in a secure environment.

Examples of outcome-based business models already exist across both consumer and B2B companies. Lexmark, for example, recognized that customers want prints, not printers. It sells its products as a service and billing is based on usage, not the hardware that was used to create the print. But the company took it further. With the acquisition of smaller software companies, it is now able to manage the entire document flow, from paper to digital documents that are fully integrated into the back-end business processes.

Research in the Harvard Business Review shows that nearly 60 percent of the buying process happens before initial contact with a sales rep. “First Mile” technology helps companies connect with potential customers during the time before they engage with the company.

The same technology helps to onboard customers, admit patients, process claims, or simplify any other process that requires integration between systems. The result is closer relationships with customers and a much deeper understanding of the customer’s needs and interests.

It might appear that Lexmark’s business is selling printers. Yet the real backbone of the First Mile offering is software, not hardware. In this case, the hardware is acting as an intermediary by collecting information. It then passes the information to other systems.

A connected value chain

The “connected home” is one of the earliest examples of how companies are using high tech to reimagine their business processes.

Google’s Nest connected thermostats keep consumer’s home comfortable. They also connect consumers and energy companies to find the best balance between comfort and economy.

Emerson ComfortGuard services use sensor-equipped HVAC equipment to track performance. When the sensor detects it’s time for service, it notifies the consumer using email. It understands whether the equipment needs a simple filter change or a part replacement. Using predictive analytics, the service can even go a step further. It can autonomously schedule a maintenance appointment before the equipment even malfunctions and it connects to an approved technician list.

These simple examples illustrate how technology is changing basic processes, and this is only the beginning. Connected cars, connected cities, connected machines, and wearables – smart devices have become so powerful and so small that they will be everywhere, enabling a complete new world of tracking, measurements, and monitoring of situation- and environment-specific parameters. Reported in real time, combined with powerful analytics and integrated into core business processes, will enable fact-based, situation-specific decision-making in the moment.

These success stories show that winners in every industry are early adopters of high-technology enhancements to traditional products offerings that enable digital transformation to meet customer needs. In many cases, these new products fulfill needs that customers may not have recognized until they saw the product.

Regardless of the industry, high technology in the form of mobile access, connected devices, sophisticated analytics, and software is blazing the trail to digital transformations and reimagined products and services.

In upcoming blogs we will take a deeper look into digital transformation and how it impacts business models, supply chain networks, customer engagement, as well as talent that is needed to make it all happen.

For more information on how digital transformation is impacting all aspects of high-tech business, please visit here.


Dirk Wenzel

About Dirk Wenzel

Dirk Wenzel is the Head of Global High Tech Solution Marketing at SAP. He has over twenty years’ experience in software, management, consulting and the high tech industry, with deep expertise in business development, operations and marketing with a focus on business transformation and technology.