Business Opportunities in the New Digital Age — Opening Statement

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Business Opportunities in the New Digital Age — Opening Statement

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Posted April 10, 2017 in Business Technology & Digital Transformation Strategies, Data Analytics & Digital Technologies Cutter Business Technology Journal
In this issue:

 

CUTTER BUSINESS TECHNOLOGY JOURNAL VOL. 30, NO. 3


The commerce that we recognize today has come a long way since prehistoric times. From a simple swapping of goods or services for other goods or services approx­imately 150,000 years ago, it has undergone fundamental transformation — particularly in the last four centuries — to the complex buying, selling, and trading that occurs now. Its model, organization, and methods of transaction and fulfillment have changed significantly, particularly following the introduction of money, industrialization, advances in transport (steamships, railroads, highways, aviation, and now drones), adoption of IT (including the Internet and Web and, more recently, mobile devices), and globalization. According to a recent study by Accenture and Oxford Economics, the increased use of digital technologies could add US $1.36 trillion to the total global economic output in 2020. If you consider the transformation of business to be phenomenal thus far, what do you expect the future of business will be?

Well, it’s definitely not going to be “business as usual.” The business landscape is poised for an unprecedented wave of further innovations and changes. How these will emerge, who will be the leading players in different sectors, and how the changes will affect us — average people in both advanced and developing countries, young and old — are still unknown. Nevertheless, we can make educated guesses, which may eventually become reality.

A welcome combination of complementary factors ­drives and supports the inevitable formation of a new business landscape. Technological advances such as augmented reality, virtual reality, cognitive assistants, 3D/4D printing, personalization, conversational interfaces, drones, deep learning, predictive analytics, the Internet of Things (IoT), blockchain, digital currencies, new payment systems, and affective computing play major roles in promoting and enabling the next wave of business innovation. These technologies — combined with new business models facilitated by social/collaborative commerce, shared services, and crowdsourcing — will have a profound influence across the business world. Furthermore, businesses will need to cater to the new expectations and demands of the digitally embedded “selfie” generation of customers, while also serving older generations.

This scenario raises a few pertinent questions among business executives and IT professionals: Where is the business world headed? How will businesses get transformed, and what new applications and innovations will emerge? What will evolve as the “new normal”? What new opportunities will arise for the IT industry and technology professionals?

In this issue, we examine these questions and provide perspectives on them from experts in different areas.

Business Transformation: A Multidimensional Problem and a Source of Ample Opportunities

It requires no great imagination to say that the IT advances noted above will be leveraged for a variety of business functions and activities. Among other things, businesses could:

  • Embrace data analytics, sentiment analysis, and advances in machine learning to gain new insights, make better business decisions, and improve ­customer experience and engagement

  • Use online and offline customer data and other relevant information to create better customer profiles for effective micro-targeted marketing

  • Harness artificial intelligence, deep learning, and smart systems, along with new kinds of display devices, for advertising and marketing

  • Make use of augmented reality, virtual reality, and mixed reality for new applications and services

  • Leverage the IoT, positioning systems, and wireless communications to enhance customer experience and engagement

  • Employ smart cognitive assistants in retail and customer services

  • Use technology to assist customers in merchandise selection or to facilitate the design, creation, and delivery of personalized, tailor-made products

  • Leverage 3D/4D printing, drones, autonomous vehicles, and new delivery models for retail commerce

Yet business transformation is not just about technology or the innovative use of technology. It’s a multi­dimensional endeavor. You need to bring together and integrate technology, business models, business processes/operations, organizational structure and culture, customer experience and engagement, and people’s needs and wants. You also have to address issues such as security and privacy, reliance and trust, and customers’ and partners’ concerns and comply with regulatory and legal requirements. In short, businesses need to think strategically and innovatively, visualizing a big picture of business and the supporting ecosystem in the new digital age.

Businesses have to come up with their business strategy for this new age and revisit and revise it as often as necessary. Writing in the MIT Sloan Management Review, Boston College Professor Gerald C. Kane and his coauthors argue that “The ability to digitally reimagine the business is determined in large part by a clear digital [business] strategy supported by leaders who foster a culture able to change and invent the new.”

Business opportunities abound in the new digital age. But you need to be creative, and you can’t expect customers to tell you what they need or want. As Steve Jobs famously observed, “People don’t know what they want until you show it to them.”

In This Issue

In our first article, David Wortley illustrates very well how technology has irrevocably changed the photographic industry since its inception. He paints an excellent picture of how, over a short span of 30 years, technology has totally transformed the photography business, destroyed some established leaders in the industry (e.g., Kodak), and let in new players who quickly seized the promise of technological advances. He then outlines the lessons businesses can learn from the industry’s journey and identifies the potential business opportunities that arise in this domain.

Next up, Vipin Jain discusses the key factors that encourage a business to transform itself into a digital business. He then examines three approaches to digital business transformation: business model transformation, business operations transformation, and IT transformation. To develop and successfully implement a practical, strategic transformation plan that helps realize the business vision, he advocates that businesses address a few critical questions about their organization, their objectives, and their capabilities. He then outlines emerging business opportunities in the healthcare, airline, and government sectors.

In our third article, Raj Ramesh offers an optimistic view of the disruptive technologies that are impacting every industry, noting that “disruptive technology can offer a business tremendous value if it is integrated well into the organization.” To enable this integration, Ramesh offers a framework to help organizations “understand and model [their] current state, model the desired future state, and identify the work that will help [the] organization move toward that future.” To demonstrate the framework in action, Ramesh walks us through an assortment of possible paths a hypothetical grocery store chain, Big Grocers, might take in its digital transformation journey. He also discusses the role of architecture in enabling organizations to “take a systematic approach to digital transformation.”

Innovation is a key element for digital business trans­formation. In their article, Cutter Senior Consultant Bhuvan Unhelkar and Alok Sharma briefly examine the landscape of contemporary innovation and discuss three types of innovation — incremental, transformational, and breakthrough — that a business can choose to pursue either individually or in combination with other firms. They also discuss how big data, IoT, and the cloud can facilitate innovation and the challenges that organizations must address when embracing these technologies, illustrating them with two use cases: remote health monitoring and self-driving cars. They also briefly describe a process for managing innovation.

Financial services is a key sector that first embraced — and was also impacted by — digitization, and it is poised for further transformation. In our concluding article, Dorota Zimnoch examines the changing landscape of both the finance and insurance industries, touching on customers’ growing expectations, business model disruption, and regulatory changes. She then outlines several models and strategies for collaborating with the fintech and insurtech startups that are disrupting these industries. Zimnoch describes how established businesses can choose to work with startups, invest in them, or build them, and she gives examples of firms that have adopted each of these models. She also provides helpful guidelines for businesses in any industry on how to choose suitable models and partnerships based on what their business objectives are and what role they want to play in the intended collaboration to achieve the desired transformation.

According to Klaus Schwab, founder and executive chairman of the World Economic Forum:

We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.

We hope you will find that the articles in this issue present perspectives and ideas on business transformation in the digital age that are interesting, insightful, and practical. We also hope they will inspire and encourage you to visualize the likely future of business in your domain and to explore the opportunities it presents. Finally, we hope their insights will help you identify suitable transformation strategies and plans and, if needed, choose viable collaboration models for partnering with startups and other firms in your digital business efforts. 

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About The Author

San Murugesan, Senior Consultant

San Murugesan is a Senior Consultant with Cutter Consortium's Data Analytics & Digital Technologies practice, Director of BRITE Professional Services, corporate trainer, and an Adjunct Professor in the School of Computing and Mathematics at the Western Sydney University, Australia. He is Editor-in-Chief of the IEEE’s IT Professional and Editor of IEEE’... Read More

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