Introduction to Digital Transformation

Introduction to Digital Transformation

You might end up here if you are struggling with your Digital Transformation inside your organization. Most of the time that terms is often used but still not thoroughly understood and sometimes mixed up with others concepts.

This blog post is the first from a 7 series explaining how to address the matter and elaborate a strategy starting with a concrete definition of what is the Digital Transformation?

  1. What does Digital Transformation mean?
  2. Why are businesses experiencing a Digital Transformation?
  3. Path towards a data driven company

What does Digital Transformation mean?

Digital Transformation is the path towards how an enterprise employ technology to rethink their businesses and enable new ones. An organization that leverage innovation and data to inform or upgrade processes, raising the decision-making capabilities to develop new business models from serving their customers to transcend their own industry.

Why are businesses experiencing a Digital Transformation?

To understand how most of the organizations struggle today with their digital transformation, we need first to understand its origin. Today it has been observed that Gross Domestic Product is slowing down all over the word due to a decline of productivity for the last twenty years.

As a result, unemployment is increasing everywhere and makes it a challenge for the millennials entering in the workforce. Most of the economists expect growth and productivity to continue to slow down.

At the end of the 19th and 20th century we concluded that the first and the second Industrial Revolution that half of the population is living in better conditions that their ancestors since they started replacements hand tools for machines in 1760. We also know that 40% of living people are in a far worse conditions that their ancestors.

Today there is a concentration of wealth. In 2020 the richest man is currently Jeff Bezos; CEO of Amazon and the world encounter more and more crisis. The current economic models highlight a structural economic crisis since early 19th century which started an environmental crisis that triggered a climate change.

What triggered disruption during the successive industrial revolution involve three technologies that emerged and intersected as a technological platform. It changed how to manage operation, how to supply energy and where are our geographical economic activities:

  • New communication technology
  • New source of energy
  • New transportation mode

At the first Industrial Revolution, from the first messenger app (Telegraph) and the Printing Revolution with steam water press have been absorbed to discover a new energy source: coal. Collection and making use of it came with the steam engine, that once put on rails brought the firsts trains that was a game changer for national transportation and logistics.

From the Telephone that was the first communication mode where people can talk in real time no matter the distance, which make information transmission at the speed of light, invention of radio and television with electricity centralization led the second industrial revolution with the discovery of petroleum as a new source of energy.

All those technology revolutions that followed each other since the end of 18th century created new and redefined industries, merging some, destroying others. In the 1940s, Joseph Schumpeter an Austrian economist coined the term of “creative destruction” to describe that phenomenon.

Path towards a Data Driven company

Internet had been invented in 1989 by Tim Berners-Lee (English) with the original name of World Wide Web, the first web browser came to life in 1991 and we are living a time where we are surrounded of sensors where data can be collected at high scale for anyone leveraging technology, this period is also called the Digital Age.

Digital Laoban