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 those terms is often used but still not thoroughly understood and sometimes mixed up with others concepts.

This blog post is the first from a 3 series explaining how to address the matter and elaborate a strategy starting with a concrete definition of what is Digital Transformation?

  1. What does Digital Transformation mean?
  2. Why are businesses experiencing a Digital Transformation?
  3. A 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 leverages 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 industry.

Why are businesses experiencing a Digital Transformation?

To understand how most 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 world due to a decline in productivity over the last twenty years.

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

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

Today there is a concentration of wealth. In 2022 the richest man is currently Elon Musk; CEO of Tesla and SpaceX and the world encounter more and more crises. The current economic models highlight a structural economic crisis since the early 19th century which started an environmental crisis that triggered a climate change.

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

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

During the first Industrial Revolution, 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, which once put on rails brought the first trains that were a game-changer for national transportation and logistics.

The Telephone 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, the invention of the radio and television with electricity centralization led to the second industrial revolution with the discovery of petroleum as a new source of energy.

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

A path towards a Data Driven company

The 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