It seems everyone these days—from global business leaders to public intellectuals to government representatives—is talking about how digitalization will fundamentally change the way we live and work. Indeed, significant technological disruption is already reinventing legacy business practices and social norms.
Organizations that have yet to begin their digital transformation are at risk of falling behind more mature digital enterprises that are already well on their way. The speed of innovation and the need to transform will be among the biggest challenges commercial enterprises and the public sector face over the coming decade.
Balancing the needs of today’s business while simultaneously building this brave new world requires transformational leadership at its best. To be prepared, leaders should keep a close eye on the following top 5 trends.
1) Digitalization is all about customers. Customer-centricity is still the name of the game, even if you are one step removed from your clients’ customers. To truly understand your clients’ needs, you must first understand their customers’ needs. Conducting comprehensive customer reviews will help you get to know your clients better than they know themselves. Your job is to understand why customers buy from your clients and their competitors. Educate yourself on the industry and evaluate what the behavior of the customer says about your client.
2) Regulation of the market must be scalable. People around the world, and especially people in Europe, are asking why technological innovation is not happening faster. This question has deep economic and regulatory implications. Progress will only happen quickly if the private and public sector work closely to re-design the market to encourage investment and data sharing across borders. Of course, this must go hand in hand with building trust in areas such as security and data privacy, especially in countries with high expectations for privacy. Digitalization offers many benefits, including the ability to connect humans in increasingly inclusive networks that allow us to think and behave as an extended global family. But careful regulation is a necessary part of making these benefits accessible to all national economies.
3) Full speed ahead with cloud, big data, smart devices and the Internet of Things (IoT). Millions of people are taking advantage of renewable energy at near zero cost, car sharing and home sharing at marginal costs, producing 3D-printed products for almost nothing and transferring their shopping habits to virtual retail. While traditional industries are slowly adapting to this new reality, unexpected competition is taking shape. These new enterprises are leading the way in creating digital platforms, artificial intelligence, algorithms and predictive analysis to fully customize their services and products. Such upstarts are the nightmare of many traditional enterprises, forcing slow movers to consider more carefully than ever where to invest resources. Cloud solutions, big data, IoT and smart devices hold the key to how enterprises must think about integrating existing and new customers into their services and products.
4) Traditional IT is becoming a commodity. Netflix made the decision last year to shut down the last of its private data centers and move to Amazon Web Services for storage, software and services. Since then, Netflix has reported significant business growth, which it attributes at least in part to its savings on data centers. Clearly, the company is reaping many benefits from its new business model, starting with the ability to allocate fewer resources to IT and more to marketing and other business-building initiatives. As security and trust issues continue to improve, more large enterprises will follow Netflix’s lead.
5) Building partnerships and ecosystems is at the forefront of innovation. You will not be able to achieve your digital transformation in silos. Driving dynamic solutions will depend on creating a new, sustainable partner economy. Don’t let competitive overlap distract you from identifying and working with the best possible partners and network you can find.