I write and speak a great deal about
digital transformation, however I don't think I have yet clearly defined it and its relevance to businesses. Let me step back and start by saying my working definition of
digital transformation is the application of digital technologies in a manner that enables new types of innovation, businesses models, behaviors, products and services. Often digital transformations disrupt the status quo, traditional business paradigms and accepted best practices as a result of the merging of the physical world with the digital. The process of merging, changes many things and we will consider a few of them here.
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| Figure 1 |
In a study conducted in October 2013 by Cognizant, 247 executives were surveyed and shared that 73% of core business processes will need to be modernized to meet cost, agility and new market pressures over the next 24 to 36 months. I believe these "new market" pressures are a direct result of digital transformations happening all around us.
In figure 1, we see an example of the 3D laser scanning of a physical object (the bridge). The 3D laser scans a physical object, and then creates a digital representation of it. This digital representation is precise. Once the digital representation is in your computer, you can import it into asset management, maintenance, service and other kinds of software systems. Here you can add notes, tags, location data, maintenance schedules, inspection reports and regulatory and compliance documents. All of these data points allow the organizations responsible for maintenance and services to have a very clear understanding of the asset and the services required. Maintenance and services performed can be tagged to exact locations and documented precisely. For example, you can mark an iron beam, a bolt, a weld and document maintenance done to each.
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| Figure 2 |
The digital representation of the bridge can then be added to a map. Now you have an exact location and an exact digital representation of the physical object on the map. These precise digital representations enable the organization that owns the digital content to have a significant competitive advantage over companies that don't. They can use this data to optimize planning and SLAs. The digital content has an economic value. It provides a competitive advantage. You have precise data that your competition does not.
Stored digital content about a person or object is often referred to as a "
code halo." The code (digital content) surrounding something can be used to develop all kinds of new and innovative services, products and businesses. In figure 2, we have a digital representation of a plant. Plants need to be maintained and location data, maintenance schedules, maintenance history, parts, materials, SLAs, warranties, service providers, manufacturers, production schedules, costs etc., can all be tracked for every part, machine, pipe, belt and component of the plant. Sensors with wireless embedded chips connected to machines, equipment and other key components of the plant can monitor the operational status of the plant and can provide additional digital representations of the health of the plant. Problem areas can quickly be identified, isolated and visualized. Maintenance and repairs can then be conducted on an optimized plan and schedule that minimizes downtime.
A plant that is digitally transformed is likely to be far more productive and profitable than one that is not. We have been considering digital transformation in the context of bridges and plants here, but these same types of transformations are impacting retail banks, insurance, healthcare, education etc., as well.
Over the next 5 years we will witness the rapid digital transformation of just about every industry and market around the globe. The winners in the global marketplace will be those companies that best understand how these digital transformations can be used to lower costs, increase situational awareness, improve productivity, customer service and sales.
Software companies like
ClickSoftware, the leader in Gartner's Magic Quadrant for Field Services three years in a row, are investing heavily into digital transformations, utilizing real-time enterprise mobility, geospatial data and artificial intelligence to optimize workforce and service scheduling.
In the book industry, physical books were transformed into eBooks. Physical bookstores were transformed into online digital marketplaces. Book warehouses were transformed into databases. Physical transportation and logistics services were transformed into digital downloads. In music and entertainment, physical records, tapes, CDs, DVDs, etc., were transformed into digital downloads. Physical music and movie rental locations have also been replaced by digital markets. In retail banking, mobile apps are quickly replacing physical bank branches. The transformations are endless.
It is each of our roles to monitor our own industries, markets and businesses and to embrace the digital transformations taking place and to position ourselves to be in the the winners column. We must continually ask ourselves, "Are we acting strategically enough to matter, and at the pace of innovation required to succeed?"
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Kevin Benedict
Senior Analyst, Digital Transformation
Cognizant
Follow me on Twitter @krbenedict
***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and SMAC analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.
