New archetype of a digital business

Organisations that are able to modernise sooner will have unprecedented competitive advantage over their peers

By PwC
Updated: Jun 10, 2016 09:03:18 AM UTC
iot
With technologies like big data and cloud, it is now easier to handle large volumes of data and perform cross-functional analytics in real-time ( Photo: Shutterstock)

Digital technologies like mobile, Internet of Things (IoT), cloud, and social along with data intelligence are converging into the online and physical worlds to create new business designs that are set to transform every industry. Unlike in the past decades where technology was primarily viewed as an IT expense item, digital technologies have the potential to drive topline revenue and competitive differentiation. This has also opened the door for technology stalwarts like Google and Amazon to enter and disrupt other industries like automobiles (self-driving cars) and smart home (Echo). Leadership’s desire to capitalise on digital technology is so strong that it’s disrupting the enterprise operating model, as evidenced by shifting spending patterns, new digital roles, and undefined working relationships. While many organisations are creating the chief digital officer position, the role of the chief information officer (CIO) has never been more critical in this digital transformation. Let’s explore what a digital business will look like in the near future and also the changing role of the CIO.

New patterns We believe that organisations need to adopt new behavioural patterns into their DNA to be successful in the dynamic digital era. Digital technologies will enable adoption of the behavioural patterns highlighted below:

1. Disrupt yourself (constant innovation, new business models)
You don’t need to look any further than GE and Samsung to understand this pattern. GE is transforming their business with brilliant machines and Predix (a cloud-based platform) which leverages the data gathered from the machines to create several industrial internet applications to support and drive business outcomes. Samsung, with their latest connected refrigerators, are pushing the boundaries of a smart home. Every enterprise in every industry needs to look at new ways to deliver customer experience and value which in turn will drive new business and service models that don’t exist today.

The CIO can play a critical role here in terms of identifying acquisition targets that are driven by digital technologies which are relevant to their business.

2. Business velocity with intelligent automation
Every business strives for velocity in their operations and wants to deliver products and services faster to the market. Automation at a functional level has helped in achieving part of this velocity. However, until now, there was no easy way to derive intelligence across these systems as most systems operated in silos. A simple example is the supply chain, where even today, there is no easy way to get end-to-end visibility and respond to demand changes in real time. With technologies like big data and cloud, it is now easier to handle large volumes of data and perform cross-functional analytics in real time. Also, IoT enables a new level of visibility across the manufacturing shop floor (smart sensors), warehouses (RFID, beacons), and delivery trucks (telemetry + Google Maps). It’s not unreasonable to imagine a scenario where some of the decisions are being made by the systems autonomously without human intervention.

Here again, the CIO can play a critical role by leading the charge in terms of cloud adoption and enablement, technology selection and visibility of startups disrupting their business.

3. Modernise applications (Remember Y2K?)
Software and mobile applications are at the core of every enterprise’s opportunity for digital transformation. However, therein lies the problem as each enterprise has amassed a large number of legacy systems which has added to the complexity due to multiple operating systems, databases, middleware and programming languages used. To achieve the goal of business velocity, the enterprise needs to have agility in their applications. This agility comes from reduced complexity, modularity, and standardisation.

Remember Y2K, when every enterprise was racing against time to make sure all their applications would not crash when the 2 digit date on the PC changed from ‘99’ to ‘00’ for the year 2000? We should consider the same level of urgency now to modernise our applications. Technologies like Application Containers, Microservices and DevOps have already created the perfect canvas for developing, running and updating applications at lightning speed. Google, Amazon and Facebook are doing this every day. The organisations that are able to modernise sooner, will have unprecedented competitive advantage over their peers for years to come.

The opportunity for the CIO in driving the charter for application modernisation is obvious. With deep knowledge of the existing legacy systems, no one is in a better position to draw the roadmap for this transformation.

4. New Realities (Virtual Reality -VR, Augmented Reality - AR and Artificial Intelligence - AI)
Lastly, we all need to get ready for the new realities that are going to hit us in the near future with technologies like virtual reality, augmented reality and artificial intelligence. The first Oculus Rift was hand-delivered a few days ago and that could very well be the beginning of a whole new world of experiences for all of us.

Digital disruption is happening as we speak and not all enterprises will survive this wave of evolution. What is your digital strategy to ride this wave?

-By Vijay Kannan, Director - Advisory PwC India and Ashootosh Chand, Executive Director-Advisory, PwC India

The thoughts and opinions shared here are of the author.

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