IIoT

The Digital Mindset

By:Jayesh Ghatge, Market Principal, ThoughtWorks India

We are in an age of fast adoption when it comes to digital technology. The Mint puts the total number of mobile Internet users at almost 650 mn by 2020, while users with high-speed internet access are expected to be around 550 mn. The report, ‘Painting the Digital Future of Retail and Consumer Goods Companies’, based on an analysis for the World Economic Forum, states that retailers and consumer goods companies could unlock $2.95 trillion in value for the industry and consumers over the next decade by accelerating digital transformation. This value will be driven by investments in new, digitally-driven business models that give consumers greater choice around how they purchase goods and services, and enable companies to deliver profitable, differentiated experiences.

But, business technology is not keeping pace with this kind of consumer tech evolution. And when they try, according to a report by MIT Sloan Management Review, only a, “…minority of companies have developed the management and technology skills to realize the potential of new technologies.” The report also states that, “Almost no organization is sheltered from the competitive disruption wrought by the widespread adoption of digital technologies.”

Today, computing and mobile devices are cheaper than ever before, and the internet stands as a basic and key building block of technology democratization and access to information, which proves HBR’s point when it says, “We’re at a critical time for the digital economy. Digital is no longer the shiny front end of the organization – it’s integrated into every aspect of today’s companies. As digital technologies continue to transform the economy, many leaders are struggling to set a digital strategy, shift organizational structures, and remove the barriers that are keeping them from maximizing the potential impact of new digital technologies.”

This becomes all the more true, when we couple the power of the (key building block) internet with the millennial generation – a group of people who are rewriting the way we live, work and communicate. The result is a whole new digital environment that new age employers and employees should be taking advantage of.

The eventual Digital Mindset will see businesses increasing investments in capabilities, using technology – both in people capability and experimental or research capabilities. And business leaders will start scouting for reliable partners on this journey of innovation and digital transformation. This is evidenced in a PWC report that states, “Companies are smarter about technology than they used to be, but the challenges of integrating new tech into the enterprise have gotten more difficult. New tools are continually entering the marketplace, and ‘digital’ has evolved from a synonym for IT to a more expansive approach to technology that is making its mark on customers and culture.”

Unlocking Enterprise Potential

The realization also brings to fore, a reason for businesses’ great hesitation as they stand at the cusp of a digital journey – the actual scale of digital transformation. The transformation cuts across business functions and is not limited to technology teams.

Digital Transformation looks at the vertical and horizontal value chains of a business and integrates them. Organizations will need to critically and courageously reexamine existing brand value, range of products and services and their business processes. The analytical view should also revisit capabilities and the value that partners bring to an organization’s business. With Time-to-Market being one the most important factors for success, the speed of technology evolution only complicates an organisational transformation agenda.

Yet another element that adds to the complexity of change is the dynamic IT landscape and prior (sometimes sizable) investments made by an organization. Organizations, not realising that IT systems can be a value add or play a strategic rather than supportive role, tend to deal with the IT landscape by creating, a complex IT structure or outsource to vendor partners.

Also, traditional organisations’ commit follies such as, functioning in silos which causes the whole group to fail, even if individual silos are on point. For an organization with a digital mindset, to perform at par, all new assets, solutions and platforms, that are being built as part of the digital journey, should benefit from every department’s full participation. A misplaced belief, in such situations is that newly minted digital-future-ready elements are the responsibility of the organization’s CTO or CDO, relegating these important elements to be IT solutions rather than business solutions.

Digital Platform as Business
In spite of these hurdles, there are a growing number of organizations that are slowly getting comfortable with having a digital mindset. And a lot of brick and mortar business are seeing value in making the transition from ‘Digital Platforms for Business’ to ‘Digital Platform as Business’. The difference between the two being how digital can support an existing business versus how to create a new business models using digital capabilities (technology at core).

Quite understandably, most, if not all digital transformation journeys are considered big IT programs and are compared to creating an e-commerce channel or crafting a differentiated in-store / physical experience using digital tools. And given the nature of change, which affects the fundamental behavior of an organization, it becomes difficult for traditional businesses to plan their, sometimes radical investments, for 5 years later. Agility in these situations are maintained with the help of digital leaders, who, when identified by the traditional businesses can help the latter cross the chasm to become a truly digital business.

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