Digital transformation. It’s a catch all term for how digital technologies are changing the lives we lead, and the businesses we operate today. To be honest, it’s overused. You’ll see it in nearly every article you now read. What’s the problem with that? As a term becomes more and more used, it fails to stop people in their tracks. It fails to engage in meaningful thought. And when the term digital transformation becomes like wallpaper, it does the technologies it seeks to promote a disservice.
So, let’s just stop a minute. Let’s unpack the term digital transformation and let’s find meaning in it again so that you can understand where it will truly help your business to progress.
Most businesses understand the term digital now. Even Cloud is a widely understood term and organisations are embracing the systems and processes that sit on them to facilitate productivity, efficiency, collaboration and relationship building. For most organisations, it’s an acceptance that their customers also expect digital progression and the improved service levels that come with them. So for most, it’s about starting there. Then there’s the visionary stuff that is fast becoming the mainstream.
The Internet of Things (aka IoT) is about Cloud-based machine-to-machine communication made possible by networks of data gathering sensors. It generates data that instigates an action designed to improve efficiency. It works best when there is infrastructure in place to analyse it all. It’s pretty limitless and is growing into new areas every day. At a domestic and immediately understood level, it could be your smart energy meter that allows you to control your energy use remotely or an alarm clock that tells your coffee machine to get going with that first cup of the day. At a city level, it could be smart roads and amenities. At a business level, it’s about the same drive for efficiency, productivity and turnover.
In manufacturing, new equipment tends to come with IoT sensors pre installed but the industry is also adept at retro fitting to existing equipment. BI Intelligence, Business Insider’s premium research service, expects the installed base of manufacturing IoT devices to grow from 237 million in 2015 to 923 million in 2020. By then, manufacturers will spend approximately $267 billion on the IoT. Manufacturers are currently using IoT solutions to track assets in their factories, consolidate their control rooms, and increase their analytics functionality through predictive maintenance. Many IoT solutions are still basic, but we expect manufacturers to eventually implement more complex technologies, such as autonomous robots and augmented reality (AR) tools. Indeed, it’s innovations like this that usual cause growth for a country’s economy as it takes us into a new industrial age.
Insurers using IoT technologies will be able to cut costs, improve business practices and better assess clients’ risk levels. Usage based insurance (UBI) is already in play with IoT devices that track customer activity and offer discounts or rewards for desired behavior.
Artificial intelligence has just enjoyed its 60th birthday and it shows no signs of letting up. Digital Visionary, Kevin Kelly (you can find him on TED Talks) puts it like this. We already have AI. It’s everywhere. It’s used to fly planes, to make recommendations on Netflix or Amazon, to diagnose x rays, to go through legal evidence and even to serve you search results. With the Industrial Revolution, we got artificial power. With AI, we are plugging in smartness and giving that power cognition. As humans, our intelligence is too dynamic. We have a symphony of over 100 different types of intelligence in our brain that forms different orchestras on a minute-by-minute basis. Sometimes, one player in that orchestra gets too noisy for the situation. With AI, you can have just the intelligence you need. So, your machinery, your programmes, your smart car can get on with the job without any distraction. Here’s an interesting though of his. It’s not about the AI taking over. AI and human intelligence have to work together. It’s not about AI taking over. It can’t. Its profundity is found in its single mindedness. We need to continue to deliver the lateral thinking. So, yes manufacturing may be reticent to let AI in, but the manufacturers that will excel are those that make it work FOR them, not instead of them.
Businesses are generating a huge amount of Big Data on a day-to-day basis. Big data is when you have enough of it that you can analyse it for insights leading to better decision-making and strategic changes. Most businesses have the data yet many don’t have the means to analyse it. Retailers who are confidently using CRM to generate vouchers and communication based on a customer’s buying habits are ahead of the game. The insurance sector is catching up fast with the ability to recalculate entire risk portfolios in minutes and detecting fraudulent behavior before it hits. Manufacturing can identify root causes of issues and defects in near real time limiting damage.
Imagine a business call where you can call up remote members of the team or your clients, and engage with them in augmented reality. Unbelievably more natural, definitely more collaborative and surely something we will all want to be doing in the future. The same 3d experience that brings proper collaboration to businesses raises the game for training, for repair instructions, for showcasing products, for tourism, for interior design, for office environments. It really is limitless and whilst the glasses are currently clumpy and conspicuous, just give it time. The dominant form of this hasn’t emerged yet and whilst I find it very exciting, I suspect the mainstream won’t be ready for this for quite some time.
Drones remain a thing and you’ll probably have seen Amazon’s efforts to implement them. I suspect the US will lead the way given the passing of FAA rules that make it easier for commercial interests to take to the skies. I think there’s huge potential for manufacturing firms and the insurance sector to use drones although in completely different ways. Watch this space!
What will your business’ digital transformation look like in 2017?
Here’s what I suggest.
- Start with your strategy. Always. Never jump to technology because it excites you. Know that it meets a corporate objective first.
- Get an outside view of your systems, processes and corporate objectives. Chances are that you will be starting with the basics by making sure your CRM is doing what it needs to do, that your processes are intelligent and that your data is being put to good use.
- If you are looking at new systems, look at the bigger picture of integration of where you are now and where you plan to go. Scalability is crucial.