Digital disruption has thrown the well-laid plans and strategies of many an Australian CIO into disarray. In fact, it's the number one paranoia haunting today's management teams and nobody knows where or when the disruption will hit.
This is why developing a strategy for the unknown is one of the most challenging issues keeping many CIOs awake at night. This strategy needs to be a constantly evolving plan that can be changed, modified or replaced at a moment's notice.
Analyst firm IDC predicts that digital transformation will have a substantial impact on the Australian economy over the next three to four years.
IDC expects that by 2020, half of Australia's 500 largest companies will see the majority of their business depend on an ability to create digitally enhanced products and services.
This is great for the consumer, especially since a major factor behind the current uncertainty is the incredible shift in power to the customer over the last five years.
Some of the customer-centric issues facing every enterprise in every industry are:
- Communicating and interacting through multiple channels
- Customising products and services to a market of one
- Involving customers in product design
- Coping with customers that can source globally and compare prices globally
- Providing add-on digital services
- Dealing with the immediate influence of market opinion from anywhere in the world, anytime.
It's great news for the enterprise too - the industrial Internet (or Industry 4.0) will have a much bigger impact on digitalising the world than the social or consumer phase ever had.
And the business opportunities will be correspondingly large. We are still in the early stages of the IoT, and “the who, the what, the how and the why” of the industrial Internet are all wide-open issues.
And to make things even more exciting, the solutions customers are building are changing the world on a daily basis. The technology portfolio driving this change is expanding too.
The knock-on effect? The industrial Internet, the greatest integration program man has ever seen, provides the backbone for the amalgamation of Big Data which provides the fuel for machine learning and Artificial Intelligence, the basis of the next generation of IoT applications.
For the enterprise, and for Government services, this means having your IT and business departments use common tools, speaking a common language and co-developing new applications as rapidly as the market demands.
It means having the ability to identify market trends early, spot individual business or external events in real-time and having the flexibility and agility to change your business operations to the “new” situation as fast as needed.
Information, analysis and the ability to respond are key to future success.
The speed of adapting to change is of the essence. The faster the enterprise moves the easier it is to turn a business challenge into a new business opportunity. Only the slow movers will view digitalisation as a threat. To do nothing is not an option.
In its "2017 predictions: dynamics that will shape the future in the age of the customer" report, Forrester emphasises that the customer is the “fundamental driver” of these changes.
The analyst group predicts that leaders will devolve operational controls downward to individual brands and divisions to get closer to their customers.
The enterprise transformation demanded by digitalisation dwarfs any other factors impacting the global economy - from low oil and commodity prices to sub-zero interest rates (these constantly changing issues themselves constitute a part of the unknown, they could be out of date by the time you read this).
We had to tear up our own business rule book as we realised that to support customers through their digital transformations meant doing the same to ourselves.
These are exciting times; inventing the future with customers is now a daily experience.
Roll on 2017. Who knows what it will bring? But it pays to be ready.