Digitization has emerged as one of the hottest buzzwords heard everywhere from corporate boardrooms, to consultancies, and the business media. Oftentimes it comes in the form of a vague threat, a storm cloud looming on the horizon bearing the message, “Digitize or be left in the dust.” What’s less often spoken of is what this process actually entails, and how it can be done.
Many CEOs are under the impression that given a business case and a direction, they can pull off a successful digital transformation. Sadly, this is often not so. What they fail to realize is that for a digital transformation to be successful, it must actually transform the business, not just add surface-level technological upgrades. The business case and the direction are only the ‘how’ and the ‘what’ of the issue, the missing piece is the ‘why.’ That’s where the strategy comes into play.
Every digital strategy is supported by three distinct pillars. Those are:
You also need a solid foundation of digital workplace infrastructure designed to allow people to innovate, collaborate, and communicate across departments and geographic locations. With these three pillars set upon a solid digital foundation, companies can easily adapt their business model and value chain to the shifting priorities of the market, identify and enter new business areas, remain competitive against new market entrants, and establish new capabilities as they are needed.
Before the advent of the digital age, product development was a time consuming and costly proposition for almost any company. Automotive manufacturers, for instance, would have to take new car models from the initial sketch phase and clay modeling, all the way to prototyping, testing, and production all with real physical products.
Now, however, new car models can be drawn up digitally, tested with real-world physics, focus grouped, and even driven via virtual or augmented reality all before a single car is ever produced. This drastically cuts down the amount of time between concept and production, reduces costs, and allows companies to effectively gauge consumer opinion, and optimize their products before they hit showroom floors. This also increases innovation, as there is limited risk in trying out new features or designs which would have been deemed too costly to develop in the past. This same process applies to almost any product and industry, and we’re only beginning to tap the true potential of this process.
Digitization has the potential to drastically improve the efficiency and control of the entire supply chain and operations of a company. Imagine a manufacturing company that sources it’s materials from a variety of 3rd party suppliers overseas. Traditionally, a warehouse manager would keep track of materials and place orders new supplies before they ran out. However, what happens if the price of their materials drops in one location, but not another? What if there is a natural disaster that prevents them from getting their materials from their usual supplier?
With a fully digital, automated supply chain, a warehouse could use sensors to signal when new materials need to be ordered. The system would then automatically find the lowest-priced supplier, and place an order taking many different variables into consideration to get the lowest overall cost. If there’s a disruption in one supplier due to unforeseen circumstances, they’d be automatically notified, and a contingency plan could be enacted. This is the future of the Internet 4.0, and it could potentially result in completely self-governed “dark factories” which run without human interaction. In fact, many companies are already in the process of implementing such technology full-scale.
The effects that digitization are having on businesses is the most outwardly apparent change taking place, and many companies have already fully embraced it as a method of delivering marketing and brand messaging, personalized offers, as well as real-time decision and sales support to their customers.
For instance, companies now allow customers to pick out and customize their products online via a product configurator which shows customers a high-definition visualization of exactly how their product will look and function. You can configure your new phone, furnish your house, customize your car and even take it out for a spin, all without visiting a store, or leaving your own living room.
On the same hand, companies can display a huge variety of product styles and features without having to manufacture a single unit until it’s purchased, and are able to deliver exactly the right products to the right customers. Never before has this level of individualized marketing been possible, and it’s going to have a huge impact on the way almost any product or service is bought and sold in the future.
Are you ready to take your first step in the future of business? Because there are so many ways companies can go when it comes to their digital strategy, it’s wise to have an experienced team of digital transformation specialists guide you in the right direction. When it comes to your visualizations, RenderThat can help set you up with the right person or team for the job. Just get in contact, and we’ll walk you through every step of the way.