Digital is Not...

 

Digital is not  just "traditional IT". Digital is not  only "robotic process automation (RPA)" based solutions. Digital is one of the often mis-understood jargons in the industry and is very loosely used (with multiple interpretations). 

Majority of the folks / firms use "Digital" as a façade to traditional IT. Most of the problems that they focus are  around IT questions (e.g., server capacity planning, network service providers optimization, etc.). 

Then, what is Digital ? 

I have been researching what the true definition of "Digital" is. The answer to this lies in digging back to the evolution of IT solutions. 

The application of Digital has evolved over 3 generations- 

• First generation focused on solving (pre-2000s) at deploying Off the shelf with some custom solutions . 
• 2nd generation (2000s to ~2015) saw point solutions filling the gaps of large enterprise wide solutions. 
• 3rd generation is driving the reimagining of processes / interactions leveraging advanced tech capabilities driven by immense compute power 

In the first 2 generations, Digital (traditional IT) evolved with technological and compute constraints while processes were designed around the IT limitations. The focus of these solution was introduction of new tools - records storage, backend processing, work collaboration, security, etc. Cumbersome processes evolved around these IT gaps leading to inefficiencies and focusing on less value additive efforts. 

The 3rd generation of Digital transformation is the opportunity for companies to fix all prior deficiencies and radically transform organizations. Companies are staring at an immense potential to disrupt their business model and leapfrog the competition. Each company has the potential to become the next Tesla and disrupt their market space. 

 

The apt definition of Digital is associated with the paradigm shift in the way work is done, in the way the company interacts with customers, in the way advanced technologies come to life to solve real-world business and consumer problems. The fundamental concept of Digitizing is to transform how business works - both internally (decisions are made, how goods are produced, how work is performed) or externally (how it interacts with customers or end consumers) leveraging advanced tools & technologies. 

Companies have trying to leapfrog in the Digital maturity by embracing newer technology based solutions. 

Example 1: JP Morgan Chase had announced a few years back (2018?) the launch of 1,000+ bots to automate the work. It was one of the pioneers (although many companies had tried their hands with it prior to this , but had not scaled). However, after automating routine work, there has no further transformation (not sure where it lost the steam or what hurdles stopped it from further expansion). Again, it goes to the fundamental question of "Does implementing RPA bots get you to the "Digital nirvana"? (answer is "No"). 

Example 2: IBM  developed a blockchain based Accounts Payable solution, a revolutionary idea (with huge investments) and presented it as a case study in one of the conferences in 2019. When asked how many companies had they implemented - the answer was One (IBM). I think IBM was too ahead of the curve in launching highly complex solution to a relatively simpler process 

There have been good examples of successes of applying Digital solutions, but no large (i.e, Fortune) company has been able to achieve an end to end Digital transformation. It will need many years to get there and will require "reimagining" the entire operating model. 

Having worked with a lot of Fortune 500 companies helping them craft Digital strategies over the past 7-8 years, I believe most companies are still scratching the surface with a piecemeal approach. 

Barring few exceptions, most companies are still trying to answer foundational questions around Digital and how they can stay ahead of the competition  

1. How can we change the core "Digital, ways of thinking" (note: this precedes "ways of working") ?
2. What portion of internal, production & distribution, and external facing processes can be digitized ? Will  50% or 75% be the right goal ?
3. What is required to achieve this goal ? How can we work together to achieve this goal ? 
4. What is the right operating model ? Should Digital be a separate organization ? Should Digital be part of IT?
5. Where should human (process) intervention be introduced and why?  
6. How should we empower Citizen led Digitization efforts ?
7. Should a technologist or a business person drive the Digital Agenda ?
8. .... 

The answers to these strategic questions along with a well established vision can help companies set a Digital agenda, execute on it, and leapfrog ahead of the competition.  

Restoration in progress , please come back soon for updates

After years of hiatus, I am back to writing with my strategic thoughts. Upcoming articles:


1) Startup ideas - What are the new problems that startups should aim to solve

2) Productivity / Efficiency - Missing in Tech Industry (Why FB, google have 50K engineers and still only getting incremental tech improvements)

3) How to avoid outsourcing, but still achieve the same benefits - Guide to Insourcing ?

4) Data is not the new Oil... It is the new "Natural Gas" (why companies are missing the mark)

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PS: All my old posts covering type of consultants, election economics in India, etc. will be restored in the next ~1 week

Why google is one of the biggest failures in history (from my 2014 article)?

(Old articles being restored - an interim excerpt from my article first published in 2014)

(Note/ this is an initial outline and also needs some of the fact base ,e.g. $ figures to be updated )

Internal investments line Google apps, voice, wave, google docs, maps, google drive, phones, tablets., laptops, chromecast, chrome, Wallet, Google+ and external buys like YouTube, Motorola, Orkut To name a few have all been big failures . Had each been independent / standalone companies , then each of them would have been shut down long back either by shareholders/ venture capitals or sold at a throw away price.

The total one time investments in all the internal and external failed missions could easily top over $50 billion (since 2003, estimated). Excluding some if the tightly integrated acquisitions like Adsense or successful ones like android, google has spent a considerable amount of money as investment without returns. The last 5 year returns(profits) from these investment would not have crossed $10B ( after excluding operating costs) and will possibly never break even in the coming decade(s)

One of the few successes,  apart from the search,  that I can give credit to is Android and gmail. Although I am not fully convinced on how well has google has been monetizing it. Possibly helped increase search revenues.

Why has google failed so miserably? My guess is it is to do with the lack of leadership to define and execute a strategy. The founders are still hard running after the next big thing and the next level of management might not be groomed or empowered enough to play a pivotal role.

A well executed strategy involves 4 components - vision, definition of the strategy, execution and  People/leadership. Most of the failed initiatives /investments from Google started with a great vision. However, evidently, Google has failed in the remaining 3 components of it's strategy . Without going into who was the reason behind the failure, it clearly shows that the leadership element is found lacking in most of the above cases, if not all.

Well, it's not all scary about google. Investments like android, NEST and the robotic firms like Boston dynamics could pay off in the future.

PS: All the opinions expressed are personal and not