The Cattedrale di Santa Maria del Fiore (also commonly known as Il Duomo di Firenze, or Florence Cathedral, Italy) is an extremely high calibre feat of engineering that transformed the engineering standards of the day. The dome of the church, nearly 150 feet across, was the largest of its time and remains the third-largest in the world to date. Interestingly, at the start of the construction project there was no viable technology to build the huge dome, which had been conceived architecturally, yet the highly ambitious project sponsors launched the project hoping that the right technology would appear at the right time to finish the dome. Their faith was rewarded – after a fairly long wait, they found Filippo Brunelleschi, who, using his great creativity and technical knowledge, engineered a unique solution that enabled the construction of the dome. The construction of the whole cathedral took almost 150 years.
This anecdote presents insights into innovation that are also applicable to digitalisation:
- Strong commitment and desire in spite of the challenge, and perseverance with an existing legacy.
- Organisational capabilities and a culture of learning and innovation that can handle change.
- New culture of interaction among all stakeholders, including customers, partners and employees.
- Affordable and readily usable technologies that allow rapid innovation and productising.
This section focuses on the last two of these points – i.e., how applicable technologies empower a new culture of interaction and rapid innovation relevant to digital transformation.
For many enterprises, especially legacy ones, digitalisation is both ambitious and transformational. Where should they go to find the technical capabilities they need?
Should they have to wait a very long time, as in the Florence Cathedral project, and rely on hope and luck to realise their digitalisation goals? Fortunately, in modern times great advances in a variety of technology areas have produced an abundance of affordable technologies necessary for digitalisation.
All businesses have two sides – the demand side and the supply side. The most valuable link in the food chain of a progressive business is the customer who demands or gets excited by certain products or services, becomes eager to consume them, and feels happy to pay for them, thus ultimately driving business transformation. The customer belongs to the demand side. Innovation in an enterprise’s offering or operating model also needs adequate support in relation to how the products and services are realised, i.e., internal and external capabilities to source knowledge or raw materials and manufacturing – these belong to the supply side.
Technologies relating to digital transformation deeply impact innovation in, and interactions with, both the demand and supply sides.
As the chart[1] displayed in the comic strip, most of the global population is now on the Internet, creating a highly connected network. Internet access is now very easy for most people and offers high bandwidth in most locations; availability of relatively cheap yet full-featured smartphones is also breaking down the economic barriers to rich mobile interactions between a business and its customers and partners. The number and variety of devices and sensors that are connected to and can be manipulated over the Internet (also known as the Internet of things, or the IoT) is on a sharp rise and is expected to reach 35 billion in less than five years. Human interaction over social media, facilitated by the ever-connected world and the events generated by and captured from the IoT and digitised business processes, are together producing enormous amounts of persistent and transient data in both structured and unstructured formats, expected to reach 35 zettabytes (1 zettabyte = 1 trillion gigabytes) by 2020.[2] Fortunately, technologies to handle such large amounts of data and to produce insights from them are also advancing equally rapidly.
This broad connectivity, together with rich mobility, has changed the way end customers expect to be reached and served by a digital business: marketing must have sufficient social media presence; time to market of new and improved products and services needs to be extremely short; consumption of products and services must be intuitive; the quality-to-cost ratio needs to be high; customer service must be proactive; and wherever possible companies need to become data-driven, gathering insights from traditional and big data, and making rapid decisions from such insights ultimately for the benefit of the customer, leading to competitive advantage.
Similarly, on the supply side, a digital enterprise must naturally adopt a very high level of automation, adequate mechanisms to quickly push useful innovation into production, and dynamic value networks with its partners and suppliers to deliver products and services efficiently and effectively. Employees must be digitally savvy and extra-responsive to customer feedback and needs.
An enterprise has available to it a range of technical capabilities to allow it to deliver on the customer’s expectations of a digital business, including: high-power and low-cost computing, storage, memory and networks; emergence of a wide variety of affordable sensors and devices; innovative user interface designs; advanced foundational and application software; big data and real-time analytics; and cognitive computing. The availability of technical capabilities over the Internet via fixed or mobile networks (known as ‘the cloud’) and a pay-per-use service model has essentially eliminated barriers to entry for the use of basic, standard and emerging technologies. With the IoT (i.e., connected devices), service requirements can be sensed and dealt with even before something actually goes wrong. And a cognitive computing platform with super-high-capability analytics, such as IBM’s Watson, which only a few years ago needed a million-dollar budget to gain access to along with expensive and hard-to-find specialists to set up, can now be used in an innovation experiment for just pocket money without any set-up requirements.
Of course, most of the above-mentioned technologies have been around for quite a while.
So, what makes the present time particularly special for technology drivers of the digital transformation? It is their availability to everyone, and also their highly economic pricing – anybody who wants them can have them.
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[1] Zickuhr, K., Smith, A.: ‘Who’s not online and why’, Pew Research Centre, 2013.
[2] Loshin, D.: ‘Business Intelligence – The Savvy Manager’s Guide´,Morgan Kaufmann, 2nd ed., p. 12, 2013.
