Adapt, innovate, transform or disappear – The digital era is here
The digital revolution is moving fast and stimulating massive disruptions and transformations in industry after industry. Already, more than a quarter of the entire population of the world owns a smartphone. In 2014, global mobile data traffic reached 2.5 exabytes per month — that’s 2.5 billion gigabytes, a figure that is 30 times larger than all of the traffic on the Internet back in 2000.
This level of connectivity is inevitably transforming how companies reach out to consumers, as well as to their business customers, partners, and suppliers. Companies in virtually every industry now understand just how much the digitization revolution is transforming the competitive landscape, and are preparing to participate in this brave new world, not just in their interactions with customers, but internally as well. Basically, the demands of digitization will ultimately force companies to transform virtually every aspect of their business.
According to the most recent Cisco report, the digital landscape within the private sector has changed dramatically over the last three years. This report outlines the global value of digitization in the coming decade and highlights where to start driving digital value. Here are some key insights that caught my attention:
- Six industries – manufacturing, financial services, retail, service provider, healthcare, and oil and gas – will account for nearly three-quarters of the total private sector Digital Value at Stake globally from 2015-2024
- Digital adoption is accelerating – 95 percent of Fortune 1000 companies expect to undertake a digital project by 2017
- Cybersecurity is essential to digital success, with the potential to fuel an estimated $5.3 trillion in private sector Value at Stake over the next decade. Sixty-eight percent of this value is tied to firms’ ability to integrate cybersecurity into their digital foundation to drive innovation and growth
- Digital value increasingly comes from consumers – Consumer-focused digital solutions such as telehealth, wearables, and pay-as-you-drive insurance represent a significant portion of Digital Value at Stake across industries
- People-centric connections (person-to-person, person-to-machine) will drive 64 percent of Digital Value at Stake in the private sector over the next decade, reflecting the companies’ increased ability to combine the “people” and “process” elements of digital business with the “things”
In order to maximize digital value, businesses must first determine where they are on their digital journey. First, they need to enable IT agility and operational effectiveness, then they need to use digital technologies to differentiate their strategy through new products, services and business processes. And finally, companies need to exploit digital capabilities to re-create their industry with new business models.
Companies that are able to adapt and master continuous product innovation have big advantages:
- Substantial reductions in the time it takes to make critical product enhancements
- The ability to test new ideas rapidly and with minimum resources
- Improvements in quality, reductions in errors, and greater reliability
- Large decreases in costs by eliminating the waste of fully developing features that fail in the market
- Rapid revenue increases from products that are continually on target, with more and better features, or functionality, every day
The rise of digitization is shifting the way companies operate and the technologies they use to interact with customers, partners, and suppliers. Until recently, they struggled to take a truly integrated approach to the relationship between technology and the business. Now, however, all kinds of technologies, from big data to social networking to advanced mobility, are coming together and driving the need for every company to prepare for the digital future.
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