Ready or not, Canadian businesses: the age of digital transformation (DX) is upon us. Those that already understand this reality are the ones ahead of the curve — and enterprises just coming to grips with this concept are already playing catch up.
That was the main idea put forth in a recent ITWC Webinar titled Digital Transformation: Innovation and Implications for Canadian Business. Hosted by ITWC CIO Jim Love and sponsored by national communications company Telus Corp., the session outlined the reasons why digital transformation (DX) is more than mere buzzword, and why adopting a DX strategy makes strategic business sense.
For the uninitiated, digital transformation or DX is the application of third platform–related technologies — including mobile, big data, social business, the Internet of Things (IoT) and the cloud — to fundamentally change the way something is done, generally with a design-led approach.
In particular, it’s about understanding that in today’s digital world, every business is in the technology business regardless of industry sector. And as jaded as business executives and technology decisions makers have become, the transformative impact of DX is “profound.”
“Underestimating what’s happening here would be a fundamental mistake…DX is more than an evolution, but how (organizations should now) conduct business,” said Love.
Why digital transformation is the now and future thing
IDC notes the third platform represents millions of apps, billions of users and trillions of things — and a DX strategy can be a key to business success. It’s a forward-looking business mindset where technology is viewed as a key source of competitive advantage and fundamentally changes how IT is managed and funded, according to Tony Olvet, group vice president of the research analyst team at Toronto-based IDC Canada. According to Olvet, DX is an innovative business approach in creating, selling, delivering, or consuming products or services with increased agility, flexibility, and scalability.
Citing IDC stats revealing that by 2018, 60 per cent of new applications will be “mobile first” and that worldwide spending on digital transformation (DX) technologies will grow to more than $2.1 trillion in 2019, Olvet argued that taking advantage of DX means greater business flexibility and faster time to delivery.
Think of DX as both industry opportunity and disruption, added Olvet, pointing to a recent IDC Canada top executive survey that revealed 78 per cent of executives believed technology will create new areas of opportunities — allowing organizations to enter into new market spaces — and 59 per cent agreed when asked if technology is a disruptor which will require a rethink to stay relevant.
Olvet cited real-world examples of DX in action, including organizations like coffee company Starbucks Corp. (as an early mobile adopter, currently 20 per cent of sales comes via its mobile app) and the Canadian Imperial Bank of Commerce (CIBC), Canada’s fifth-largest bank (currently undergoing a shift to digital usage by customers and has boosted overall sales via digital channels from four per cent to 18 per cent).
From the perspective of David Kozicz, vice president of business solutions product development and product marketing for Telus, DX as industry disruptor fosters a palpable sense of excitement around the possibilities and opportunities available to Canadian businesses. DX is a multifaceted approach, one that encourages Canadian businesses to act as digital players, blending physical and digital experiences to leverage real-time information and predictive analytics for a competitive advantage, said Kozicz.
“There’s a lot of movement in this space,” he added.
The keys to a successful digital transformation approach
Indeed, think of DX as a journey and not a destination, the webinar speakers agreed, one where those “at the start” or “in the midst” of the journey are more likely to be looking over the shoulder and concerned about “disruptive models in how business is done.”
The webinar session also identified the key steps in developing a successful DX strategy:
- Prepare for rapid change as digital transformation will impact all industries
- Establish a DX plan and socialize across the organization
- Ensure lines-of-business and IT are working together on strategic IT initiatives
- Balance both cost (in these uncertain economic conditions) and innovation at the same time
- Seek scale and innovation inputs from partners (e.g., 3rd platform vendors, institutions, incubators)
Specifically, this involves a rethink of technology resources, shifting away from a centralized IT department to one where there is “widespread integration” between IT and line-of-business units and where data plays a key role in adopting innovation accelerators such as IoT technologies. In addition, working with a technology partner to assist with this DX journey is a major key to success; according to IDC, three-quarters of organizations are currently looking to vendors to help innovate.
Encouraging greater collaboration and dialogue always makes good business sense but particularly so in developing a DX strategy that succeeds, offers Kozicz.
“Grow into becoming disruptive…talk to your customers and your stakeholders,” he said.
Added Olvet: “Canadian companies, while known as a midmarket economy, need to get on board even faster than the multinationals.”