Everyone has become increasingly reliant on technology in the last year – whether to keep connections or to order goods online, businesses are also seeing the advantage of using technology to continue and progress their business. The World Economic Forum predicting that the value added by digital transformations across all sectors could be larger than £80 billion by 2025. While there are still skeptics of and seeing Digital Transformation as a buzzword, it’s becoming clear DT 4.0 may be the answer to business survival.
In thinking about digital transformation, organisations tend to view the challenge as an IT one, but we all know digital transformation goes well beyond technical considerations. It requires collaboration and alignment between key roles, such as business unit, division, finance and HR. Just think how far we’ve come since the invention of technology. Digital 1.0 gave way to numerous centralised server PCs during the 1970s, millions of client-server frameworks during the 1980s-1990s led the subsequent Digital 2.0 wave. Afterward, billions of cell phones during the 2000s prompted Digital 3.0. At present, we are moving towards trillions of devices connected with IoT and AI, transforming business models and setting out new venture opportunities. The next wave of Digital Transformation (DT 4.0) will be more swift and significant compares to its predecessor. The current consensus is that DT 4.0 is driven by five technologies, namely AI – IoT, Blockchain, Hybrid cloud, Quantum computing and Automation.
DT 4.0 also has settings that are best described as a combination of physical and digital. Physical products and machines may still be necessary, but the value could potentially occur with digital functionality overlaid on physical products. Or the physical products themselves could be transformed with digital functionality, such as sensors and software. Incumbents mostly missed the first wave of digital transformation because they did not fully grasp the significance and urgency of digital shifts. Bear in mind, the future is often a linear extrapolation from the past to the present and onwards. Businesses are becoming digital at a rate faster than could have been imagined, hence good leaders must confront the implications of the fast-approaching next wave which will profoundly change the strategic landscape.