By Jim J. Spiegel
As we’ve covered in previous articles, digital transformation is challenging to visualize as its impact can be very broad. In Part 3 of the series, we will reference a few case studies reflecting the immense value found through digital transformation and how the results were measured. These examples illustrate that business operations and customer experience changes are hallmarks of a great digital transformation.
In 2007, Forbes Magazine infamously released a cover image of a businessman holding a Nokia phone to his ear with the caption, “Nokia One Billion Customers – Can Anyone Catch the Cell Phone King?” At that time, Nokia, Samsung, Motorola, Sony Ericsson and LG represented 90% of the global mobile profits. In 2007, Apple had less than 4% of the market share in desktop operating systems and none at all in mobile phones. Apple was able to kickstart a transformation of the mobile phone market with the release of the first iPhone in that same year. In a Harvard Business Review article in 2016 titled, ‘Pipelines, Platforms, and the New Rules of Strategy,’ authors Van Alstyne, Parker, and Choudary point out that by 2015, the iPhone had singlehandedly generated 92% of global mobile profits. Developers produced 1.4 million iPhone and iOS apps generating $25B for developers. This digital transformation use case certainly transformed Apple and the mobile industry as a whole, but it also changed every customer’s understanding of how mobile devices work today.
What can we learn from this massive success? And how can those learnings be applied to broader digital transformation objectives? The article points out that Apple exploited the power of platforms to leverage the new rules of strategy created in this digital age in which chief assets are information and interactions. Apple conceived the iPhone and its operating system as more than a conduit for a service.
Digital transformations are seeking to achieve a similar result. Connected and harmonized databases provide more value to users than the sum of their individual parts. Digital transformations can be analogized to platform revolutions that offer enhanced value compared to their traditional pipeline business predecessors. Consider the vast number of online services available today through user login credentials to access some form of data. Almost every organization in the world has some level of employee engagement with these services daily. Each login executed is similar to an interaction with a traditional pipeline business. A majority of digital transformation strategies seek to minimize these interactions. Many organizations aim to provide employees, customers, or both with their own version of iOS if you will.
There is extreme value in unlocking information to drive user innovation for organizations and entire continents. In a 2022 TechCrunch article titled, ‘New Report Examines Africa’s Growth in the Digital Economy and VC Investment Landscape,’ Africa’s $115B digital economy is expected to reach $712B by 2050. The continent’s digital journey is in its early phases, with 33% of individuals using the internet compared to a global average of 63%. There is a strong positive correlation between internet access and employment opportunities. The primary takeaway of this report illustrates the value of digitally connecting ecosystems and users in a way that fosters a culture of innovation through the collective usage of digital assets.
The same connectivity benefits can be seen on an organizational level to maximize the value of digital assets. Research and development teams can utilize failed test data to strengthen machine learning models in informatics software. Sales and marketing teams can run regression modeling to quantify how a physical property impacts profitability. Product development teams can compare test results with regulatory audits from anywhere globally. With consistent access to the organization’s complete data, individual tasks are not limited to only local information. Digitization makes each decision more efficient and informed.
The roadmaps to digital transformation follow a similar path paved through the platform revolution. Traditional pipeline data solutions, or point solutions, are being integrated into centralized data structures that will continue to connect team members and customers in ways that are difficult to predict just a few years in advance. But what remains very clear is the importance of embracing the digital transformation journey across organizations, vendors, and customers alike.
Resources
- Pipelines, Platforms, and the New Rules of Strategy (hbr.org)
- New report examines Africa’s growth in the digital economy and VC investment landscape | TechCrunch
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