The Digital Environment Today

In virtually all industries and across both the public and private sectors, we are seeing major disruptions in how people, businesses and governments interact. In the Middle East, there are also challenges in securing growth in with slower-growth economies, and we see cost optimization and talent recruitment often disrupted by new regulation. New modes of interaction across the digital landscape, leveraging total automation and cognitive technology, have become normal operating conditions at an accelerated rate.

The result of these rapid changes in social, mobile, analytics and cloud technologies is a convergence of previously segregated modes of doing business. Whereas before, there were stricter demarcations between the worlds of Business-to-Business (B2B) and Business-to-Consumer (B2C), high levels of integration and standardization through digital, cognitive and ubiquitous data has created an ecosystem that has become known as the Everyone-to-Everyone (E2E) economy. 

E2E enables a new level of customer-centricity. It is characterized by seamless, connected experiences and increased collaboration between consumers and organizations across multiple value-chains: co-design, co-creation, co-distribution, and so on. Trust and transparency – powered by technologies such as Blockchain – underpin this relationship, while communication flows in both directions. E2E will have a profound impact on value creation and allocation for virtually all companies in the future.

New Challenges for Businesses

With this rapidly changing environment, businesses are being presented with a unique set of challenges and opportunities. Meeting ever-changing customer expectations is essential to remaining competitive, and to do this, companies must master this new, integrated digital landscape.

Like any transformation, this presents both potential threats and benefits, depending on how organizations respond to these trends. At IBM, we have witnessed an acute awareness from our clients about the importance of being on the right side of this disruption curve. A common scenario sited is that businesses want to “Uber” rather than be “Uberized”.

To achieve this, companies need to be dynamic, developing creative and vibrant roadmaps for the future while maintaining and continuing to improve their current market performance. They will need to undertake full-fledged digital transformation across all aspects of their business. Customer engagement will need to be reinvented along the multiple touch points offered by the digital and social consumer lifecycle. Core processes need to be redesigned to leverage cognitive capabilities, deep analytics and applied insights. Lastly, businesses will need to innovate and migrate application suites and broader technology architectures, leveraging the flexibility and agility of the cloud.

Developing New Capabilities

To meet these needs, businesses will have to invest in a comprehensive end-to-end redesign of their digital architecture and operations. Thus far, many have been content with piecemeal additions and updates, however that has now become untenable, and although more economical in the short-term, is ultimately doomed to failure. In order to achieve this reinvention, businesses must:

  • Engage in digital business strategy, by design: Digital strategy should no longer be an ad hoc, episodic addition to overall business strategy, but the heart of it. Businesses will need to use design-thinking and agile approaches to strategize development and foster a culture change that recalibrates interactions across the organization. This is the bedrock of a digital transformation strategy that will allow companies to succeed in innovation-intensive environments.
  • Infuse cognition and emerging technologies into enterprises and core processes: Cognitive insights and approaches to core processes allow businesses to better create and reengineer their operations, utilizing new technologies such as IoT and Blockchain. Deep analytics and big data assets will need to be enlisted in order to provide the types of insight and effectiveness required to bring process re-engineering and configuration activities together in enterprise application implementation.
  • Modernize the core through integration and innovation: Businesses need to integrate the processes of enterprise application implementation, migration and management. This is best done through cloud-based solutions, enabling businesses to operate core processes in a streamlined, deeply responsive manner.

 

Going Forward

For companies to respond to these challenges and implement solutions going forward, several steps are required.

The first involves opening up to external influences through deeper insights, embracing digital natives, and inviting collaboration with consumers. The second is all about connecting to new ecosystems and partners. This means reaching beyond product parameters to find new opportunities, using the cloud to connect people and organizations, and creating an ecosystem of partners that contribute to your reinvention.

The third step requires investment in digital mobilization across the organization, by appointing digital torchbearers, uniting business units towards your reinvention mission, and pursuing constant innovation.

Digital Reinvention™ begins where strategy, creativity and technology converge – an environment IBM created for clients when we opened our Studios and set Garages across the world where we use Design thinking and agile methodologies to reinvent our clients’ businesses. If new and better customer experiences are fundamental to remaining competitive, businesses need a test bed to safely create, tweak and fine-tune ideas.

We have reached a fault line regarding digital transformation. It is not simply about adaptation, but total reinvention. Despite the challenges, this environment offers businesses unparalleled opportunities to create and innovate. In order to guarantee success, companies must ensure that they serve as the distruptors, and not the distrupted.