How can your company ensure a successful business transformation?
In my most recent post, I wrote about the way that the digital transformation of businesses around the world has had a disruptive effect on the market.
Leaders of major companies are being challenged as the physical business-fulfillment model that has been the norm for more than 200 years is replaced with its digital offspring.
Take Kodak, for example. In 1976, according to The Economist, Kodak commanded 90 percent of film sales and 85 percent of camera sales in the US. In 1975, it also developed one of the world’s first digital cameras – the invention that would lead to its ultimate demise.
Kodak filed for bankruptcy in 2012, and the main reason it was forced to do so was that it failed to remember its core business of enabling mass-market photography. Physical realization of the core business promise will not survive in the transformation from physical to digital, and companies that cannot disconnect their future from their physical representation of the past will fail.
The same is true for newspapers, the music industry and the film industry.
The key lesson for all to understand is that there are substantial differences and dependencies between core business and physical production.
While some industries and companies struggle with the transformation from physical to digital, other companies seem to be doing very well. Amazon, Apple, Facebook and Google, the companies that Carl Howe of Yankee Group calls the Four Horsemen of Mobility, now have a combined market capital of more than USD 960 billion, and they have settled into three categories. Amazon and Google are each making billions of dollars every year from mobile devices, Facebook continues to struggle to find a way to do the same, and Apple, as Howe notes, is earning more on mobility than the other three players combined.
These four companies are all able to achieve growth while executing their business strategies because they understand where their core business lies and what complements their core business growth.
It is imperative to understand what your company’s core business is, and then to understand how the core business can move into the next generation of competition by leveraging new technology.
Successful business transformation, regardless of industry, will depend on the same set of basic elements:
• an understanding of the core business and its complements
• the containment of existing business operations and processes
• the creation of new business operations and processes
• the capability to rapidly carry out business strategies in a way that maximizes the disruptive value as well as the cost structure and time to market created by the exponential technical advances that are under way
• and on the success of the resulting real-time data-driven business operations and business processes.
Predictable performance-driven delivery of digital capability will be a building block for next-generation competitiveness. Such delivery will be combined with security, integrity and transparency to business need and price point.
The future’s most successful businesses will be the ones that do business with the greatest clarity on the above points and that can make the best data-driven decisions in as close to real time as possible.
We call this end-state the Networked Society.
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