Nokia CEO, Stephen Elop ended his speech saying, “we didn’t do anything wrong, but somehow, we lost”. Upon saying that, all his management team, himself included, teared sadly. (Microsoft acquired Nokia for USD 7.5 Billion) He was right Nokia did not do anything wrong but the world changed too fast and the message was loud and clear “change and change often else be changed” Nokia was slow at change. During its peak period
- Nokia had a market capitalization of around USD 203 Billion
- Held 41% share of the handset market at its peak in 2007
- Pride of Finland that contributed major share of meaningful employment and country’s GDP
In this post, Digital Transformation and Digital disruption are used interchangeably and for the sake of clarity – Digital Transformation is internal whereas Digital Disruption is an external force. ” Digital Transformation is the rapid pace of business model change driven by customers and leveraged by innovation technologies.” I have chosen this topic “Digital Transformation – Trends that are impacting our Jobs”because of two distinct reasons. Reason # 1: In the past two months have attended four events in Dubai wherein founders of large enterprises spoke passionately about Digital Transformation and how they are getting ready for the Tsunami of Digital Disruption. Reason # 2: Digital Disruption is disrupting Jobs, Business Model, and Social Fabric. Lesson to learn is
“ Advantages of yesterday will be replaced by trends of tomorrow”
“You may be the first mover but the fast mover will take over“
For example, Amazon the fast mover in Cloud computing and now fighting head on with Walmart has bought over a chain of popular grocery stores with a Whole Foods deal for $13.7 billion threatening Walmart lead in Retail. Let’s observe few other market journeys impacting business and social fabrics.
- If you step back in time in 1790 – 90% of the US workforce was engaged in agriculture. Fast forward 2010 only 1% of US workforce is engaged in agriculture and they are producing phenomenally more for a phenomenally large population.
- Amazon in the first year introduced 24 innovation in its Amazon web Services business, Fast forward 2016 Amazon Web Services introduced exponentially large number of innovations i.e 1100
- In 2016, 10 retail stores in Singapore were shutting down due to e-commerce. Such as www.wannagohome.com; www.francfranc.com; www.goodsofdesire.com
- Life expectancy is moving up. Human longevity Inc organization is working on Living healthier longer. Increasing Life Expectancy is impacting Japan economy. It has one of the highest aging population as a consequence Japan Olympic 2020 is finding a gap in young labour workforce – which is eventually being filled by robots. Similarly, Australia also has a high proportion of the aging population and consequently short of young population to mine countries rich natural deposits. This gap will be filled by robots
- 50% of the Fortune 500 in 2000 does not exist in 2016. They have either gone bankrupt, acquired or ceased to exist. Such as Kodak – Bankrupt, Nokia, and Yahoo acquired. Blockbuster cease to exist.
- Artificial intelligence will replace 50% of the current jobs by 2025. It’s forecasted that by 2020 1 million sales jobs would be replaced by AI. Fast food chains including Starbucks, MacDonald’s are replacing front end jobs with robots, Paralegal work is being done by AI. Drivers are being replaced by autonomous cars. 80% of the contact center jobs would be replaced by BOTS by 2020. In the last six months, the jobs scare has triggered countries like United States, New Zealand, Australia and Singapore to limit hiring from India and other countries.
The Digital revolution began in 1960 with the internet and thereafter came the cloud movement wherein innovation leader Salesforce set the cloud technology ball bouncing. Earlier technology progress was explained by Moores law that every 18 months the CPU power doubles at the same cost. In the current time, Moores law is defunct since its now considered linear whereas Digital Disruption is happening at an exponential pace. It’s no more 10% but 10X Growth. The government of Dubai has launched 10X initiative in Feb. 2017 to lead the pace of change.
- If you step back in 2006 – top 4 largest market capitalization companies were from Oil and Finance sector. Fast forward 2016 top 4 markets capitalized companies’ slots is occupied by technology companies such as Alphabet, Apple, Amazon, Microsoft, Facebook and so on. Data is oil and intelligent data is petroleum.
- Oil companies like Shell, BP, and Aramco are already diversifying.
- It’s estimated that Solar power could be world’s main energy source by 2050
- Let’s explore further. S&P 500 index company life expectancy in 1920 was 67 years and it has dropped down to 15 years in 2010. 75% of the S&P 500 index companies will be replaced by 2027. On an average S&P 500 index company is replaced every two weeks. (Source: Richard Foster, Yale School of Management)
What is Driving the Change?
- CUSTOMERS: Your customers are your biggest competitors they are driving the change. They want better experiences. New business models Like Uber, Airbnb, Netflix are creating a flow – no nonsense end to end flow of customer experience.
- CORE TECHNOLOGIES: Internet, Cloud, and Mobile are at the core of Digital Disruption. And then there are Innovation Technologies that have put progress on steroids. Currently, there are around 3 Billion people with internet access, 1 billion can’t afford, 1 billion don’t have access and around 2 billion have no awareness. Google and Facebook are working on serious projects to provide Internet access to all. Imagine when internet penetration jumps from 3 billion to 4 billion to 5 billion or 6 billion adding new minds, how it would impact the pace of Digital innovation? Prior to the internet, everything was dumb and not connected but with the advent of Core Technologies such as Internet, Cloud, and Mobility, everything is connected and intelligent.
- INNOVATION TECHNOLOGIES: Innovation technologies are the enabler such as Blockchain, 3D Printing, Virtual Reality, Augmented Reality, Artificial Intelligence, IoT
- COST: Cost is being driven down and innovation is being driven up. In 2016 – USD 1000 could buy you processing power of a rat’s brain. In 2023 USD 1000 will buy you processing power of human brain. In 2050 USD 1000 will buy you processing power of all humans on the planet.
How should business address the Digital Transformation?
- BE PREPARED and change your legacy mindset “If it’s working why change” or “why fix if it isn’t broke“ mindset will not work.
- EMPOWER PEOPLE: Empower employees and encourage employee advocacy. Empower customer from the first mile to the Last-mile.
- CULTURE: Create a culture of risk taking. Tata Conglomerate wanted to find out what is the DNA of global organizations leadership and they realized its culture of risk-taking. Tata introduced program “Dare to risk” wherein failures are rewarded. Google had 20% time policy that was further evolved in 2013.
- PROCESS: Digitize your processes right from the first mile to last mile of customer engagement.
- INNOVATION TECHNOLOGY: Develop internal skill sets on Innovation technologies.
- COMPETITION: Track your competition journey and where are they going.
- CUSTOMER DATA: your customer data is like the Oil. Clean it and extract intelligence out.
What are the Innovation Technologies?
IDC identifies four core technologies in the third platform and they are
- Cloud: There are primarily three types of cloud. Private, Public and Hybrid. Cloud enables the quick launch of business at a fractional cost.
- Social Media: such as Facebook, LinkedIn, Twitter, Instagram and so on. Social Media helps you understand how customers see you.
- Mobility: These are edge devices with edge computing. Mobility allows customers engagement the way they want it. For example, it’s estimated that in 2015 there were 1 Billion mobile banking users that will shoot up to 2 Billion in 2020
- Big Data and Analytics: This enables us to understand what customers are creating.
IDC identifies Eight Innovation Technologies
Artificial Intelligence: IDC defines cognitive/Artificial Intelligence (AI) systems as a set of technologies that use deep natural language processing and understanding to answer questions and provide recommendations and direction.
IDC’s coverage of cognitive/AI systems examines:
- Digital assistants
- Automated advisors
- Artificial intelligence, deep learning, and machine learning
- Automated recommendation system
- In Feb 2017 this year AI defeated the world Poker champion. IBM deep blue AI had also beaten chess champion in the year 1977. AI has also beaten Jeopardy champion in the year 2011. In 2016 Google AI beat the top players at the game of GO
Augmented Reality and Virtual Reality: Unlike Keyboard, mouse and touch; AR and VR are immersive technologies interface. Augmented reality is the integration of digital information with the user’s environment in real time. Unlike virtual reality, which creates a totally artificial environment, augmented reality uses the existing environment and overlays new information on top of it. Augmented reality is expected to be USD 120 Billion markets by 2020. Emirates – Dubai, the carrier is studying ways to equip staff with augmented reality glasses that display a passenger’s name and travel habits, allowing more personalized service, Virtual Reality is expected to be USD 30 Billion markets by 2020. Billions of dollars are invested by Facebook (Oculus), Google (Magic Leap), Microsoft (Hololens), Sony, Qualcomm, HTC and others in AR & VR that will lead to a new generation of displays, user interfaces and human experiences impacting business and social fabrics.
3D Printing: The 3D printing market is expected to exceed USD 30.19 Billion by 2022, growing at a CAGR of 28.5% between 2016 and 2022. It’s impacting every industry right from construction, food, Health, Manufacturing, and others. In the prosthetic sector, Dubai woman gets region’s first fully 3D-printed prosthetic leg
Internet of Things: Ashton coined the word IoT in 1999. And since then the Global Internet of Things (IoT) market reached USD 598.2 Billion in 2015 and the market is expected to reach USD 724.2 Billion by 2023. Further, the market is projected to register a CAGR of 13.2% during the forecast period 2016-2023 globally. The number of connected IoT (Internet of Things) devices, sensors, and actuators will reach over 46 billion in 2021
Blockchain: Blockchain story started in 2008 when Satoshi Nakamoto published the paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” It’s a trusted exchange platform to trade assets and every industry is impacted including Government, Banking, Hospitality, Legal, Insurance, real Estate and others. In 2016 Dubai government released a Blockchain strategy and announced that Dubai government will become paperless by shifting all transactions to Blockchain — an online encrypted database — by 2020.
“Adopting Blockchain technology Dubai stands to unlock 5.5 billion dirham in savings annually in document processing alone — equal to the one Burj Khalifa’s worth of value every year.”
Next Gen Security: IDC defines next generation data security as the recognition of the direct link between mastery of data and the ability to protect it. IDC’s coverage includes technologies at the precipice of disrupting traditional data security models and the transformation of existing data-centric security solutions for both structured and unstructured content. This includes:
- Encryption technologies
- Data loss prevention (DLP)
- User behavioral analytics (UBA)
- Supervision and monitoring
- Data tokenization and masking
I will add two more aspect that is Autonomous cars and Robotics. Check out Robotics from Boston Dynamics. Robotics is expected to play an important role in the human society with elderly care being off -loaded to robots including providing help at home. In Japan, you have robotics pet dogs that greet you when you return. As regards to the autonomous vehicle every technology and automobile company is working on it and many countries have launched pilots and announced firm roll outs 2020 onwards. This will directly impact drivers profession and transform our transportation experience. Dubai gets its first robot policeman.
Call to action – how should YOUas an individual fight the digital transformation.
- Don’t fight automation: Eventually, the repetitive task would be replaced. Hence shift away from jobs that are repetitive
- Develop and Hone human skills: Develop and hone human skills such as Creativity, Critical Problem Solving, Negotiation, Emotional intelligence, Questioning. Whatever can’t be digitized will be valued higher.
- Learn to Unlearn and Relearn: No learning no earning.
- Be the sponge: Absorb and practice innovation technologies.
- Have your industry foresight: Keep an eye what will happen in next 5 years and 10 years in your industry. Get ready for the future and continue doing what is necessary today.
- Mindset: Prepare your mindset that change is the only constant.
- Study Futurist: It’s their job that makes your job easier.
Finally, if your organization or you as an individual would like to pursue a proven process for innovation, check out kickbox from Adobe that helps innovators
Kickbox is a new innovation process that Adobe developed for its own use and then open-sourced so everyone can use it. It is both a process for individuals and a system for deploying that process across an organization at scale. It’s designed to increase innovator effectiveness, accelerate innovation velocity, and measurably improve innovation outcomes. It can also optimize innovation investments by reducing costs compared to traditional approaches.
Happy Digital Transformation