By Richard Colter
Digital technologies – cloud, mobility, AI, IoT, DLT, analytics, mixed reality, and quantum (to name a few) – are transforming business, society, and everyday life. Business leaders are using these technologies to make profound changes to their business strategies, models, and operations; as well as to transform customer experience.
Though the transformation is already underway, economic and business trends are expected to drive continued digitalization through the next decade. Telecommunications companies inhabit an exciting intersection in this transformation, as foundational enabler and necessary user, or in other words both doctor and patient. This doctor-patient duality is Network Digital Transformation. Before we dive deeper into Network Digital Transformation and the implications for the telecommunications industry, let’s reach a common understanding of the general Digital Transformation (DX) trend and its enabling technologies.
What is Digital Transformation?
“Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture and customer experiences to meet changing business and market requirements.” Though carefully worded and precise, definitions like this generally fail to convey the meaning without a few examples (at least for me). Let’s take a quick look at how some companies are implementing DX.
Digitally Native and Digitally Adaptive Companies
Digitally native companies are the trailblazers that start using digital technologies from the outset to disrupt existing industries. Examples are easy to find, since the success stories, like those shown in Table 1, quickly become household names.
Market Need | Modified | Digital Technology | |
|---|---|---|---|
Amazon | Buy anything without having to go to a physical store (and so much more) | Drove E-commerce and is disrupting brick-and-mortar stores | Mobile, cloud, AI |
AirBnB | A place to stay away from home; monetizing partially used living spaces | Disrupting hospitality industry | Mobile, cloud |
Strava | Fitness social, tracking and gamification platform | Augmenting GPS products | Mobile, cloud, data, analytics |
For most digitally native companies, software is a key technology fueling their innovations. Increasingly, cloud-native practices – containers, microservices, and Continuous Integration/Continuous Delivery (CI/CD) – enable a relentless pace of innovation, which established companies find hard to counter. Another key characteristic of these companies is a broader ecosystem where multifaceted business value is created. AirBnB creates value for the property owner as well as for the traveler seeking choice, value-for-money, and quality of experience in temporary accommodation. Amazon creates value for small business owners as well as for shoppers. Strava, a household name for avid runners and cyclists (I am one of the latter), enhances data from GPS devices to improve fitness tracking, social engagement, and gamification.
Digitally native companies are disrupting entire industries, driving a wave of corporate relegation (from leading indexes) and in some cases, extinction. To adapt to these new realities, existing companies are planning how to transform using digital technologies, making them “digitally adaptive.” Fujitsu surveyed 1614 C-suite executives and business decision-makers and found that this adaptive transformation is under way on a wide scale; 89% of organizations have projects in progress. Given the breadth of possibilities for digital transformation, you have no doubt encountered it in your daily life. Table 2 provides a few examples of existing companies adopting digital technologies and adapting to new market realities.
Market Need | Transformation | Digital Technology | |
|---|---|---|---|
Starbucks | Reduce purchase friction, grow same-store revenue | Mobile apps to preorder and pay | Mobile |
Disney | Dominate Long, long agos and once upon a times | Disney+ streaming, theme park wristbands | Cloud, mobile, analytics |
Many Companies | Lower costs, improve customer experience, online self-service | Self-service checkout, delivery and e-commerce | Cloud, mobile |
Digital Technology and Outcomes
Digital technologies are not new. Many of them have existed for decades, and even become central plot devices for dystopian plotlines, SkyNet and HAL being notable examples. Nevertheless, advances in both computing power and software have been implemented quickly by early-adopting companies to develop innovative use cases. Widespread digitalization paves the way for digital transformation to usher in the digital economy.
Here’s a quick overview of a few leading digital technologies and the outcomes they are helping to deliver.
Cloud: Virtualization, microservices and containers change physical devices into shared, virtual workloads running on a distributed and shared infrastructure. Cloud technologies are a critical foundation for rapid and cost-effective DX projects.
Mobility: With wireless networking and devices all but ubiquitous, people and increasingly machines are free to interact anytime and anywhere. Beyond corporate Wi-Fi networks, public and private 5G services promise to enable more sophisticated monitoring, real-time control, and mixed-reality use cases.
Internet of Things (IoT): Low-power sensors and wireless connectivity change how we monitor and understand real-world environments. The IOT gathers the high-volume inputs needed for data-driven insights, digital twins, and closed-loop control systems.
Distributed Ledger Technology (DLT): DLT is replicated, shared, and synchronized digital data, geographically spread across multiple sites, countries, or institutions (e.g. Blockchain). DLT has great potential to deliver secured transactions and data sharing.
Artificial Intelligence (AI) and Analytics: These technologies use computing power to automate tasks or create insights and correlations from vast amounts of data.
Mixed Reality: Virtual and augmented realities enable low-risk simulation, real-time performance enhancement tools, and other ways to improve productivity and/or outcomes.
Quantum: By solving massive combinatorial problems in a fraction of the time required by traditional computing technology, quantum helps to optimize resources, lower costs, and increase efficiency.
These technologies are increasingly delivering DX outcomes across all industry verticals. Given the breadth of industries, these outcomes are as varied as the companies implementing DX. Some common themes crop up, however. These include modernization, automation, customer experience and increasingly, how to address sustainable development goals.
Network Digital Transformation Opens up a World of Possibilities
Due to the breadth of DX possibilities, projects must be clearly defined as well as guided by and linked to corporate strategy. Each project has far-reaching potential impacts – structure, training, culture, etc. – and requires executive support and commitment to be successful and yield a healthy return on investment. In many ways, DX is an evolutionary journey that involves multiple steps and changes.
In the next blog, I will discuss how telecommunications companies are simultaneously digitally transforming their own operations and providing critical services to aid other companies in their own Network DX journey.