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A Simple Visual History of Digital Transformation

Since the Mosaic Browser helped introduce the internet to the world in 1993,

we have experienced an accelerated digital transformation of business. We

had digital activities in our organisations before. We had already spend

almost 50 years computerising processes. However, the digital connectivity

of the internet began more radical change. Here’s a simple graphical

reminder and some examples of elements of that journey.

We began by creating digital channels to connect our organisations to their

customers. The website began with simple digital brochures and basic

contact information. Very quickly our websites became richer and more

valuable. Innovation began outside the organisation that showed the way for

all subsequent phases of digital transformation with start-ups like

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Amazon.com, Google.com and others

We added processes to support the customer interactions. In many cases

these processes were new, partial and designed solely to support the new

digital channels. For example, websites, early internet banking platforms and

e-commerce platforms were largely standalone and largely handcrafted.

We saw potential in these digital processes and started to apply them more

widely. These processes worked in the midst of our legacy process and often

in unconnected ways. For example, ecommerce activities often used entirely

separate customer management, inventory and logistics and payment

processes to the core business.

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As the breadth of our digital channels expanded and we needed to manage

new social and mobile channel needs, we needed a dedicated digital team to

manage the expanding offering and to help integrate the core digital

processes and infrastructure required to support growing digital ambitions.

Organisations began to hire Chief Digital Officers. Organisations were

responding to the creation of Facebook, Twitter and other social channels

and the potential of apps on iphone and Android mobile platforms.

With a digital team to advocate and lead the way on growing digital

opportunities, we saw digital interaction takeover much of the electronic

communication in the organisation and new integrated digital processes

develop in supply chains, shareholder & community management and other

forms of stakeholder engagement. APIs began to standardise digital

communication formats in an increasing way for organisations. Organisations

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could leverage vast amounts of data on interactions and increasingly on

activity across the organisation. Examples include supply chain integration,

procurement systems and authorization APIs.

With digital interactions dominating & pressure to focus on core business

activities, organisations began to become more aware that they operated in

digital networks, connected to customers, suppliers and other stakeholders.

Importantly, it became increasingly obvious that these networks connected

all stakeholders reducing transaction costs and increasing transparency.

Most dangerously these networks & data flows gave competitive advantage

to those most able to leverage digital technologies in disruptive ways.

Ratings and price comparison sites were just one example of this new

transparency and connection.

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Seeing potential in connectivity, new and existing organisations saw the

ability to focus on platforms that connected system players, creating new

value and disrupting the traditional business of intermediaries. These

platforms were increasingly agnostic of whether they ran on a computer, a

phone or another device, giving them greater geographic and temporal

reach. We began to connect all processes & devices into networks to

leverage the power of information. Concepts like employee, contractor,

supplier and customer had less secure meaning in a networked world as

chains of connectivity ran in all directions & right through the organisation.

Examples include: eBay, Airbnb, Uber, Etsy, Alibaba, Salesforce.com,

Microsoft Office365.

With platforms and networks running through and beyond the organisation,

people began to explore the opportunities in new ways of working using

digital. The boundaries of organisations no longer constrained the

boundaries of work. Seeking to retain talent, leverage information more

effectively and create greater agility, organisations experimented with new

digital ways of working and organising work. Examples include Task Rabbit,

Sidekicker, Atlassian, Expert 360, Change Agents Worldwide and many more.

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Where Next?

This digital transformation has only just begun. There are many more phases

ahead. The innovations and experiments of organisations will take us even

further into exploring the potential of globally connected digital networks.

Prediction is very difficult, especially about the future - traditional Danish

saying often attributed to Nils Bohr

Make any predictions on digital transformation and you can be sure that

someone is currently working to undermine your credibility. The following

suggestions for the future of digital transformation are offered on the basis

that these are ideas that exist already

“The future already exists but is not yet widely distributed” to quote from

author William Gibson.

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As the costs of digital connectivity and computing power fall, these

capabilities are being added to more and more devices. The internet of

things has reached our homes and our workplaces. The increased ability to

gather and use information in real time will drive new innovations in our

businesses and our lives. Examples include Fitbit, Nest, RaspberryPi and

many more internet of things applications.

Add enough digital connectivity and computing power and you have created

the potential for a mesh of sensors, connectivity and processing power to fill

our environments. Now our digital things and our communication devices

can be in constant contact and new applications will be developed to take

advantage of the rich digital environment.

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The digital mesh will help accelerate digital automation as many traditional

roles of knowledge workers, such as the gathering, digesting and processing

of information now flow from an ambient mesh and are managed through

algorithms and their managers. Examples include Watson, the evergrowing

Google algorithms and many new predictive and analytical algorithms

leveraging big data and machine learning.

A digital mess also enables the greater leverage of bots, digital agents that

can navigate the mesh and achieve outcomes for their owners, clients and

masters. These algorithms take on the role of making local decisions or

acting as advisers or facilitators across the breadth of the networks. Digital

Agents help manage the scale of information and the real time demands of

the mesh. Examples include personal agents like Siri, Cortana and Alexa and

also the rise of chatbots in applications like Slack.

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Distributed and connected computing power also enables us to revisit

concepts of how we record, store and share information on concepts like

ownership, identity and history of transactions. Instead of a single ledger

located in one location, the transaction history can be distributed and

validated across the network, as in blockchain. Innovations will build on

these capabilities into new domains. Current examples include Bitcoin,

Blockchain ledgers in financial services and Ethereum.

The digital mesh increasing can enable individuals by supplying capabilities

need for individuals to have greater awareness, connection or to do work

that was previously beyond the capability of a single individual. If an

organisation is a solution to transaction costs as Roald Coase suggested,

there are new implications for the role and future of our organisations and

the growing capabilities of the digital systems will shape the work individuals

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will do (or don’t do).

We have not yet begun to explore the potential of extending this digital mesh

and its capabilities to the entire world. We can already see new approaches,

such using e-commerce villages in China, video in education in India, market

pricing data for farmers in the third world or MPesa mobile payments in

Africa. As the costs of digital technologies fall and reach expands new

entrepreneurs will solve new problems for those beyond the reach of this

technology today.

What are you planning to do to leverage the capabilities of a digitally

connected world?