Evolving to a Digital Business Model – What Does It Mean?
In today’s digital-focused culture, it is essential for organizations to enhance their technology in order to provide the best customer experience. Technology vendors are on the same page as they continue to expand their tools, and businesses find themselves revisiting their technology strategies and evolving to a digital business model. Digital business is not a one size fits all process – organizations will have different structures, processes and innovation methods – but it ultimately means a better customer experience and revenue growth. In our first annual Digital Business research, IT decision-makers stated that digital-business means the ability to enable worker productivity through tools such as mobile, data access, AI-assisted processes; better managed business performance through data availability and visibility; and meet customer experience expectations. These align very similarly to how IDC defines digital transformation and its connection to the 3rd platform.
IDC defines digital transformation as “the application of third-platform technologies to fundamentally improve all aspects of society; for businesses, this means transforming decision-making with technology.” These 3rd platform technologies are mobility, data/analytics, cloud and social and they are advanced by innovation accelerators which include, but are not limited to, Internet of Things (IoT), AR/VR, and Artificial Intelligence (AI). At the 2018 IDC Directions conference, Frank Gens, Senior VP & Chief Analyst of IDC, discussed that the 3rd platform has the same big picture; however, it is now in its second chapter. Unlike the first chapter where innovation was siloed/isolated, the second chapter unleashes “multiplied innovation” through platforms, data sharing, AI, blockchain, and a diverse cloud services model; to name a few. Competition becomes platform and ecosystem-based rather than company-based in the first chapter.
The technologies and platforms established in the first and second chapter of IDC’s 3rd platform resonate with our research findings. According to our digital business study, 89% of organizations have adopted or have plans to adopt a digital-first business strategy – with their main objectives being to improve process efficiency through automation, create better customer experience and improve employee productivity. IT decision-makers plan to achieve these goals through the use of various technologies that they either already have installed or are in the works. The top technologies being actively researched or piloted fall within the second chapter of 3rd platform – 56% artificial intelligence, 55% machine learning and 50% IoT.
When looking at the top technologies that are currently in use, they are the foundation of the 3rd platform – data/analytics, mobile technology, private cloud and public cloud. These are also the tools that are helping to drive the most revenue growth. IT decision-makers who have noticed revenue growth due to digital business state that their top technologies in place are data/analytics (70%), mobile technology (67%), private cloud (63%), public cloud (55%) and APIs/embeddable (54%). Less that half of IT decision-makers who have not noticed revenue growth have these five technologies in use at their organization. Through the use of these core technologies, which are ultimately advanced through “innovation accelerators,” organizations have a positive projection to achieve success/revenue growth due to digital business. Learn more about how organizations are evolving to a digital business model by adopting new technologies, changing structures and processes, and innovating to provide a unique customer experience in IDG’s 2018 Digital Business Executive Summary.