Digital Transformation PDF

Digital Business Digital Transformation IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 1 Learning Objectives  Recap: What is Digital?  Describe the reasons for “Going Digital”  Describe and distinguish the different phases of “G...

Digital Business Digital Transformation IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 1 Learning Objectives  Recap: What is Digital?  Describe the reasons for “Going Digital”  Describe and distinguish the different phases of “Going Digital”  Digital Enablement  Digital Optimisation  Digital Transformation  Identify examples of digital optimisation and digital transformation IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 2 What is Digital Transformation? IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 3 What is Digital Transformation? Source: https://youtu.be/QyGGjVTwc5U IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 4 What is Digital Transformation?  Conclusion: Digital Transformation can mean different things to different people! IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 5 Recap: What is Digital? "Digital" refers to the use of technologies to improve organizational processes, to improve interactions between people, organizations and things, or to make new business models possible. - Gartner IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 6 Recap: Examples of Digital Non-Digital Digital Physical Mail Email Physical Parking Coupon Parking mobile application Traditional marketing channels, e.g. Radio, Digital marketing channels, e.g. web, TV, Newspapers, etc. mobile/ social media applications, digital signage and kiosks Traditional retail, e.g. Shopping at physical E-commerce, e.g. Amazon, TMall, etc. shops IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 7 Reasons for “Going Digital” Source: https://youtu.be/xQXWq4C32EM IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 8 Reasons for “Going Digital” 1. Increasing Pace of Technology Change & Adoption  Pace of digital change & adoption is rising exponentially 2. Increasing Competition within the Industry & Adjacent Industries  Companies are under ever increasing pressure to compete digitally  Long established business models are being disrupted by “born digital” start-ups 3. Increasing Customer Expectations  Customers expect a good experience across all touch points, you must ensure their interactions are seamless and exceptional IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 9 IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 10 IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 11  Case Study: Kodak vs Fujifilm Read more: https://petapixel.com/2018/10/19/why-kodak-died-and-fujifilm-thrived-a-tale-of-two-film-companies/ https://www.digitaltransformationbook.com/fujifilm-a-successful-digital-transformation/ IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 12 Case Study: Kodak vs Fujifilm Source: https://www.youtube.com/watch?v=dqwAZKrc6vw IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 13 Case Study: Kodak vs Fujifilm Source: https://www.youtube.com/watch?v=7yuudKKoC5o&list=PLshVTbYjkaYzS_ygmT9LLQiYn1pqKChYF IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 14 Goal of “Going Digital” IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 15  What is Digital Transformation? Source: https://youtu.be/8Rb6fSaHmjU IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 16 Phases of “Going Digital” Digital Enablement Digital Optimisation Digital Transformation IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 17 (1) Digital Enablement  Process of implementing new technologies such as cloud services, mobile computing, etc. that digital business often uses  End up with a more digitally capable IT, but NOT a digitally optimised or transformed business  Usually occurs when IT wants to push new technologies forward, but is not supported by the rest of the organisation IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 18 (2) Digital Optimization  Process of implementing new technologies to optimise existing core processes without changing the business model  Involves doing old things in new digitally centred ways  The value proposition of the business does not change; it is delivered more efficiently IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 19 Goal of Digital Optimisation IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 20 (2) Digital Optimization  Example:  Improve productivity by reducing costs and increasing the efficiency of machines and employees  Improve customer engagement by using digital sales & marketing technologies (e.g. mobile, analytics, chatbots) to deliver more frictionless & relevant experiences  Improve existing revenue by using analytics & artificial intelligence (AI) to better forecast demand & supply, and to optimise process & promotions IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 21 (2) Digital Optimization COGS* : Cost of goods sold SG&A* : Selling, General & Administrative Expenses IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 22 Example of Digital Optimisation: DBS - THEN  Hardcopy application forms needed for opening of accounts, credit cards, personal loans, car loan, housing loans, etc… IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 23 Example of Digital Optimisation: DBS - NOW  Online/ Mobile application for opening of accounts, credit cards, personal loans, housing loans, etc… IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 24 Example of Digital Optimisation: SingPost - THEN  Buying of stamps, sending/collection of parcels, payment of bills, etc. have to be done at the Post Office – Fixed Opening Hours & Long Queues!  Parcel deliveries are usually done during office hours when nobody is home. IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 25 Example of Digital Optimisation: SingPost - NOW  SAM Kiosks allow users to buy stamps, pay bills, make ticket bookings, as well as top-up on a variety of pre-paid services 24/7.  POPStations allow online shoppers to have goods delivered to a collection point accessible 24/7, circumventing the need to be at home or workplace to receive parcel deliveries. IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 26 (3) Digital Transformation  Process of implementing new technologies to launch net-new digitally enabled products and services or pursue new business model.  Involves doing new things in new ways, e.g. offer new product/services in new ways, make money in new ways, etc.  Create new value for itself & its customers with the intention to cause or adapt to an industry disruption. IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 27 Goal of Digital Transformation IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 28 (3) Digital Transformation IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 29  Example of Digital Transformation: DBS  DBS launched a car-matching marketplace in 2017 that connects car buyers and sellers. It is a digital business because it could charge a matching fee, in addition to providing auto loans, so that the bank diversifies its revenue stream beyond fee income and interest income. Source: https://www.dbs.com/newsroom/DBS_partners_sgCarMart_and_Carro_to_create_Singapores_largest_direct_buyer_t o_seller_car_marketplace IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 30  Example of Digital Transformation: DBS  DBS has also started a property-matching marketplace in 2018 to connect property buyers and sellers. The DBS Property Marketplace is intended as a one-stop shop where home buyers can browse listings and link up with utilities providers, as well as renovation, cleaning and moving services. Source: https://www.straitstimes.com/business/banking/dbs-launches-online-property-marketplace IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 31  Example of Digital Transformation: DBS  Many companies are using chatbots (voice-activated software that is capable of engaging in conversation) to make customer service more efficient or to reduce costs in existing channels.  DBS took it a step further. Building on the knowledge and systems in Singapore, plus chatbots and other technologies, DBS launched digibank, a mobile-phone-based banking model that requires no human intervention, in India in 2016 & Indonesia in 2017. This model can make money from small accounts that other banks would never find profitable enough to accept.  DBS’s focus on developing a model for low-cost new markets made chatbots, along with other technologies and significant organizational rethinking, into a much greater opportunity. Source: https://www.dbs.com/newsroom/DBS_launches_digibank_an_entire_bank_in_the_phone_in_Indonesia IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 32  Example of Digital Transformation: DBS Source: https://www.dbs.com/newsroom/DBS_launches_digibank_an_entire_bank_in_the_phone_in_Indonesia IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 33 Example of Digital Transformation: SingPost  SingPost is redefining the role of the letter carrier, by creating a one- stop shop for retailers’ e-commerce needs in Asia.  Besides its regular postal duties, SingPost is offering a basket of services for companies, including website development, online marketing, customer service and, of course, package delivery. It is also building a network of 24 warehouses in 12 countries to stockpile goods for companies.  In Malaysia, SingPost is helping to sell Triumph’s lingerie & delivering Adidas sneakers. In South Korea, it is helping to sell Levi’s jeans. In Singapore, it is helping to stock Toshiba laptops. Source: https://www.nytimes.com/2015/05/19/business/international/singpost-reinvents-for-digital-age-of-ecommerce.html https://ie.enterprisesg.gov.sg/venture-overseas/Sggoesglobal/SingPost IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 34 Example of Digital Transformation: SingPost Source: https://www.nytimes.com/2015/05/19/business/international/singpost-reinvents-for-digital-age-of-ecommerce.html https://ie.enterprisesg.gov.sg/venture-overseas/Sggoesglobal/SingPost IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 35 Example of Digital Transformation: Ford  Ford is traditionally an auto manufacturer.  Ford has said it will become a "Smart Mobility" company, mass producing fully autonomous vehicles for use in ride hailing and sharing models by 2022. Source: https://media.ford.com/content/fordmedia/fna/us/en/news/2016/08/16/ford-targets-fully-autonomous- vehicle-for-ride-sharing-in-2021.html IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 36 Example of Digital Transformation: Caterpillar  Caterpillar is traditionally a construction equipment/ machinery manufacturer.  Caterpillar acquired Yard Club Rental, a digital marketplace, that matches owners and renters of idle construction equipment.  It has also developed a manufacturer- agnostic fleet management system, Yard Club Fleet. IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 37 Summary  Reasons for “Going Digital” 1. Increasing Pace of Technology Changes 2. Increasing Competition within the Industry & Adjacent Industries 3. Increasing Customer Expectations  Phases of “Going Digital” 1. Digital Enablement 1. Process that focuses on implementing new technologies such as cloud services, mobile computing, etc. that digital business often uses 2. Digital Optimisation 1. Process that focuses on implementing new technologies to optimise the core processes without changing the business model. 3. Digital Transformation 1. Process that focuses on implementing new technologies to launch net- new digitally enabled products and services or pursue new business model. IT1163/IT1363/IT1563/IT1663/IT1863/IT1963 Digital Business 38