Digital transformation has emerged as among the most important issue of this century for the leadership. Whether their companies can survive technological disruption, leverage Big Data or artificial intelligence and chase a new vision for the company as a digital leader has become a key decisive factor of their success. And this is the same trend in all industries from education to energy, from banking to healthcare. Even the governments have not remained untouched of this transformation.
According to recent research by Alix Partners and MIT, companies that have bridged such a “digital divide” are generating net income that is 15% higher than their competitors. CEOs recently interviewed by McKinsey said that they believe technology can improve business growth and productivity enough to lift profits and shareholder value by as much as 50% in the years ahead.
Successful leaders are making breakthrough innovations and creating market-changing products and services for their companies, thanks to the transformational technologies—especially the potent combination of big data, artificial intelligence and machine learning to understand and serve their customers like never before.
According to a recent study by the World Economic Forum, Digital transformation of industries could contribute as much as $100 trillion in combined value for both industry and society by 2025. That includes a potential value of $12.7 billion from the digital overhaul of just four industries: automotive, consumer, electricity and logistics.
Considering the fast paced technological advancements and tough competition (from startups and entrepreneurs), digital transformation needs a sense of urgency, but it is time to think about digital transformation in the context of value creation and examine the different options not only based on increasing revenues and reducing costs, but rather on evaluating and shaping the digital transformation in the context of increasing people’s (customers, employees, vendors, consultants and all stakeholders) values as well as cultural values. Simply reducing people efforts and transaction times, while important, are often considered as obvious factors and do not convert to much profitability. Leadership should form the strategies and road map to add value in the digital transformation era. Or, they risk delivering the most advanced digital platforms while ignoring their profits and financial sustainability.