The Art of Coding the Digital Transformation
I use two words to describe the Digital Transformation: ‘Efficiency and Communication’ Efficiency comes first because, while digitally transforming, we identify all production and management processes in the systems, simplify them and ensure that these processes flow seamlessly. Therefore it becomes possible to manage the company with automated and optimized processes. Most of the work at our companies has recently started to be done without the use of human hands but through automated processes approved or defined via the main process.
Efficiency also comes to the fore when one looks at things from the standpoint of customers. Customers are now in a position where they are able to compare all rival services and products on their screen with a single ‘click’. Companies can no longer compete without reducing the costs and offering the best product to the customers at the most affordable prices.
The second one is Communication because all our shareholders, employees, customers, suppliers, and even the society itself are just a click away. Technology now allows us to access surprisingly large publicly available data. Moreover, we have algorithms that allow us to analyze such data and produce meaningful results. Smart devices and supercomputers made everywhere and everything in the world accessible and meaningful with their data retrieval and processing speed. Today, it is possible for us to anticipate what our customers will demand from us in the future, measure job satisfaction of our employees, make our supply chain more effective and efficient, and even develop open source software and new product and services together with our existing and potential customers.
Also the majority of data we process today has a human-society focus. IoT (The Internet of Things) is not yet at that point where it can retrieve data from 70-80 billion devices in the world and process them. Think of the new economy and competition that the world of IoT will generate together with the switch to 5G. Are Turkish companies and sectors aware of the impact this competition will generate and are they getting prepared for it?
Digital Transformation and Sustainable Competition
Of course, this technological development and transformation has also made the competition very different. It has greatly increased the importance of strategic management. Now there are almost no barriers preventing entry to a new market or a new sector. Very large sums of cash are no longer the priority for starting a new business or making a breakthrough, at least at the beginning. What is needed are innovative breakthroughs that make a difference and aim at reaching as broad markets as possible.
The ‘Plug & Play’ infrastructures provided by the digital world , which I will call ‘Come and Connect’, also generate small and very fast competitors and transform the value chains. What is this ‘Come and Connect’ strategy all about? To increase the end-to-end variety and scope of your digital products and services in any field of business, the system opens up the APIs of your infrastructure and enables new services and products developed in this field by you or your business partners to be delivered to your customers via this infrastructure. Applying the most appropriate ecosystem on your business model, rather than just being confined to your own opinions and abilities, means providing your customers with services that are beyond their expectations. For example, Amazon now not only provides online sales but also sells business logistics, front-of-house and IT services thanks to its business partners that are integrated into its own infrastructure and thus raises customer loyalty.
Digital transformation breaking point
Digital transformation has and is developing almost in the same process in every sector. Firstly new trends emerge, and innovative start-ups using these trends apply business models that turn out to be destructive for other businesses lagging behind. Those who notice this development and adapt to it at an early stage adopt new models. This is a very important test especially for large-scale companies operating in the traditional manufacturing and service sector and that is exactly where the breaking point of digital transformation lies. Digital transformation doesn’t give any chance to survive to those that cannot keep up with head-spinning changes in the world of business.
And the future
I would recommend all to read the book ”The Fourth Industrial Revolution”by Prof. Klaus Schwab, the founder of the World Economic Forum. Schwab provides solid explanations of what this transformation means for the industry. Major industrial revolutions that began in the 18th century with the switch to a ‘production society’ and continued with the widespread mass production in the 19th century and moved onto the third phase with automated production processes in the late 20th century are now, as we all witness it together, switching to a whole different dimension in the 21st century where production systems are being connected to cyber networks.
In the near future, we will see the production, management and organizational structures of the companies that keep up with the transformation undergoing rapid changes. Rapid prototyping, 3D printing machines and smart robots will speed up the R&D and production processes and make them more efficient. Carrying out all processes on digital platforms will lead to standardization, reduce error rates, turn complex systems into something easily manageable, and provide time and cost advantages. Systems will also work in an integrated manner and the number of collaboration platforms will grow with each passing day. Artificial intelligence, data and analytical science will leave their mark on this new era.
This new world will need designers, programmers and technical experts having the skills that will make sure that all smart systems work together in harmony. Operational affairs and even administrative management may lose their significance.
In the mid-term, many jobs will be replaced by robots and computers while the needs in the fields of digital business will increase incrementally. For example, those working on artificial intelligence, virtual reality, data science and robotics will be brought to critical positions in companies. The competencies of these specialists in creative thinking, managing digital strategies and designing new jobs will also be much in demand.
Our Digital Transformation Agenda
My recommendation is that every small and medium-sized company, or companies of whatever size they may be, should primarily review all their production and management processes and simplify them in a manner to increase the productivity and make them manageable in a digital environment.
Incorporating also the procurement, sales and after-sales processes into such a digital environment through the integration of shareholders will bring very significant competitive advantages.
Another crucial area in this transformation is the performance of the communication companies have with their existing and potential customers on their digital platforms. Whether it be a corporate or an individual customer, the perception that the company they do business with is just a ‘click away’ reinforces brand loyalty.
It is also clear that companies, which decide their new product and service road-maps especially by taking into account the problems and needs of their customers and include their customers also to the development processes, make a difference in the market.
Digitalization also allows us to stream data from very different sources and in very different ways. The collection and analysis of this data, their transfer to the management system and their transformation into new skills and competencies through various analytical methods are among the most important technological breakthroughs that define this era. How well companies can keep up with developments in these fields and adapt them to their existing business models will be decisive for sustainable competitiveness.
And now let’s talk about the ecosystem. Now, with the advantage of increased communication and accessibility through digitalization that allows more collaboration, companies are increasing their productivity and competitiveness by developing common projects and strategies, bringing together the right partners according to the set of competencies needed, setting and achieving common goals, and adopting business models that will create common economic values.
Resource management will also be very important in this period. I recommend senior executives to focus the additional resources, which will emerge as a result of the increasing productivity that will be made possible thanks to the digital transformation in their companies, on hiring and training specialists in some new fields such as data science, artificial intelligence, virtual reality and robotics, gaining new customers and new data in the digital world, opening up new digital business fields and preparing the company for strategic moves.