Moving from Digital Transformation 1.0 to 2.0 : Know the Difference Between “Regular” and “21st century” Digital

Many managers feel that their organization is already digital. Consequently, they don’t understand why they have to burden themselves and their organization with yet another journey of digital transformation. 

From their perspective, the organization has already implemented the required digitalization and there is less need for more. To support this view, these managers will note that their company has already implemented an enterprise resource planning (ERP) system, a customer relationship management (CRM) system, a supply chain management (SCM) system, and a business intelligence (BI) system, maintains an e-commerce website, and manages its social media accounts. 

In fact, this contention is largely justified – many organizations are indeed digital. However, digital transformation is not static, and the rate of new waves of “digital attacks” is only accelerating.

Digital 2.0

Most organizations have already completed what we call “digital transformation 1.0” and are now in the midst of what we call “digital transformation 2.0.” Digital transformation 2.0 means companies continuing to examine new technologies, improving their digital footing, and continuously adopting new business models at an increasing rate.

To keep pace with new technologies, the 2.0 model calls for significantly more resources diverted to digital transformation than 1.0. While on the surface this may be seen as a burden, it is absolutely necessary given the exponential rate of technological shift. 

The Giants Have Already Started

It’s no surprise that some of the largest organizations in the world already understand this, and have already constructed the relevant business models.

These are models incorporating “21st Century” digital as opposed to regular digital. For example, Amazon has launched a store without checkout counters or cash registers (Amazon Go); Domino’s Pizza is delivering pizzas with drones in a pilot project in New Zealand; factories are deploying an increasing number of smart robots; full digital banks are entering the financial market, focused on meeting customer needs; insurance companies are increasingly offering smart insurance policies based on pay per usage, and more.

Other examples of 21st century digital technologies include  the Internet of Things (IoT), cognitive computing, machine learning, advanced robotics, 3D printers, wearable computing, virtual reality, augmented reality, voice-operated interfaces, blockchain, and autonomous cars.

The disruptive forces that bring change are only accelerating, and thus forceful action is the solution. If companies want to mitigate the fallout, and even capitalize on it, they need to act.

If management claims the organization doesn’t need to implement new digital transformation because it is already digital, be skeptical, and ask them if a CRM for Barnes and Noble helped them?