Foundations of Digital Business

Session – 1 - Introduction to Digital Business

Transformation
Dr. Surojit Mookherjee

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The Technological Cycles
Next wave of Rapid, disruptive technology innovation
unfolding …

QUANTUM
COMPUTING /
VR / AR
CYBER SECURITY

AUTONOMOUS VOICE
VEHICLE RECOGNITION 5G & IOT

BLOCK CHAIN ARTIFICIAL

INTELLIGENCE

… LEADING TO 4th INDUSTRIAL REVOLUTION

 Relative distance & Accessibility –
Human Body & Computing

1950
1980
2000
Evolution of compute power …

2020
Singularity
Humanism
Intelligence

Augmented
Augmented

Economic & Societal Impact of Computing

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DISRUPTIVE STRESS

• TECHNOLOGY IS CAUSING PROBLEMS

• ESTABLISHED COMPANIES ARE THREATENED
• BUSINESS MODELS BECOME IRRELEVANT

DISRUPTIVE OPPURTINTY

• NEVER BEFORE IN HISTORY HAS SO MUCH

OPPORTUNITY AND TECHNOLOGICAL TOOLS BE
AVAILABLE TO SO MANY PEOPLE AT SUCH A LOW COST.

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WHAT IS DIGITAL TRANSFORMATION ?

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Digital Transformation of India – The Growth story

https://youtu.be/6hgy3bGaUkY

Class Discussion : Who are the

beneficiaries of UPI and in what way ?

( 37 mts )

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What is Digital Business Transformation ?

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What is digital business transformation ? …..

 Digital business transformation refers to the integration of digital technology into all
areas of a business, resulting in fundamental changes to how the business runs and
delivers value to customers.

 This process often involves the use of technology to automate and improve business
processes, as well as the adoption of modern technologies such as Artificial
Intelligence and the Internet of Things (IoT).

 Digital transformation can help businesses to improve their efficiency, reduce costs,
and increase their competitiveness in the market. It can also enable them to supply
new and improved services and products to their customers.

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 What is digital business transformation ?

The Three Layers of Transformation are :

• Operational transformation: Doing current things cheaper, faster
and/or better, often with the assistance of digital technology
• Business model transformation: Doing what you have been doing
but in a completely new way. Also known as core transformation
• Strategic transformation: Fundamentally changing the essence of
the organization. Done badly, it is often called foolhardy or
destructive; done well and it is ‘brave’ or ‘iconoclastic’.

Source: Scott (2016).

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Why the Metaverse is an Opportunity for Digital Transformation ?

BMW’s teaming-up with Nvidia, for example, has seen the German car maker create a
Digital Twin of its Bavaria factory. This has enabled BMW to run full simulations of its
manufacturing facility, to optimize processes and procedures. In particular, it is using the
twin to test its robots’ abilities to perform complex maneuvers.

The city of Singapore has also embarked on a digital twin project to develop a 3D replica
of the city based on topographical and real-time data. It aims to use the twin to test
solutions to urban planning problems. It’s not alone. Las Vegas and Shanghai, to name
just two, are also running digital twins.

Real-time digital modelling and increasingly immersive experiences are being recognized
as a transformational approach to how projects are planned, run and managed.

https://www.engineering.com/story/game-plan-why-the-metaverse-is-an-
opportunity-for-digital-transformation 11
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 Dimensions of the information society

Digital
Collaboration
Digital
Communication
Electronic Digital Internet Information
Commerce Business Economy Society
Digital
Information
Digital
Education

Source: Wirtz (2000c, 2020b, 2021)

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© Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 13
Why Digital Business Models ? ….

• Increasing globalization, deregulation of entire market sectors, faster innovation cycles,

the digital transformation of business transactions and accelerating economic
integration have made the markets more dynamic, more competitive, more digital and,
above all, more complex.

• Companies striving to be global competitors have to adapt continuously to the changing

market conditions.

• Strategies, organizations and products are subject to a growing pressure for change in
order to be successful in this market environment.

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Why Digital Business Models ?

• The diffusion of the Internet into all areas of business activities has brought
particular focus to business models.

• The all-embracing process of digitalization of business processes is the driver of

changes in company strategies and management practices.

• Online markets have brought about a multitude of new business models that are the
foundation of companies such as Amazon, Google, Facebook and eBay.

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Defining digital transformation

• Strategy led
• Data driven
• Innovation driven
• Business model changing
• Impacting all part of a value chain
• Incorporating networked technology
• Orchestrated by leadership and people

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 Digitization versus Digital transformation

• Digitization
o Implementation of technology to
solve specific business problems
o Automate manual work or business
processes
• Digital transformation (digitalization)
o Strategy led
o Incorporates digital technologies
o Connected!

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Some definitions of Digital Transformation :

• Forrester define Digital Business Transformation as exploiting

“digital technologies to both create new sources of value for
customers and increase operational agility in service of
customers”

• The Global Center for Digital Business Transformation define

Digital Business Transformation as a journey where businesses
“adopt digital technologies and business model to improve
performance”

Ref: David Edmundson-Bird - Manchester Metropolitan University

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Understanding Digital Transformation ……

Digital is not just Technology alone :

• Digital is:
• Culture;
• Practices;
• Processes;
• Technology

that have emerged since massive widespread participation in the (age of the) Internet

Ref: David Edmundson-Bird - Manchester Metropolitan University

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 Understanding Digital Transformation …..
Adapt not
Adopt
• Adopting technology focuses on the technology
• The organization may change incrementally
• Adapting to Digital means ( ….getting it into the DNA )
• Changing the culture of the organization to adapt to cultures of the Digital Age
• Changing the practices of the organization to adapt to practices of the Digital Age
• Changing the processes of the organization to adapt to processes of the Digital age
• And finally evolve the Digital ecosystem encompassing Technology – Culture – Practices –
Processes.
Discussion : Schools and Colleges going on-line for all admission process. Are they
“adopting” or “adapting” digital means ?
Is IIT a “digital organization” ? Yes / No and Why ?
Any other examples 0f digital organization ?
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Ref: David Edmundson-Bird - Manchester Metropolitan University
Understanding Digital Transformation …..

• Organizational culture and configuration often move

much slower than process and technology when it
comes to digital readiness
• Digital maturity doesn’t occur without that
change to organizational culture and
configuration
• You must not give a low priority to cultural change and
education – you need to make them take a central role

Ref: David Edmundson-Bird - Manchester Metropolitan University

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 Drivers for digital transformation

Internal External
Dynamic leadership Industry and competition
Growth
Customer expectations and needs
Operational efficiencies
Governing agencies

Need to globalize Availability of third-party platforms

Attract the right talent Government push

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 How to begin the journey …..

• Digital transformation has to be enacted at ‘Chief’ level by Digital

Evangelists ( and not just a digital technologist )
• It only works as a whole organization activity
• It needs a high level of collaboration and leadership from CXOs
• It can’t be done by one person
• Be prepared to make mistakes and learn
• You have to take risks
• You have to become agile (this might be cultural)

Ref: David Edmundson-Bird - Manchester Metropolitan University

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Difference between Technology and Digital

The key difference between Technology and

Digital

• Technology is about building the “Platform

“.

• Digital is about exploiting the “ Platform “.

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There are 6 core emerging technology trends that make Digital Transformation
possible
• Social media and collaboration technologies enable
Justify …. new ways and drive expectations of interacting,
personalization, and building relationships within and
• Cybersecurity is the protection of information Social beyond the organization. It is a key drive to
improving the Customer Experience.
systems from theft or damage to the
hardware, the software, and to the information
Media
• The possibility to virtualize and
on
consume infrastructure,
them. The more we depend on Cyber- platforms, and applications as a
the Internet and related
security Cloud service (XaaS) enables new
technologies, the more we
depend on their security. levels of scalability, flexibility, and
As such, there can be no Digital responsiveness. It also gives
way to new business and service
Transformation without cyber- Digital models.
security. Cybercrime, digital espionage,
and hacktivism (digital activism) have become Transformation • Analytical methods and access
serious risks to businesses and consumers.
to the right data enable the
• The uninterrupted trend generation of new insights and
towards using mobile devices
Mobility Big Data – decision-rich information. Big
impacts all areas of business Data approaches allow to make
and personal life by Analytics - AI use of the rapidly increasing
transforming how people amount of data from multiple
interact, consume information
and services, collaborate, and
Internet sources.
• Connected devices of all kinds and cheap sensors
work. It allows for consumers
to be reached wherever they
of Things integrated nearly everywhere constantly create large
are and at all time of the day. amounts of data that need to be managed effectively.
This also enables new ways of automated and
personal interaction.
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8 Levers for Digital Transformation ..1/2
Growth Drivers
1 2 3 4
Customer
Demand Reach & Customer
Purchase
Generation Selection Experience
Process

• Brand awareness and • Being where • Improved • Clear, seamless, and

brand interest through customers can understanding of secure ways to
social media marketing easily find us customer purchase
• Big data analytics to • Location based expectations via • Mobile payments
discover new customer services ongoing
• Big data analytics to
segments engagement with
• Access to better understand
customer
customers across purchasing behavior
• Social listening
multiple devices
across all digital
media channels
• Big data to improve
customer
experience 26
8 Levers to Digital Transformation levers..2/2
Operational Improvement
5 6 7 8
New
Process Asset Utilization Agility Business
Efficiency Models

• Digitized and • Optimized • Utilize remote access and • Analytics-based

automated production/inventory collaboration and mobility commercialization
processes planning based on tools for employees (marketing,
• Improved process demand forecasting • Integration with partners in commissions, trade
governance and • IoT fed Data-based digital ecosystem to promotions) to target
efficiency through preventive asset optimize service delivery investments and track
real-time insights maintenance returns
• Virtual organizations
• Digital Twins • Task automation • Customer self-service
enabled by mobility and
optimization through seamless cooperation • XaaS opportunities to
digital technology such digitize the technology
as sensors and infrastructure
assets
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 Digital Maturity
D
• Unaware of digital as a business strategy
i
Digital unaware • Potentially uses digital as a consumer (e.g.,
g
i mobile banking and so on)
t • Aware of digital business strategy
a Digital aware
• Some understanding of technologies like
l
platforms and IoT
M • Implemented some point solutions
Digital starter
a • No overall digital strategy
t
u • Has a digital transformation road map
Digital proficient • Actively implementing digital solutions
r
i
t
Digital expert • End-to-end digital
y
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Industries well on their way to transformation

Digital Digital Digital Digital Digital

unaware aware starter Proficient Expert

• Financial Services: Information

SMEs
banking; insurance
Agriculture technology
Process manufacturing • Hospitality: Hotels,
Other manufacturing airlines, travel agents
Trading • Media: Content creators,
content distributors
• Retail: E-commerce
• Transport and logistics
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 Topics for classroom discussion and team debates

1.Discuss the perspectives of an information society against the background of data security as
well as personal and privacy rights.
2.Discuss how the digital market model will change in the future. Who will economically and
socially benefit and who will not?

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© Bernd W. Wirtz | Digital Business and Electronic Commerce | May 2021 – Page 30
References

Text Book

1. Leading Digital, George Westermann, Didier Bonnet and Andrew McAfee , Harvard Business
Review Press
Reference Books
2. Digital Business Models - Bernd W. Wirtz , Springer
3. The Digital Transformation Playbook, David L.Rogers, Columbia Business School.
4. Digital Transformation Strategies – S.R.Pingali , Shankar Prakash, Jyothi R. Korem , Sage
Publications

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 Thank You
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