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article imageThe two major factors driving digital transformation

By Tim Sandle     Jan 27, 2018 in Business
There are multiple reasons why different types of businesses elect to start or develop the digital transformation process, not least the desire to remain competitive. Two dynamics are changing customer expectations and the exponential organisations.
The two major factors pulling organisations into the new digital arena are customer expectations and exponential organisations, according to Simon Carpenter, chief technical adviser at SAP Africa, a division of the multinational software corporation that makes enterprise software to manage business operations and customer relations.
As a signal that digital transformation shows no signs of slowing down as a global business imperative, the IDC 2018 Digital Transformation Predictions report highlights that digital transformation spending is set to increase by 42 percent between 2017 and 2019, leading this spend to hit $1.7-trillion globally.
The two dynamics called out by Simon Carpenter, and featured on the website Business Technology, are drawn from the analysis of different businesses at different stages of maturity.
Customer expectations
The first driver centers on businesses needing to provide what customers expect, rather than seeking to provide what businesses think customers need. This is not simply about selecting the right product, it is also about service deliveries. Customers, especially the generation defined as millennials, increasingly expect to order on-line and to have goods delivered within a short time frame.
According to Carpenter, cvange is being driven by: "the heightened expectations of the Uber-using, Facebook-connected, Amazon-enabled consumer, shopper and “prosumer” and the Millennial or Gen Z employee demanding compelling, exciting experiences with instantaneous gratification."
He adds: "It is this factor that is driving the primacy of Customer Experience (CX) as a white-hot topic in most organisations. It is this aspect that makes design a crucial competence."
Exponential organizations
The second dynamic refers to to start-ups, as businesses with low overheads and a good technological product which can rapidly enter an established market and disrupt the status quo. Here Carpenter writes: "there is a new breed of Exponential Organisation that synthesizes technical capabilities into new business models that can be launched and scaled with very little overhead (because they can leverage cloud platforms) and that come after existing value propositions or established industry structure in ways that incumbents can’t anticipate or don’t expect."
Carpenter's two forces invariably coincide: "every time a savvy new start-up offers customers a great experience or something novel that then becomes part of their expectations."
This means established businesses need to adapt trough the adoption of digital technologies like e-commerce solutions, multi-channel experiences, artificial intelligence, and big data analytics, in order to secure their future.
For recent articles on the subject of digital transformation, see "Sure signs of retail's digital transformation" and "Construction set for increased digital transformation by 2025."
More about digital transformation, Customer Expectations, Exponential organisations
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