Digital Transformation: Prodigy child of Innovation

I’m just picking off on some key strategy buzz words in the last 15-20 years that were considered the magic potion of all Corporate growth and profitability. To name a few high visibility ones; BPR (Business Process Re-engineering), Change Management, Innovation and now Digital Transformation.

Both BPR and Change Management initiatives were internally focused and were mostly considered a veiled exercise in head count reduction, and at best a critical analysis of operational processes.  “Change is the only constant” was the best attempt at gentle persuasion to a nervous workforce.  The missing links in these initiatives were external factors and the market forces that would inevitably play a major role in the future of these organizations.  Process improvement, though laudable, was not sufficient to prepare the corporations for the oncoming onslaught of disruption forces shaping the social, financial and business ecosystems.

What didn’t change?
Competitors were still the same ones as earlier; no significant change in the product nor services portfolio. “More of the same”, though with a renewed focus on process efficiency.

The internet started a social change with a connectivity and information explosion.  Later, the coming of Social and Mobile created social mobilization – unheard of in history.  This digital-led societal change predated the business transformation that we see now and was the foundation for Digital Transformation of today and the future.

Innovation emerged as the new buzz word over the tombstones of BPR and Change Management. There was a certain freshness to Innovation and a non threatening nature to the initiatives surrounding Innovation.

Innovation largely segmented into 4 major categories:

§ Product Innovation

§ Marketing Innovation

§ Process Innovation

§ Business Model Innovation

Apple Inc illustrated significant Product Innovation under Steve Jobs with the iPod, iphone and iTunes, and created new markets for itself.  However, the magic of Apple unfolded when they unleashed Business Model Innovation on the music industry.  The music industry was still playing by the moribund rules of distribution and was ripe for disruption by innovative forces.

Apple’s combination of consumer devices (iPod) and a platform (iTunes) and a bulldozing of the music distributors to the new model changed the industry forever.  This was the power of Business Model Innovation.  Great products like the iPad would not have found the legendary status had it not been for the Business Model Innovation unleashed by Steve Jobs on the music industry.

Digital Transformation is another name for “Business Model Innovation” led by Digital Technologies targeting industries under the strangle hold of ageing rules and practices.


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