Digitisation is too often seen as a technology discussion. Obviously, it is enabled by technology, but it is rather the intersection between technology and business.
This was the word from Dr Brian Armstrong, group COO at Telkom, who gave the opening keynote at a Telkom Digitisation Debate at the One & Only Hotel in Cape Town yesterday.
"To really have the impact that it can, and should, and ultimately will, have, it needs to transform from being a technology discussion to a business discussion," he said, adding there is so much jargon out there that can confuse people and clutter what conversations need to be had.
According to Armstrong, the tech side of this debate focuses on four mega tech trends driving digitisation - device proliferation, intelligence, connectedness and automation. "What is more important, in my opinion, is the business side of the debate. How do we transition the debate to be one about how technology and digitisation confer competitive advantage on those who adopt it?" noted Armstrong, defining this as digital competitive advantage.
This transition calls on businesses to do things better, to position themselves to do things differently in the market and understand and shape industry structure. "In this way, digitisation helps us do things differently or do different things. It certainly impacts industry structure."
While there are enablers that have changed basic business processes, they can also impact on the core business value chain, stated Armstrong. A hot topic at the moment is customer experience, he said, pointing out how digitisation is fundamentally altering the customer experience.
He believes businesses need to be thinking about three distinct layers: the "explore and buy" part of the customer experience; the "use and consume" layer; and the "support and after-sale service" element of the customer experience.
Xhead: What is a digital industry?
On this topic, Armstrong discussed various industries - mining, hospitality, travel - and asked whether these were fundamentally digital industries. While much of their core business is still very much around a physical product, various elements of their customer experience have been digitised.
"Even just digitising one facet of the customer experience can dramatically impact on digital competitive advantage."
To illustrate this, he mentioned how passengers can now use a digital boarding pass to board a plane or how a hotel guest can book their room using an online platform. The airline is still selling a seat on a plane and the hotel is still selling a bed for the night, but how they are making this available to their customers has changed due to digitisation.
"If your core product is still physical, you can still transform your industry by digitising some part of the value chain or some part of the customer experience."
In some instances, the actual product itself is digitised, he continued, referencing the likes of Uber and Google Maps as examples.
And the situation is no different in SA, Armstrong went on to say, noting there is a great deal of pressure on society to become digitally ready so that we can actively participate in the digital economy. "South African industries are going to be the victims or beneficiaries of these global trends and changes in digital disruption."
In summary, Armstrong believes digitisation is about bringing together business and technology to adapt to trends and effectively meet customer needs. "If your product isn't yet digitised, you need to be rethinking your strategy. If your product can be delivered via an app, it will be. So make sure you make the transition before someone else does."
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