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Business success hinges on digital transformation

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Kathy Gibson at IDC’s CIO Summit in Johannesburg – There is a profound degree of socio-economic and business change taking place, that is being driven by technology.

Joseph Pucciarelli, group vice-president and IT executive advisor at IDC, cites the case of a man sentenced to prison based on a computer algorithm as how much technology is pervading literally every aspect of our lives.

On the commercial front, companies are using technology to better understand their customers and their products.

BMW has bought 16 new companies in the last couple of years They aim to become part of a transport solution rather than simply a car manufacturer, and a leader in technology.

The driver enabling this change is in a set of innocuous seeming technologies, Pucciarelli says. It’s not so much the technologies themselves, but how they combine to enable new business models.

The spending o dx over the next few years is $1,3-trillion, he adds. Meanwhile, data is exploding and will amount in 160 zetabytes by 2025. There will also be 30-billion IoT connections that are expected by 2025.

In the midst of all this abundance, Pucciarelli says, it is also a time of shortage By 2025, 70% of the companies in the Fortune 500 will be gone.

And there is a massive shortage of talent, Companies cannot hire the right people they need to drive their companies forward.

As CIOs, we are stuck with legacy systems and silos of data which will inhibit digital transformation.

The transformation has to encompass customer, information and operating models, Pucciarelli says.

“The issue many organisation are at risk, they are fighting for their very survival.”

The CIO has a critical role to play in this change, he says.

They are the people that will recommend the emerging technologies needed to transform the business, to ensure innovation is integrated and to make sure the work is done.

Almost half of companies say that the CIO and the CTO are leading the digital transformation initiatives in teir organisations.

What CIOs need to do to enable the change.

“We have to support he innovation,” Puccciarelli says. But this runs the risk of crating new technology silos – and we could end p with a forest of silos.

“As we know, 18 months out we will again have no ability to evolve and change the organisation,. We have to support a river of change.”

A capability approach is what’s needed, he says. This would include a modular, reusable, plug and play portfolio.

The new functionality would include platforms, processes, governance and talent.

The way we are engaging with technology is changing, Pucciarelli says. CIOs need to understand how technology is already being used in people’s life activities.

“We have to have models where the business engages the customer where they want ot be engaged.”

Macy’s is testing an artificial intelligence (AI) bot that is accessible via the customer’s smartphone. The bot assists the customers within the store, helping them to find products, departments or brands.

Data monetisation is the goal for many organisations, leveraging the data to create new digital revenue streams.

The new data economy is where raw data and various forms of value-added content will be bought and sold through bilateral transaction or through data brokers.

The goal of digital business at scale is where digital business operations will enable speed and scale.

This will result in speed of innovation, quality improvement and cost reduction.

Pucciarelli talks about how South Western Airlines implemented digital communications which helped to improve customer service and fleet optimisation while reducing costs.

In other instances, blockchain could reduce time and costs by enabling straight-through transactions.