A new report from research house IDC reckons $2 trillion will be spent on digital transformation (DX, obviously) through to 2022. Bearing in mind that 80% of big transformation projects fail, you have to wonder how much of that $2 trillion will be wasted.
The $2 trillion figure covers all industries. Interestingly, neither telecoms nor banking get a specific mention.
You also have to wonder about how many different views there are of digital transforma – sorry, ‘DX’. It would be interesting to survey people (probably with the help of a truth serum) to get their views on what digital transformation means, to them.
To some it will almost certainly mean automating anything that sits still long enough. To others it will mean plugging artificial intelligence into everything that can be done by looking things up – such as customer service, financial products and advice about pricing plans.
To yet others it will mean (remember the truth serum) automating manufacturing processes by implementing ‘smart’ factories – which translates into massive cost cutting. If, for instance, you don’t need people to build your product, you also don’t need light or heat and you don’t need to have your factory near a population center – all you need is the transport links.
That there will be highly visible screw-ups is a given, but there will also be successes.
Telecoms and the financial industry, for example, will eventually figure out what to do with their legacy environments, whether they ring-fence them and leave them churning out bills and statements for legacy services, or ditch them completely.
What is essential is that the thinking changes. If a telco is thinking “we must do the digital transformation thing, the shareholders are asking what our strategy is”, then the starting point has to be about business and probably the customer experience.
And the thinking must be outside the box.
There was a good story from our friends at Telecoms.com last week that reported on a presentation by MTN in South Africa. Their journey into the digital age is being accelerated by buying the cool services. Although the company’s primary aim is to continue to connect the millions across Africa, at the same time a major focus is to work out what those millions will want when they are connected. Thus the company recently bought an OTT player, Simfy, to provide music as soon as the next million customers are connected.
This story is interesting because telcos in particular need to understand what their strengths are – and building cool services is typically not one of them. You just have to look at RCS to understand that the telco thinking of making sure a product is as good as it can be before you launch it is no longer good enough. Perfection is the enemy of success, and if telcos want to succeed in the services arena, they need to buy them, not build them.
To lessen the percentage of the $2 trillion that will be poured down the sink, telcos, banks, manufacturers need to think about what their business needs to be and who it needs to serve.
So, go ask some millennials, or employ some. Why not?