Punctuated Equilibrium…Sounds abstract and beautiful, isn’t it? I recently came across these words in a book called “Digital Transformation, Survive and Thrive in an Era of Mass Extinction” by Thomas Siebel. The author, who is a well-known technologist and a gifted writer, in his book, provides a lucid account of the history of technology and the reality we are walking into in a few years. What Siebel meant by mass extinction in the title is the extinction of the businesses that are not ready for digital transformation, a term that is easy to talk about but difficult to explain if we try to pinpoint the specifics. There is little doubt though that it’s an unavoidable truth that is already bringing about massive changes in how corporations, industries and nations function.
This world has seen multiple iterations of mass extinctions, and each time it has happened, new species are born, stronger and better and shaping the world as they evolve. This relays around Darwin’s theory of evolution and his explanation of the process of natural selection but the author suggests that these long periods of slow evolution are punctuated by dramatic disruptions and transformations. Businesses follow the same pattern. Companies such as Eastman Kodak Company, Borders and Blockbusters found themselves floundering as they could not keep with the change of pace and failed to innovate. Currently, he feels, there is a feeling of relative stability, a calmness unknowing of the lurking storm. Businesses that are thriving, profiting with their established business models may be happy with the current situation, but if they are not looking at evolving and preparing for disruption, they are not going to sustain for too long. As the few who do, would dictate the demise of those who do not. So how do you jump into the bandwagon of digital transformation? There are four mantras, the confluence of which drives digital transformation. Let’s look at those.
Elastic cloud computing: Elastic cloud computing has revolutionized organizations of different sizes to scale up using unlimited computing resources on a pay-as-you-use basis. These are compliant with government regulations, easily accessible and hence and we are seeing larger adoption and applications of it in our day-to-day life.
Big data: With more storage and more power available at cheaper prices, companies can afford to collect more data than ever before. This allows them to do behavioral analysis directly on these huge data sets and more robust predictive analytics than in the past to reveal patterns and trends to help in areas such as fraud detection, predicting equipment failure and other decision-making support systems.
AI(Artificial Intelligence): The above two provide the infrastructure to drive the digital transformation but artificial intelligence gets the engine running. The limitless computing power and large datasets can be used to train deep neural networks which can bypass the intensive requirements and cost of doing feature engineering observed in traditional machine learning.
IoT(Internet of Things): With the hyper-growth of the internet, there has been an explosion of internet devices. Some of these are dirt cheap and with very less power requirements, and can cling onto larger equipments transmitting signals that can be utilized to make inferences that can revolutionize the industry. The sheer volume of data exchange can be unprecedented with sensors on equipments and smart devices having both processing and communication capabilities when combined with the power of cloud computing.
And it is why digital transformation can be so frightening: Companies must shift their focus from what they know works and invest instead in alternatives they view as risky and unproven. Many companies simply refuse to believe they are facing a life-or-death situation. This is Clayton Christensen’s aptly named “Innovator’s Dilemma”: Companies fail to innovate, because it means changing the focus from what’s working to something unproven and risky.
Digital Transformation is not an option anymore, it’s the need of the hour. Revolutionary changes in key corporate processes can be realized by having a strong leadership who can influence these changes from top-down. Companies can develop strategies to solve problems exposed by data analytics or turn their existing data into a competitive advantage to stop newbies in the game and accelerate their march towards the top. The author trusts a model-based architecture to be one of the key design decisions while creating a platform that can stand the test of time.
This book is a must-read for those seeking to lead enterprise capabilities and survive extinction. The historical perspective is authentic and credible and comes from the author’s personal stories and insights gleaned from more than 40 years in the business. If ivory tower scientific ideas and technology buzzwords don’t make sense to you, this is a recommended read as well.