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Zero One: Tired of the Digital Transformation Talk?

Behind the buzzword “digital transformation” lies real investment dollars and achievable business outcomes.

Tom Kaneshige

November 15, 2017

3 Min Read
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Silicon Valley, the land of hype, has been pounding the drum of “digital transformation” all year. It’s right up there with the all-time great buzzword, “innovation.” On deck for 2018, get ready to hear the thrum of “artificial intelligence.”

Really, do these words mean anything?

Outside of the valley, many business people suspect buzzwords are merely marketing’s siren call for them to wipe out their tech budgets on new software services. It’s an upside-down world. When buzzwords go viral, they influence venture capitalists on where to place their bets, thus flooding the market with more of the same.

Worse, buzzwords often have a doomsday scenario attached to them.

If a company doesn’t get on board with “digital transformation,” it’ll be disrupted by a competitor – also known as “being Ubered.” Fail to act, and your competitors will wield big data to make better decisions, your fickle customers will flock to a better digital experience, and your company will go out of business.

Signs, however, suggest business execs are getting a little fed up.

Digital transformation efforts, for instance, have stalled. IDC says nearly 60 percent of companies are at a “digital impasse.” Forrester predicts that 20 percent of CEOs will fail to act on digital transformation and put their firms at risk.

One of the more alarming stats comes from a PwC survey of CEOs: Only 43 percent believe “innovation” is critical to their success.

Related: Zero One: Are Dreamforce’s Big Dreams Deferred?

Which side of the buzzword fence are you on? With “digital transformation,” in particular, you might want to be where the action is.

After all, real dollars are pouring into it.

Companies around the world will have spent $1.2 trillion dollars on digital transformation projects this year, IDC says, despite many at a digital impasse. This mind-blowing number is expected to rise 42 percent by the end of 2019.

These real dollars are leading to real business outcomes. Gartner research vice president Doug Laney cited a half-dozen cases in a blog post earlier this month, “Monetizing and Innovating with Information: The Art of the Possible.”

Here are three that stood out:

·      Walmart reducing online shopping cart abandonment by 10 to 15 percent by incorporating social media trends into its search scoring algorithm.

·      Mexican oil company Pemes using sensors for better maintenance planning, saving hundreds of hours of oil refinery downtime.

·      Peruvian insurer RIMAC using artificial intelligence to process claims 25 percent faster.

Then there are the well-known cases, the rock stars of digital transformation: The Home Depot, Coca-Cola, John Deere, General Electric, and the list goes on. (This doesn’t even include the list of real-world smart city projects.)

In the Zero One blog, I’ve also written about gritty digital transformation happening inside smaller companies. For instance, WheelTime Network, a heavy-duty truck repair company, is investing in and deploying a digital work processing system. And artificial intelligence has found a foothold in healthcare.

Real business outcomes are showing up on the balance sheet.

In an SAP survey, 85 percent of the top 100 digital transformation leaders say they’ve increased market share. Four out of five leaders report higher profitability compared with 53 percent for all others, and nearly one out of four expect more revenue growth from digital transformation over the next two years.

With these real business results, it would be a mistake to dismiss “digital transformation” as just a buzzword ginned up by an ad agency. It should be music to your ears.

Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is based in Silicon Valley. You can reach him at [email protected].

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About the Author(s)

Tom Kaneshige

Writer, Channel Futures

Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is based in Silicon Valley. You can reach him at [email protected]


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