Winners take all in this digital transformation race

Every business needs to accelerate its digital transformation to effectively compete and stay relevant to customers. This requires changes in metrics, in organisational structures and in the technology platform.

While such a viewpoint may have been controversial five years ago, it is certainly not the case today as digital transformation is a key item on the agenda for C-suites, boardrooms and even governments.

The progress of digital transformation in Bangladesh, much like its South Asian counterparts, is commendable.

The Bangladesh government is leading the country's digitalisation movement, and businesses, too, are echoing the government to realise Digital Bangladesh vision by 2021.

With the vision, the government has undertaken several projects to achieve digitalisation in the public and private sectors.

For example, the government has been working extensively to ensure that e-governance is accessible to public on digital platforms.

From online procurement of public projects, collection and submission of academic admission forms, job applications, collection of official forms, to online tax returns submission, digitalisation has spread its wings in all spheres of public services.

In fact, the government has delivered 6 million e-services to 4.5 million beneficiaries on average per month through 407 City Corporation Digital Centres, 321 Pourashava Digital Centres and 4,547 Union Digital Centres (UDCs).

Microsoft recently partnered with the leading technology advisory firm IDC to assess the digital transformation landscape across Asia Pacific.

Titled “Unlocking the Economic Impact of Digital Transformation in Asia Pacific”, the study involved some 1,560 business and IT leaders from 15 economies.

The study clearly showed that there will be widespread disruption to the traditional business and operations models -- approximately 60 percent of Asia Pacific's GDP will be derived from digital products and services by 2021, created directly through the use of technologies.

In comparison, only 6 percent of Asia Pacific's GDP today is derived from digital products and services. This is the speed of change that all organisations must grapple with.

Imagine that you are operating a fast-fashion clothing chain in Bangladesh. This means that by 2021, half of your business will be derived from online or digital channels.

The study has shown organisations are seeing significant and tangible benefits from their digital transformation efforts today.

The top five digital transformation benefits that organisations experienced include increased profit margins, productivity, customer advocacy, loyalty and retention, cost reduction, and revenue from new products and services.

When I speak with industry leaders, I don't get a uniform sense of urgency about their digital transformation journeys.

Some leaders prefer for others to be the trailblazers, and then to learn from these digital transformation pioneers.

The question that I often ask myself is this: “Is digital transformation a race where the winner takes all?”

The study also shows that the pace of transformation makes a difference, much like how an efficient pace is key in raising your chances of winning a long-distance marathon.

We have classified the organisations participating in the study as 'Leaders' and 'Followers' based on a few factors: the maturity of their digital transformation strategies; proportion of their digital income; and level of benefits achieved from digital transformation initiatives.

With these filters applied, only 7 percent of the organisations in the study can be classified as leaders.

More importantly, the study has shown that leaders reaped the highest digital transformation improvements -- to the tune of more than double the benefits from digital transformation compared to the followers -- and the effect is expected to be more pronounced by 2020.

In fact, we are already seeing digital leaders in action in Bangladesh.

For example, a trio of Bangladeshi students made to the final of Imagine Cup 2017 showcasing immense potential.

Team Parasitica, a group of students from the Bangladesh University of Engineering and Technology, competed with young innovators from different corners of the world in Seattle, USA last year with their “fasTnosis” app, which uses Microsoft's Artificial Intelligence tools to more accurately diagnose patients via inputs of microscopic images into the app.

The medical diagnosis app can screen tuberculosis, malaria and intestinal infections, helping millions of affected people.

This shows that with the right tools and platforms, our youths are able to transform the way how people access medical diagnosis.

For organisations to succeed with their digital revolution, they need to create a digital culture, build an information ecosystem, embrace micro-revolutions, and develop future-ready skills for individuals and organisations.

Culture is the multi-layered core at the heart of every successful organisational digital transformation. The study shows that leaders benefit most from a full digital transformation strategy in an ecosystem of customers, partners and employees working together.

Data must be embraced as part of every piece of work done in an organisation. Data analytics can be used to take products and services to the next level.

Companies that emphasise big data analytics, as the leaders are already doing, will build strong foundations for emerging technologies like Artificial Intelligence (AI) and Internet of Things (IoT) to accelerate their respective digital transformation efforts.

In a digital world, organisations have access to more data than ever before from both internal and external sources.

Both the opportunity and challenge are to bring all that data together, to analyse that data, and then use it in ways that contribute to better decision making and better outcomes.

Data capitalisation is key to success in the digital economy: to convert this data into capital assets and monetise them, there needs to be data sharing and collaboration not just within the organisation, but also externally with customers and partners in a trusted manner.

A proper data strategy that produces real and measurable data sets allows organisations to start taking advantage of the power of AI in identifying connections, insights and trends that are not yet obvious.

In most cases, digital transformation efforts do not start with an organisation-wide plan of change, but rather with a series of micro-revolutions.

These are small, quick wins that deliver positive business outcomes, and at the same time accrue to bigger and bolder digital transformation initiatives.

We see this digital momentum in leaders, who are less risk-adverse and even often embrace both fail-fast and learn-fast approaches.

This mindset will ultimately enable organisations to be at the forefront of reaping benefits from emerging technologies such as AI.

Organisations today must relook at training and reskilling its workforce so that talent is equipped with future-ready skill sets such as complex problem-solving, critical thinking and creativity for the digital economy.

At the same time, they need to put in processes to not only retain and attract key digital talent, but also be open to creating a flexible work-source model that lets them tap into skills-based marketplaces.

This study has shown us that in this high-stake digital transformation race, leaders reap the greatest rewards and will command stronger positions in the exciting digitally-fuelled world we are heading towards.

History has also shown that during these industrial paradigm shifts, old business models often become extinct, taking out entire organisations and even industries at the same time.

If there was only one question that you should ask yourself as a business leader, it should be this: “Is your organisation in a position to be a digital transformation leader today?”

The writer is the managing director for Microsoft Bangladesh, Nepal, Bhutan

and Laos.