Q&A with Prof. Jürgen Janssens on Digital Transformation

Digital Darwinism: Thrive, Survive or Die

By Caroline Campbell on Jul 6, 2017
Janssens Headshot Survival of the fittest. Darwinism is the widely accepted theory of biological evolution explaining how species evolve through natural selection developed by English naturalist Charles Darwin. But what happens when this theory is applied to the world of business development? Prof. Jürgen Janssens, contributor to Encyclopedia of Information Science and Technology, Fourth Edition, explains this ever-growing phenomenon and outlines what businesses need in order to fight extinction.

How has digitization changed the spectrum of business?

In an era where the business climate remains tough and updates about technological evolutions are airing at high speed, companies are continuously challenged to raise the bar or to reinvent themselves. Digital Transformation is seen as one of the means to get there.

Early 2016, the World Economic Forum in Davos called it the Fourth Industrial Revolution. They stated that these changes hold great potential, but that the patterns of consumption, production and employment created by it also pose major challenges requiring proactive adaptation by corporations, governments and individuals.

Besides the semantic discussion, facts are available in spades to illustrate the vastness of this evolution. In 2016, the CEO of technology and consultancy company Accenture stated that digital is one of the main reasons half of the companies on the Fortune 500 have disappeared since 2000. The growing impact of the GAFAs and the NATUs only confirms this.

In fact, private and public actors have already interwoven digital in people’s lives in several ways. The British government, for instance, is coached by scientific experts to put insights on behavioral science into practice for public service. Similarly, services are in the make where third-party service providers like car insurance companies and marketers use driving habits and machine data to adjust risk-pricing models and optimize processes.

In short, one of the biggest changes that digitalization brings is the transition from a product and competition based economy to a service and customer journey focused reality. Companies have to create a whole service infrastructure to manage streams of data, make sense of data and use them to provide services. That is a rather profound shift. The opportunity, on a service perspective, is to rethink the way to satisfy a customer’s need through a service, especially as many of the services that can be created through the digital world were not there before.

The Digital Age is thus very much present. Modern society is in the midst of it. At its core, it is fundamentally changing the value proposition to and from the customer. The question is thus not anymore how to prepare for it, but how to live in it, work in it, and remain meaningful.

What is Digital Darwinism?

Compared to past Industrial Revolutions, Digital Transformation has led to a double societal dynamic. On the one hand, there is a kind of Digital Darwinism ongoing, where technology and society is evolving faster than the speed at which businesses can naturally adapt. This is the case with Small to Medium-sized enterprises (SMEs) or non-profit organisations that are struggling to take the technological leap. This can also apply on large, international corporations. They are left behind, either because they do not understand yet that the change is inevitable and are overconfident that they will continue to reign forever, or they understand the need, but are reluctant to move out of their comfort zone.

At the same time, there is also an ‘inverse Digital Darwinism’. For a certain group of niche players, technology and business are namely evolving faster than society. Yuval Harari, for instance, illustrates this well with his theory that technology driven companies will decide about what matters. The rationale is that people in need of help are shifting the authority from religion to politics to algorithm driven companies – hence the power of the fittest businesses. It could be argued that this, in turn, will lead to a societal divide where techno-humanists will be in competition with dataists that leave reflections to data processing technology.

Personally, I don’t expect the second tendency to explode on the short term. But the double Digital Darwinism dynamic is undoubtedly present. Companies, organisations, governments and private people need to be aware of it, make up their mind and shape their own role. It is an essential part of having an active role in of the Digital societal thermodynamics.

Digital Darwinism

How can businesses adapt to the rapid pace of technological and societal advancement?

Digital Transformation is a process in which human and corporate society is shifted to new ways of working and thinking with digital and social technologies. As it is fundamentally changing the value proposition to and from the customer, companies and organizations have to adapt. The growing pressure to do so entails several risks if the dynamic is not engineered and managed correctly.

First of all, companies need to be aware that Digital Transformation is not a temporary add-on. It is really the essence of a transformation journey to remain in the game. Failing to understand this can lead to companies losing their relevancy, their value and, in the end, the fundamental market adherence to remain alive.

Likewise, Digital Transformation as such is not about technology itself, but about how companies integrate it to transform their businesses and shape the way of working. It involves a change in leadership, a different thinking, the encouragement of innovation and new business models, and an increased use of technology to improve the experience of an organization’s internal and external customers. It is only by integrating this digital backbone that digital strategies can have a lasting effect.

Frameworks exist to guide this process. But it all starts by understanding what it is about, defining a strategy and turning it into reality with strong management support.

What challenges do businesses face when adapting to Digital Transformation?

Companies need to understand how to evolve to continue to matter by embracing new technological possibilities and looking through the blurring frontiers between offline and online reality. Understanding this requires courage and commitment, especially as pressure on delivery and results remain constant, even during a digital transition period.

This new way of thinking has to take into account changing customer habits and continuously transforming customer segments. One should look beyond the mere ‘selling products’ angle. To keep their added value, companies, organizations and even governments need to understand that the mental mobility of people and their data-stimulated ecosystem have turned people’s need for products in a need for shaped services.

This has a significant impact on the strategic vision. It requires a dynamic silver lining, compatible with interactive work clusters and a hybrid organization. Typically, this results in a new way of working and an appropriate approach to power this way of working. It needs to be adapted to the redefined borders between reactivity and proactivity, and to the attention for real-time service and contextual adaptation. It needs to be designed for agility. An organic compromise has to be found that answers the need for creative freedom, and the need for a solid structure where guidance, management, and development of human capabilities are possible in a structured way.

Sufficient human means and data power need to be developed to get most out of the customer journey. Data are an essential component of the capacity to obtain insights, build decisional strength and attain a speed of reactivity in this new way of thinking, working and acting. They are at the core of developing a digitally quantified intuition.

Altogether, the success of Digital Transformation goes through truly integrating technological possibilities and dynamic customer journeys in the corporate DNA.

What are the benefits of Digital Transformation?

To put it bluntly, the main benefit for companies and organisations that manage to take the Digital Transformation shift and put recurring efforts to stay out of their comfort zone is that they remain meaningful, valued and alive.

Digital Transformation is not about technology itself, but about how public and private organizations integrate technology to transform their businesses. It is a major change journey. A change journey that shapes the present to be ready for an already ongoing future - and that will continue to transform at high speed along the way. It is a new way of thinking about the interaction with customers, about shaping service and product delivery, about organizing an organization - and about creating value. It is disturbing and scary, but at the same time incredibly exciting and full of potential.

In your opinion, what is the next big trend in digital/social technologies?

Digital Transformation induces a company-wide change journey. During the next years, it is likely that companies will put it only gradually in motion. This will be done by combining decentralised change and agile enablers. Subparts of the digital ecosystem can then be catalysed with low-level technologies, like Spark for faster data analytics, Puppet for Agile DevOps, or solutions for optimised App development, web-reactivity and C-level reporting.

I prefer to keep a more macroscopic vision in mind - reconciling results for the short term with the unfolding of medium term potential. Iterations on low-level technologies will continue, as well as on more atypical like block chain. The most fundamental changes, however, will to be driven by Artificial Intelligence (AI).

AI at large concerns not only machine learning, deep learning or other industrial cognitive computing sub-fields, but goes beyond algorithms for technical optimisation. By doing predictive human resources (HR) management, for instance, employee expectations can be anticipated and employees can be identified that need mentoring – or that have a positive impact on others. Even if not every company has the same data and AI power, proactive management benefits the internal dynamic and the outcome on bottom line digital productivity.

Such applications will become widespread in all layers of the digital and social reality. This might sound more soft than futuristic. But the inception is already well on its way. It is really the ‘trend’ that has arrived at the crossroads of useable maturity, corporate acceptance and human added value. The momentum is there – time has come to gain benefits of it.

A sincere thanks to Prof. Jürgen Janssens for taking time out of his busy schedules to collaborate with IGI Global and for sharing his thoughts on Digital Transformation. To read more about Prof. Jürgen Janssens research on Digital Transformation, be sure to check out his article in the recently released Encyclopedia of Information Science and Technology, Fourth Edition.
Disclaimer: The opinions expressed in this article are the author’s own and do not reflect the views of IGI Global.
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