The ‘Digital’ Butterfly Effect in the Business World
Can a butterfly flapping its wing in New Mexico can cause a hurricane in China? It seems it can. The much talked about, Butterfly effect, per the Principle of Chaos, states that small changes in the initial conditions can lead to drastic changes in the results.
More popularly, the butterfly effect has become symbolic to the existence of seemingly inconsequential moments that alter history and shape destinies. Incidental at first, they create filaments of cause and effect that, in retrospect becomes apparent in changing the course or rippling through the global economy.In today’s era, we are witnessing a similar phenomenon, but at a new and accelerated level of transformational disruption. The ‘Digital’ butterfly is here and it has started flapping its wings diligently.
The digital world is now very much a part of our real world. The 20th century has seen a rapid expansion in the digital transformation, with the new gen technologies like machine learning, deep learning, data science and analytics playing the role of the catalysts. Forbes predicts that by 2018, 45% of CIOs will shift their primary focus from the physical world to the digital world where they move away from traditional BPM and optimization to deliver more scalability, predictability, and speed. As per the Altimeter Group, digital transformation is already contributing towards key business KPIs for instance: increased market share (41%), increased customer engagement in digital channels (37%), more positive employee morale (37%), greater web and mobile engagement (32%), and increased customer revenue (30%).
The digital butterfly effect can be metaphorical to the massive disruption in a business process, due to a single byte of data. With the emergence of new age technologies and the availability of data, Digital transformation is reshaping the existing operating models as well as the value proposition in most of the major industries. It improves business efficiency in B2B models and customer engagement in B2C companies, thanks to Cognitive technologies and predictive analytics. Almost all the industry sectors are experiencing the difference that digital transformation brings in their business. Let us elicit a few examples.
The Retail industry is an early adopter of digital transformation, in terms of predictive analytics, IoT and smart devices, data science approach for recommendation and assistance, cognitive tools and platforms for customer engagement and more.
The Banking sector witnesses the impact of digital transformation in terms of business efficiency and customer experience through digital platforms for customer engagement and automation in back office operations.
The Healthcare sector is embracing the digital disruption through the active employment of robotics in surgeries and patient care.
The Manufacturing sector is breaching the walls of digital transformation with the adoption of IoT and is witnessing the next Industrial revolution in the form of Industry 4.0.
The common thread connecting all these technologies is the need for achieving excellence in business efficiency and customer experience.
The key challenge that businesses face while embarking on the digital transformation journey is the ‘Change Management’, which can be considered both as an internal as well as external issue. The majority of organizations are married into the legacy model and they are skeptical towards change, which comes in form of learning new skills, new technologies and new business models. The other major challenge is the lack of clarity in mapping the customer’s digital journey. The digital needs of each organization are unique and require a substantial assessment and planning. The organizations, which embark on this journey by blindly following others’ footsteps, may fail in reaping the real benefits of digital transformation.
To win the digital transformation journey, organizations should arm themselves with the right ammunitions and tools rather than merely joining the cause. For this, every organization requires the right partners, tools and data models, which helps them to map their ROI against the investments.
The new digital world is here to stay, the sooner we embark on the journey, the better are the odds to win. However, what is important is that the organizations navigating the path of digital transformation need to follow the right approach at the right time. They need to be mindful of the fact that just like the ‘single flap of a butterfly wing’ a single data, a single tool, a platform or a few lines of code can either lead to a progressive journey with substantial benefits. The wrong choices, on the other hand, can become a recipe for disaster and take them downhill. If they can leverage every single flap of the ‘Digital Butterfly’, making the right choices, walking the road leading to digital transformation is not a difficult feat at all.