Digital Transformation, Exponential Technologies and the Shape of Industry

By Meera S Datta

Digital technologies are evolving rapidly and changing the society as a whole. Read this article to know how digital transformation and exponential technologies shaping the industry.

Digital technologies such as the computer & mobile phone, 3-D printers, smart sensors, social media technologies, internet, wireless cellular networks are evolving rapidly and changing the society as a whole.  Industries, be it IT, Electronics,Manufacturing or Finance are impacted heavily by the rapidly evolving digital technologies. The article examines briefly the emerging scenario and trends predicted.

What is Digital Transformation?

The overall changes taking place in our human society due to application of digital technologies is termed Digital Transformation. The process begins with Digitization. 

Digitization refers to the conversion from analog to digital form.  For example, converting hand-written ledgers & bills to digital documents, recording speeches & music to produce digital forms, etc.

The digital formats not only enabled ease of storage but also transfer across geographies using networks thus facilitating making changes to business processes leading to Digitalization.

Digitalization refers to application of digital technologies to change business processes and models for effective value creation. An organization can undertake several digitalization projects to bring about changes in its various operations. Digital Transformation refers to the overall effect of digitalization which transforms the business itself including business strategies.

The underlying technologies responsible for Digital Transformation were earlier referred to as SMACS – Social, Mobile, Analytics, Cloud, Security. SMACS has now given way to newer technologies such as AI & Machine Learning, Internet of Things, Blockchain, etc. leading Accenture to invent a new term DARQ - distributed ledger technology (DLT), artificial intelligence (AI), extended reality (XR) and quantum computing. 

‘Digitally mature’ organizations will have integrated the whole of SMACS & relevant DARQ into their business DNA while less mature organizations will have integrated one or more of the technologies into their business processes with little interplay amongst them.

What is Exponential Technologies?

The EY report defines exponential technologies as those technologies ‘whose performance improves by a double or triple digit every year on the same cost basis. Computing technology, Nanotechnology, Sensor technology, being some of them. This leads to derived exponential technologies such as 3-D Printing, Artificial Intelligence, Machine Learning, Robotics, Internet of Things, Big Data Analytics, Wireless Sensor Networks. As can be seen there are overlaps amongst SMACS, DARQ and exponential technologies. Exponential technologies are also fueling the 4^th Industrial Revolution or Industry 4.0 characterized by smart automation. Growth and adoption of exponential technologies will lead to launch of smart connected products & services, creation of highly optimized supply chains, new business models, sustainability solutions according to EY. 

How is Digital Transformation and Exponential Technologies shaping the Industry?

Digital Transformation technologies, whether SMACS, DARQ or Exponential, have led to a dramatic change in business models and organisations leading to the creation of ‘Network Brands’ as coined by Barry Libert such as Airbnb, Uber/Ola, Oyo, WeChat, Alibaba, Paytm, etc.in contrast to the ‘Traditional Brands’.

Barry Libert also talks about a new business model called ‘Network Orchestrators’ that relies on network as capital unlike traditional business models that rely on physical, human or intellectual capital. The ‘Network Orchestrators’ model is a contributory model, Facebook being a good example. The model concentrates on meeting human needs beyond food, clothing and shelter, such as self-expression, democratization of information, ease of access, etc. It demands a new kind of leadership and workforce.

EY’s Future of Jobs in India report along with NASCOMM and FICCI predicts that in 2022, the IT/BPM (Business Process Management), BFSI (Banking, Financial Services and Insurance) and Automotive sectors will be impacted majorly. In the IT/BPM sector alone, 10%-20% of the workforce will be engaged in jobs that do not exist as of now while 60%-65% will be in jobs with radically changes skill sets. Among the long list of jobs that are expected to emerge, some interesting ones are VFX Artist, RPA (Robotic Process Automation) Developer, Machine Learning Based Vehicle Cybersecurity Expert, Blockchain Architect, Cloud Architect, 3-D
Modelling Engineer.

To conclude, the shape of industry is changing rapidly. Anything that can be automated – that is rule based routine tasks now performed by humans will be performed by machines. Creative, innovative and design skills that cannot be automated will continue to exist and the demand for creative professionals with excellent design skills will grow exponentially.

About the Author

Meera S Datta is a Associate Professor at NIIT University, Neemrana.