Coursera Course Summary: Digital Transformaiton by BCG

Exponential Evolution of Technology

First, the three exponential laws. The exponential increase of processing power, communication bandwidth and storage capacityare the technological foundation of today's digital transformation.
Second, our minds are tuned to seeing and predicting linear developments, therefore, the first challenge that both individuals and companies need to overcome is one of perception,of understanding how digital technology is evolving.
And last but not least, a gap tends to appear between how companies evolve and the technology potential. This gap is often filled by startups that come to disrupt incumbent players.

Technology Makes the Difference

Impact of technology
digital technology does have a visible impact on business performance.

Some of this impact can be neutralized by the increased complexity
generated by competition, customer demand, or regulation.

Lastly, in practice, making the right technology investments translates
into higher profitability and higher revenue growth. Double digit higher.

Week 2

innovation and technological change can disrupt industries, but disruption is not something new.
some of the underlying drivers and economics of innovation and technological change. Including the notion of appropriability, intellectual property and complimentary capabilities.

the possibility of first mover advantages and winner take all markets.
the competitive life cycle and how competition typically unfolds when industries are periodically disrupted by new innovations and or technology. these disruptions may, in fact, alter the existing competitive order. However, it doesn't have to be fatal for your company.
Understanding these dynamics and underlying economic principles can help us
navigate disruptive innovation and disruptions within or across industries.
And this understanding can help you be the disruptor versus the disruptee.

Big data

The amount of stored data is increasing exponentially with a strong shift from analog to digital.
Big Data can be defined as an enormous amount of unstructured, fast moving data. It can be traced, connected, and analyzed to generate business value and even to transform whole business models.
Big Data is not only a technology question, it is about earning and maintaining customers' trust. This will be the source of a long lasting competitive advantage.

Cloud

The shift to the Cloud is here to stay. It is driven by fundamental shift in technology economics.
There are different possibilities to leverage Cloud services from infrastructure to platform to software,
all the way to business processes as a service.
A company should choose wisely, balancing the business benefits with the capability needs and the economics of any solution.
Among all those benefits of using Cloud services, cost reduction is the trickiest.
Before any Cloud migration, a company needs to carefully estimate its total cost of ownership including maintenance, upgrades, and maybe even re-migration.
Hyperscaleability is key. If you design an architecture with a limitation in mind, remember that you are more likely to underestimates than overestimate your future needs.

IoT

A complete IoT system will have functions of sensing, processing and action. It's aware, autonomous and actionable.
By 2020, we'll have seven to 10 IoT devices per human being on the planet. This is driven by further technological advancement in processing, transmission and storage.
We are not yet in the era of the one Internet of Things. We need to think industry by industry, company by company. What is the specific use case scenario a company wants to pursue? A firm solid partner.
Whatever a company chooses, it should keep in mind, that it needs to factor in the challenge of interoperability. The more modular the solution architecture is, the more likely it is to be durable.

Additive Manufacturing

Additive manufacturing is already a reality. Leveraged by simple consumers as well as industrial conglomerates.
Additive manufacturing will not substitute, but compliment traditional manufacturing whenever more personalized, complex products at small scales needed.
For many industries, increased adoption of additive manufacturing will reshape the value distribution among the players, and dictate new ways of organizing the global supply chain.
Geopolitical implications need to be taken into account, and new regulatory frameworks will need to be thought of as a consequence of blurring boundaries between the flow of physical goods, and the flow of information.

Cybersecurity

There are many different types of cybersecurity breaches. They are fragmented, change over time, and are often used in combination.
Cyberattacks are fast growing risk for individuals, businesses, and governments causing both financial and reputation harm.
Spending on cybersecurity is growing 10 times slower than the number of attacks, leaving many targets more vulnerable to the new more sophisticated attacks.
To build cyber resilience, getting the people part is critical. Remember, having the wrong technology tools only accounts for having 28% of the breaches.

AI

The rise of AI in the business world is powered by a combination of processing speed, learning algorithms, and availability of data.
You should distinguish between General and Narrow AI. All AI you have seen so far is Narrow AI, except maybe in the movies.
AI revenue is expected to grow more than 50 percent per annum throughout 2020.
Early adopters that are able to upscale their talent pool and enforced data governance best practices will keep a competitive edge there.
Even in the short and medium term, AI raises ethical questions that still require policy and regulatory answers.

Blockchain

Blockchain is a protocol to implement a distributed open ledger that securely keeps record without the need of a trusted third party.
Although block chain is at the beginning of it's journey, it has already applications in financial services,
assets traceability, contract management, and many other domains.
There are still multiple challenges associated with blockchain from technology difficulties to questions about the business model and the regulatory framework.
However, if blockchain makes its way, it can completely disintermediate established platform players in today's business ecosystem.

Combination of trends

The list of digital trends is long, and many of the technologies that we know are combinations of multiple smaller fundamental building blocks.
Autonomous driving, or augmented reality, or Industry 4.0, are good examples of applications that came from combining multiple technologies to deliver business value add.
Not all trends are created equal. They're not all the same for all industries and companies.
Explore your own options, and be aware of second order spillover effects, especially from adjacencies.

Strategy driven by digital

The classical linear approach to strategy. Although, still relevant in some cases is not sufficient anymore to guarantee a sustainable competitive advantage.
Businesses need to adopt new approaches depending on the level of uncertainty, or malleability of their environments; adaptive, visionary, shaping, or renewal strategies. 

Business leaders need to permanently choose the combination of approaches their businesses need and run them simultaneously.

Digitize the core

When companies embark on, the digitization agenda, they need to aim for both higher operational efficiency and better customer experience. This is how companies maximize the value they can generate, versus industry peers.
The right lens to rethink value delivery is to shift from focusing on process automation to what they mean for key moments in the end to end customer journey.
To re-design a customer journey, digitization teams can follow a five step iterative process centered on the customer needs and feedback.

New digital growth

Disruption is a matter of when not if. It will happen, and leading companies should strive to disrupt themselves before others do.
The goal is to achieve ambidexterity, the balance between exploitation and exploration, avoiding both the success trap, and the perpetual search trap.
Whether a company builds ambidexterity through the separation, switching, or an ecosystem approach,
it needs to continuously adjust it, allocating resources depending on the business environment, and its evolution.

The core enablers

People and Organizations

Agile scale as a way to balance alignment and autonomy for digital ready organizations by establishing new ways of working. It relies on autonomous multidisciplinary squads that drive end to end delivery of a product or service in an iterative fashion.
Agile increases time to market, productivity and employee engagement.
And last but not least, implementing Agile scale is a multi-year journey that requires a completely transformation of a company's operating model.

Data Analysis

A company needs to start its data and analytics journey with a clear vision closely linked to its business priorities.
The vision needs to translate into tangible use cases, that can serve as a compelling proof of value.
Big data does not need magical capabilities, teams can be created with the right combination of
skills to replace a data scientist unicorn for example.
Businesses shouldn't feel obliged to do everything in-house, they should partner with their ecosystem to
enrich both data sources and analytics capabilities.

Technology

A digital ready technology function is required to keep up with new customer expectation and fast productivity cycle of digital innovators.
As many companies have to continue managing their legacy system, a second gear might be required to drive a separate digital speed execution in parallel.
The ultimate goal is to converge both execution speed in the technology function together with the business side into a single, unified operating model. That is what agile a skill allows.

Ecosystem

A business ecosystem is a network of organizations and individuals exchanging goods and information.
In order to create value and ultimately to ensure mutual survival.
To set up an ecosystem, the first step needs to be a shift in mindset. From an exclusive focus on competition, towards more cooperation. This is what we called the copetition mindset.
Then, the second step is to connect with the right ecosystem partners. Either horizontally, with competitors, vertically, with suppliers and customers, or with other complimentary players from different industries.