Don’t Forget the Basics in Digital Transformation

Why do managers so often lose sight of the basics with respect to digital business?

One reason: It’s easy to forget the essentials in an area that changes so quickly and that is so focused on the latest and greatest. Computing power, storage capacity, and networking speeds double every 9 to 18 months, creating new tools and platforms for doing business. The ride-sharing platform, Uber, and the enterprise social media platform, Slack, are both only eight years old, yet they both have had a significant impact on how work gets done. As recently as 2012, companies were asking whether Facebook could successfully transition to mobile environments. Today, nearly 80% of overall platform use — and more to the point, 70% of Facebook revenues — comes from mobile platforms, and many companies are now adopting the mantra “mobile first” when it comes to digital business.

Second, managers forget the fundamentals because the responsibility for digital business is often moving elsewhere in the organization. Responsibilities that were once the purview of the chief information officer or the chief digital officer are increasingly coming under the auspices of the chief marketing officer or the chief human relations officer. These executives are often new to the world of digital business, having little experience managing in a digital environment. So while some with years of experience may take these things for granted, many of the new executives currently leading digital initiatives may not.

What fundamentals are digital leaders most at risk of missing? Although by no means an extensive list, there are three particular business basics that I often see managers forget:

  1. When it comes to digital transformation, don’t forget the business case. Often, managers become so focused on the technological aspects of digital business that they forget about why they are engaged in these efforts to begin with — to improve the way their company does business. Digital transformation is only about technology in part; it is also, and more importantly, about using new technology to enable novel or more effective business strategies. Managers often believe that they need to be in mobile, analytics, AI, or other emerging technologies without being able to clearly articulate why they need to invest in these technologies — or what business purpose they could serve.

    It bears repeating: When beginning a digital business initiative, be sure you know why you are beginning it and what your business goals are.
  2. Top management support is key for success. Managers who aren’t directly involved in technology functions often assume that they are not “digital” managers. But as companies begin to engage more heavily in digital business, all managers must become digital managers. Whether directly involved in implementing the technology or not, managers must understand the business case for digital initiatives and what other aspects of the organization need to be aligned to accomplish those goals. When executives simply delegate responsibility for digital business to the technologists, it is a recipe for near-certain failure. Not only does top management involvement in and direct support for digital business initiatives signal to the company that these initiatives are important, it can allow the other aspects of the organization to become aligned with these goals.

    For the many top managers who don’t believe they have the technological knowledge to effectively lead or support digital initiatives, it’s important to realize that it’s much easier to teach executives what they need to know about digital business than it is to equip technologists with the managerial experience and strategic insight they would need to lead digital business efforts effectively.
  3. Enable and empower your employees to succeed. Even with strong top management support, digital business initiatives cannot be successful simply because they have a mandate from the top. If you just expect employees to engage in new digital business processes because your company adopts a new digital platform, you’re in for disappointment, because they won’t. Employees typically don’t have the time or the know-how to figure out new ways to work on the fly and in the context of their existing job responsibilities. Managers must give employees opportunities to succeed in digital initiatives.

    These opportunities can come in a number of forms. First, employees should be provided with adequate training to learn to engage the technology and digital processes effectively. Training need not take the form of traditional classes; it may simply mean ensuring that adequate resources are available online to help them learn (and ensuring that employees are aware of them). Alternatively, it may mean that employees are moved within the organization more frequently so that they can learn other ways of doing things from coworkers.

    Second, employees must be given time and space to adapt. Employees are very good at sticking with established ways of doing things, because they are safe and familiar. New ways of working requires spare time and cognitive resources to learn the new system.

While these simple lessons aren’t new, and certainly aren’t enough for successful digital transformation on their own, they bear repeating — because no digital business initiatives will be entirely successful without them.

MIT Sloan Management Review

Why Can’t We Have More Than One Digital Strategy?

In “How to Develop a Great Digital Strategy,” an article published in the winter 2017 issue of MIT Sloan Management Review, authors Jeanne W. Ross, Ina M. Sebastian, and Cynthia M. Beath wrote about the importance of having a digital strategy that helps guide executives as they lead and monitor digital initiatives.

In their article, Ross, who is a principal research scientist at the MIT Center for Information Systems Research (CISR); Sebastian, who is a research associate at CISR; and Beath, who is a professor emerita of information systems at the University of Texas at Austin, argued that executives need to make a clear decision: whether to pursue, as they put it, “a customer engagement strategy or a digitized solutions strategy.” They advised that companies need to select one of those two strategies.

But several readers questioned the notion that executives need to choose one focus or the other (as opposed to pursuing multiple digital strategies in tandem). For instance, Kaiser H. Naseem, the Dubai-based head of banking and digital finance advisory services at International Finance Corp., wondered why customer engagement and digitized solutions strategies couldn’t be combined. In his industry, he argued, it’s difficult to separate digital solutions from customer engagement. “Without a good digital solution,” he wrote, “a financial institution may not be able to create positive personalized experiences that engender customer loyalty.”

Making Choices

In an email conversation, MIT Sloan Management Review raised Naseem’s question with Ross, Sebastian, and Beath. They responded:

“Companies must choose one digital strategy, either customer engagement or digitized solutions. The goal of customer engagement is to address customer needs and generate loyalty through a personalized experience. Like all strategies, developing digital business strategies involves making choices — both what you will do and what you won’t do. If a company doesn’t explicitly prioritize one goal over another, it puts senior management in the position of constantly weighing the trade-offs whenever there are decisions about resource allocation or organization structure. If you don’t make your strategic choice explicit, you will spend too much time debating the priorities.

“Beyond the investment of time, not choosing hinders efforts to integrate a company’s products and services. Invariably, the sales and service people will operate in their own customer engagement silo, while the product people will operate in their own digitized solutions silo. Obviously, there will be communication across the silos, but integration — as seen through the eyes of a customer — will be elusive.

“Finally, when you choose one strategy over the other, you will develop a technology base designed to implement that strategy. Customer engagement strategies often demand exceptional customer data; a digitized solutions strategy, on the other hand, might revolve around core systems targeting product life-cycle management or the sensors and analytics built into solutions involving the internet of things.”

MIT Sloan Management Review

Ali Baba’s Magic: ‘Open Sesame!’ And Digital Transformation

Remember the childhood story, “Ali Baba and the Forty Thieves”?

“Open, sesame!” was the magical phrase that the poor woodcutter Ali Baba uttered to open the door of a secret cave in which 40 thieves had hidden bags of gold and treasure. These words, along with the power of his voice, gave him access to that fortune and changed his life forever.

We are on the cusp of an “Open, sesame!” moment that promises to change our lives through digital transformation. It’s a fact that our lives are becoming more digital. We buy, work, store information, and even communicate with other people through media and digital platforms. I never owned a laptop until the age of 35, whereas my daughters have always had laptops in the house, and they learned how to use them much earlier than I did.

Whether we like it or not, digital transformation is creating a new era. It is changing how we do things and how we live, and many of us are already fully immersed into it. It also offers us a great opportunity to be more effective, efficient, fast, and agile.

As consumers, we expect ultra-connected experiences. Whether in-store, on the web, or via a mobile or wearable device, we want all our interactions to be simple, effortless, relevant, and lightning-fast.

The Internet of Things has already started to change our lives. For example, connected cars may know your preferred temperature at home and adjust it accordingly. A mobile app is connected with all smart home devices to alert you of anything suspicious happening while you are away. It can send a list of items you need when you approach a grocery store. Drones enable you to tour properties to help choose the right one.

To reach 50 million users, radio took 38 years. Google took 6 years, and Google+ just 88 days. The Pokémon Go game hit 50 million users in just 19 days!

Our lives have become a collection of mobile moments in which we use mobile devices like magic wands, to get what we need, wherever and whenever we need it. We use our smartphones to do online banking, post family photos, check in with social media, send e-mails and text messages, search for restaurants, and book movies. Oh, and also to make the occasional phone call.

We are alerted of our appointments and meetings even before we’ve had breakfast. A weather app updates us on the day’s forecast. To ease our commute, the GPS in our car alerts us on traffic and suggests alternative routes to get us to work on time.

We have also become more health-conscious, thanks to wearable devices like Apple Watch and ctivity trackers like Fit Bit, Jawbone, Google’s smart contact lenses, etc. Wearables like Oculus Rift VR enable us to enter into the exciting new realm of augmented reality, which enhances what we see, hear, and touch.

Big Data analytics is an ideal entry to digital transformation. It is like turning the lights on in a dark room: Every interaction we have with businesses—including point-of-sale transaction details, loyalty card information, surveys, and social media postings to Facebook, Twitter, Pinterest, and more—provides deep insight into our behavior, attitudes, and opinions, which businesses can leverage to improve relationships via hyper-personalization.

Voila! Life is simplified.

Ali Baba’s “Open sesame!” may have come from a childhood fable, but digital transformation is reality – and it is changing everything.

For more about the power of digital transformation in retail, see Small And Midsize Retailers’ Digital Strategy Is All About The Shopper.


Internet of Things – Digitalist Magazine

Reframing Growth Strategy in a Digital Economy

Digital technology is radically changing the behavior of individuals, corporations, and entire societies, and disruption seems to be the new normal. CEOs are faced with the dual challenge of protecting their backyards from upstarts and incumbents while simultaneously devising strategies that will guide their growth for the next five years.

For most, this is a daunting task. If you are a senior executive faced with these challenges, how do you ensure the continued growth and sustainability of your company? Or, to put it another way, What’s your play?

Some Fortune 500 companies are doubling down on defensive strategies, promoting cost efficiency and productivity to protect their core business. Others are attempting to “future-proof” their business model through acquisitions. For instance, following a five-year acquisition spree, Walmart’s $ 3 billion deal with signals a serious commitment to competing with General Motors Co. is clearly thinking about the future of car ownership with its (unsuccessful) attempted acquisition of Lyft.

None of this is wrong, and the logic makes sense. But is either approach sufficient to sustain the growth and health of your business and demark you from competition longer term? We believe not.

When challenged by a host of disruptors who are exploiting traditional market dynamics, finding growth opportunities in increasingly onerous regulatory and competitive conditions is hard these days. And harnessing the power of constantly evolving digital technology to break down well-established barriers to entry and devise new business models is a complex endeavor. To rise above the fray in this challenging context, you need to find ways to fight a battle you’re well positioned to win. For leaders of big companies, this means capitalizing on an ability to do things the disruptors simply can’t — set an ambitious vision, plan globally, invest strategically, and mobilize considerable resources to assert digital dominance. In other words, elevate above the level of the disruptors and transform your scale from a liability into an asset.

This may sound easy, but it isn’t. Too many companies are still formulating their growth strategies based on traditional growth planning approaches — yearly cycles, historical analytics, and incremental thinking. With the velocity and uncertainty that characterize this new digital economy, traditional growth planning has reached the end of its useful shelf life. It just won’t get you there.

Companies need to reframe the way strategy is formulated around three fundamental truths, and plot their next steps by embracing and owning these truths:

Truth 1: You can’t analyze your way to the future; you need to invent it.

Traditional analytical models that have been the bedrock of strategic planning for years are important as a means of establishing a foundational understanding of the world that exists today and the current opportunity areas. However, if you are looking to define a strategy that will enable your company to achieve disproportionate growth and create competitive advantage, you need to push beyond pure analysis.

What if the razor industry, dominated in the United States by giants Gillette and Schick, had looked beyond known competitors to anticipate the value in a direct-to-consumer subscription service? Would the e-commerce razor delivery company Dollar Shave Club have had such a meteoric rise? And would powerhouse Unilever, which acquired the startup in 2016, have expanded as meaningfully into the shaving business?

What’s your play?

Successful digital strategy requires a blend of deductive analysis and the type of inductive reasoning that powers the creative leaps that anticipate, and often open, fundamentally new markets. To help your organization see into the future, focus on creating an organizational culture that values a mix of inside-out and outside-in thinking.

Think about what the world will look like five to 10 years out — across a range of different industries, not just your own. In this future world, how do the needs of your current consumer change? Are there new opportunities outside of your existing consumer base or current product offerings?

Next, imagine removing your company’s existing business and economic restraints from the equation. How would you use digital technology to overcome barriers and capture these opportunities? Run this exercise with a tiger team of out-of-the-box thinkers from across your organization. Let these inputs form the basis of your strategy formulation process.

Truth 2: Competitive evolution is no longer linear — it’s exponential and disruptive. Your strategy needs to reflect these dynamics.

Defining a destination point that’s three to five years out is critical for focusing resources in a manner necessary for scale. However, the strategy can’t just be a fixed game-plan that serves as marching orders for the foreseeable future. Strategy needs to take the form of a living, breathing process. Much like software development has evolved from traditional waterfall models to agile development, strategy formulation must embrace an approach that adjusts to rapidly shifting conditions in the market. Without dynamism and nimble capacity for adjustment, companies find themselves in situations where they simultaneously miss opportunities and create attractive windows for disruptors to attack.

Consider that as late as 2008, former Blockbuster CEO Jim Keyes stated that Netflix, the video rental company that started out by mailing discs through the postal service and now streams media and video direct to consumers, was not “even on the radar screen in terms of competition.” Yet within two years, Blockbuster, which built its name on brick-and-mortar video-rental shops, was bankrupt. Netflix, meanwhile, was on pace to acquire over 65 million global streaming subscribers. The decision of Netflix CEO Reed Hastings to go all-in on streaming was a strategic bet against Blockbuster. Hastings knew that Blockbuster’s traditional advantages — retail network, inventory, and sales staff — would quickly become unsustainable liabilities in the digital world.

What’s your play?

We’ve reached the end of the well-defined strategic planning cycle. You and your team must design a process through which you can continuously assess market dynamics, monitor the impact and opportunities presented by business and technology changes, and adjust direction to ensure you are constantly moving toward the goal. Don’t make digital strategy a slave to your budgeting process. Create a dynamic series of sprints with a clear endgame in mind — and build flexible investment capacity to respond.

Truth 3: Ambition for growth isn’t the problem. Your biggest hurdle may stem from an inability to catalyze the organization into action.

Big companies don’t lack ambition. More often than not, their primary challenge is getting leadership to put sufficient tension on the company to start the digital transition. Many organizations believe that defining the goal will be enough to spark the action required to capitalize on the opportunities. In reality, many of today’s Fortune 500 companies are not designed to make bold moves. Multinational companies are optimized for efficiency, which makes it challenging for fundamentally new initiatives, ideas, and processes to gain traction. In keeping with the desire for operational efficiency, many companies are staffed with employees who are focused on performance excellence, implementation, and mitigating risk. Compounding these inherent challenges, capital flows to the lowest-risk ventures. Within public companies, this is exacerbated by the need to report quarterly earnings and manage earnings per share.

Barnes & Noble has grappled with these challenges for years — first failing to invest aggressively in online bookselling during the early rise of Amazon, and then playing the laggard in the e-reader race. Reeling from a series of brick-and-mortar closures over the last five years, the book retailer is struggling to galvanize action behind a solid growth strategy.

What’s your play?

From Six Sigma to agile development, strategies within today’s modern organizations are devoted to constant process improvement. While there is value in these models, if your efforts are entirely focused on the perfection of an established process, it is difficult to devote time, energy, and investment to new digital plays. Provide space and acceptance across your teams for experimentation and ideation. Build time to explore new approaches into your organization’s key performance indicators (KPIs) or objective and key results (OKRs).

And remember, for any growth plan to succeed, you must have a plan to catalyze action across the company. This isn’t plain sailing, so how do you go about it? Give your team a common enemy to rally against. Create a persona of the competitor-of-the-future likely to disrupt your business — where will it happen, and how? Socialize this personification widely; make sure that every department knows what kind of competitor the company is up against and why their department’s input matters to win the battle.

Business leaders focused on generating sustainable growth are right to be concerned about potential disruption. But planning for the future by focusing exclusively on the realities of today is a shortsighted approach, and one that may result in the eventual demise of leading global companies. Big corporations can use their scale to fight back. To achieve the desired result, your digital growth strategy needs to be future focused, dynamic, and should provide a rallying cry that unites your entire business.

MIT Sloan Management Review

Telcos Transforming Digital Lives with Connected Home Experiences

I’m delighted to have my first blog post here on IoT@Intel. In my position as GM of the Telecom Business Line at Intel I work in partnership with the industry to find innovative ways to enable next-generation broadband access technologies for connected homes.

Consider how we live our digital lives in our homes. I propose that it is entirely achievable for telcos to seamlessly deliver the smart, connected experiences that ease the burden of running a home, enrich daily life, and assure peace of mind in our domestic spaces. In my daily work, I see first-hand how Intel technologies are enabling telcos to transform the networks and infrastructure that connect “things” in the home and provide consumers with the gigabit connectivity they have come to expect.

That’s why I’m excited about what Intel has planned for Broadband World Forum in London, October 18-20. Our Connected Home team will demonstrate how the Intel AnyWAN transceiver VRX Series is bringing value to today’s deployments.

I also invite you to join my colleague Scott Kovesdy to learn how Intel technology enables smart home experiences through next generation connectivity in the home. Scott is responsible for driving the smart home strategy for Intel’s Connected Home Divisions and has more than 20 years of experience in digital entertainment and connectivity. His is sure to be a great presentation. View the session.

So, why is Intel involved with the telcos industry in the first place, you might be asking. I’m glad you asked. Let’s take a look at how Intel technology is enabling rapid progress forward in this exciting arena.


Enabling Performance

A family communicates through their Intel IoT Gateway-connected devices while planning a vacation to Alpha Centauri. It should be lovely this time of year.

With the massive growth in data volumes, there is an escalating need for higher broadband access bandwidth. The Intel AnyWAN transceiver VRX Series satisfies these requirements by using existing copper phone wire, enabling higher data rates in the gigabit range. The VRX series supports legacy ADSL, VDSL, and vectoring, while adding the new extended standard for 35 MHz VDSL.

The VRX series is also prepared for emerging capabilities, which will offer very fast broadband speeds over shorter distances. Backwards compatibility and seamless interoperability are the key elements necessary to maximize current investments. The stage is set for high-speed deployments, with offering gigabit performance over existing infrastructure.


Backwards-Compatible Solutions

A woman and a boy look at a laptop.

I hear from telcos and service providers that they want a solution that does not require a rip and replace of current systems. This is one of the things that really excites me about the Intel AnyWAN transceiver VRX Series—it syncs with expectations for a backwards-compatible solution able to support ADSL, VDSL, and vectoring. The series also supports the extended standard for 35 MHz VDSL—including an optimized implementation for two-pair bonding.

One of the reasons we enjoy working with telcos is that it’s such a natural fit. Intel brings more than a decade of system experience, helping ensure telcos are equipped to address all types of connectivity, today and in the future. In fact, Intel has been a major contributor to standardization leading to multimode VDSL2 and chipsets to enable our OEM customers and service providers to design leading-edge and future-proof broadband gateways. This will equip telcos to cost-effectively leverage and upgrade their copper-based networks to deliver gigabit speeds.


Seamless Interoperability

A woman interacts with connected devices in her laboratory, learning new ways to create high-protein tuna enrichments for her cats. To some people, the room may look like mere kitchen, but to her cats it is the most amazing place on Earth.

Interoperability is key to success. The Intel AnyWAN transceiver VRX Series helps ensure that current disparate systems can be integrated and work together. That’s why Intel is committed to promoting open standards and a thriving community of innovators focused on developing smart, open technologies. The increased breadth and choice of solutions bring economies of scale to telcos and end users.


Low-Power Connected Home Networks

A woman falls asleep on the couch while optimizing her connected home gateway. Luckily the security of the Intel IoT Gateway has her covered while she slumbers.

Yes, there is a way to keep power consumption down even as the home network grows. The Intel AnyWAN transceiver VRX Series limits power consumption by adhering to a voluntary European code of conduct focused on keeping power consumption down. Intel solutions enable and accelerate the evolution of connected homes—without adding to the strain on the existing power infrastructure.


End-to-End Security for Safer Connected Homes

A girl listens to Mozart.

Connected home gateways need to deliver more than great experiences—they also need to deliver great security. The Intel AnyWAN transceiver VRX Series is optimized to work with Intel AnyWAN network processors for telcos networks. This provides the foundation for new smart home gateway systems with an unsurpassed capability to deliver content, surf the Internet, manage in-home networks, and support new smart home services. As part of the overall Intel AnyWAN solution, the Intel AnyWAN transceiver VRX Series addresses needs related to quality of service (QoS), the Internet of Things (IoT), Wi-Fi, and security.

We’re in a time of tremendous change that has the potential to greatly improve the way we experience technology in our homes. We look forward to seeing you at Broadband World Forum. Visit the Intel booth, Stand #B70, for more information.

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