Digital Transformation Management Technology and Innovation

The two-tier digital transition

Written by Lola Thomas

The digital revolution, also called the Third Industrial Revolution, is increasingly emerging in discussions. It refers to the advancement of technology from analog electronic and mechanical devices to the digital technology available today. This digital revolution enables a new digital economy which radically change our societies and our economies. Internet has an impact on virtually every aspect of our lives: our habits, our relations with others, our jobs and the way we do business.

Companies have clearly understood the need to start a digital transition. In France, for example, according to the barometer of Idaos Lab digital and social, 91% of interviewed companies consider digital as a strategic focus and 80% have begun a digital transition. However, today, a lot of companies are still very uncomfortable with the digitalization: 1/3 of companies don’t have a new department dedicated to this digital transition. Moreover 59% of French people buy online but only 11% of companies sell online, that demonstrates the digital unawareness of companies.

These behaviors are real strategic errors which may impact competitiveness and generate inequalities between traditional companies and companies born after digital transformation of 90’s – 2010’s.

THE DIGITAL TRANSFORMATION: A TREAT OR AN OPPORTUNITY?

In 2014, Neelie Kroes, who was the EU Commissioner for the Digital Agenda, said that “the lack of digital competences is a new form of illiteracy. When I was young, we had to learn to read and write. Today, we have to learn to do researches on the Internet and to develop”. All collaborators do not have the same digital skills: some are native, some are not. Not everyone is innovative, connected and collaborative.

The Digital IQ yearly study by PwC shows that 80% of CEOs want to develop digitalization in their company, only 20% of them think they have the right digital skills. Moreover 74% of those interviewed (CEOs and IT manager) are unable to understand and adapt quickly to technology changes. This means that these leaders don’t take into account the digital revolution in their business strategy. This situation is a matter of concern because the technological advances will change many things in companies and theirs practices; only innovative and dynamic companies will stay on course and be profitable.

The digital revolution changes many practices in companies and cause different kind of inequalities:

  • Skills inequalities: new behavior skills are requested (innovative, “out of the box”…). The performance is no longer technical but relational skills, but this kind of competence cannot be acquired easily. Indeed, it’s not easy to change the behavior of a collaborator.
  • Self-training inequalities: today many MOOC are available free online. It’s a really good thing because training has become essential. Collaborators have to become autonomous to maintain their employability. But all collaborators do not know which kind of training is the right training, we are not equals.
  • Innovation inequalities: it’s important that innovation is in all departments and not only R&D. All collaborators have to call their working method into question, do watches, benchmarks.

That’s why the digital revolution can be a threat for traditional companies with a rigid and complex model. For those, it is easier and the digital revolution is an opportunity in particular for new companies or the companies in digital (for examples pure players like Amazon…). They can develop and adapt them very quickly; it is not necessary to start over. Moreover, this kind of companies is often managed by digital native and obligated to be very innovative which simplifies matters.

HOW COULD TRADITIONNAL BUSINESSES JUMP ON THE BANDWAGON?

Digital has to be a strategic pillar for companies. In this case digital is a big opportunity for companies but this means we have to change a lot of things in work organization.

  • First traditional companies have to rethink the ways of working (workers) thanks to new digital tools (intranet, social networks, app …). This a real opportunity because these new tools enable to facilitate exchanges and to organize better his working time (with co-working spaces, telework…).
  • Companies have to maintain the skills of their workers. Collaborators need to be autonomous, responsible, have source of proposals and capable of reacting very quickly to technical progress.
  • Reinforce the role of Information System Direction and Human resources Direction to promote innovation and recruiting diverse talent. Indeed the HRD can resolve recruitment difficulties and of anticipation, can change the corporate culture implementing new model of organization.
  • Recruit digital talents in all services. It’s mandatory that recruiting digital experts in all services in particular in communication and marketing divisions. It is the first and the most important service which has to integrate digital experts and digital team, data experts…

Finally the digital transition won’t wait for us. It is an essential phase to retain or regain market share even if it is rather painful. All companies in all sectors are impacted and it is necessary to take digital transformation seriously. To conclude the digital transition will change our corporate culture and it will enable innovate, to do more benefits and to work more pleasant.

About the author

Lola Thomas