Digital Transformation in Brief

Digital transformation

• is the integration of digital technology into all areas of a business, changing how you operate and deliver value to customers.

The core concepts:

• Processing: based on Moore’s law which says that every 18 months our computer will have twice as much power to process information.
• Communication: based on Butters’ law which says that amount of data communicated through a single optical fiber doubles every 9 months.
• Storage: based on Kryder’s law which looks at hard drive storage capacity and state that the amount of data stored per sq.cm of a hard drive will double every 13 months. (Now it’s 16 or 17 months).

Deconstructed Value Chain:

• The less transactions along the value chain (including suppliers, producers, and distributors) meant lower costs and faster time to the market, also the more scale lean to the more efficiency and more profitable accordingly, and based on new technology impacts, links in the vertically integrated value chain became looser and started to Technological evolution change the traditional model of business architecture from a vertically integrated value chain to a stack-based structure.

The stack structure

• reflects the fact that players can compete on different key success factors in different layers; scale at the bottom, innovation of the top.

Solow computer paradox, for Robert Solow:

• implies that technology investment didn’t help us create more economic value.
• Although we don't necessarily see it in productivity numbers, 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.

The very important trends in digital transformation which impact the business:

1- Big Data:

is a collection of data that is huge in volume, yet growing exponentially with time. It is a data with so large size and complexity that none of traditional data management tools can store it or process it efficiently.?

• Types:

1- Structured: Any data that can be stored, accessed and processed in the form of fixed format.

2- Unstructured: Any data with unknown form or the structure is classified as unstructured data. In addition to the size being huge.

3- Semi structured: Semi-structured data can contain both the forms of?data.

• Characteristics:

1- Volume: Size of data plays a very crucial role in determining value out of data.

2- Velocity: refers to the speed of generation of data.

3- Variability: This refers to the inconsistency which can be shown by the data at times.

4- Variety: refers to heterogeneous sources and the nature of data, both structured and unstructured.

• Benefits:

1- Businesses can utilize outside intelligence while taking decisions.

2- Improved customer services.

3- Early identification of risk to the product or services.

4- Better operational efficiency.

2- Internet of Things (IoT):

In 2017 there was 3 or 4 devices connected per each human but now in 2020 there are from 7 to 10 devices connected per each human.

• Characteristics:

1. Aware: of all things surround it including data, GPS, Cameras, and others.
2. Actionable: like analyze its position, drawing a map.
3. Autonomous: communicate, decide from all inputs when and where it go.

• Layers:

1. 1st layer: for the connected objects, like sensors, cameras,..
2. 2nd layer: is the control platform which consider the data and decide what to do next.
3. 3rd layer: is translate all inputs data into actions

• Benefits:

1. Cost Reduction: for example, a study by Deloitte found that predictive maintenance can reduce the time required to plan maintenance by 20%-50%, increase availability by 10%-20% and reduce total maintenance costs by 5%-10%.
2. Efficiency and productivity: One way to leverage the power of IoT to increase company efficiency is to use it to cut down on repetitive or time-consuming tasks. In the work environment, IoT can be used to optimize an office floor plan and mobilize company resources—like copiers, printers, and WiFi bandwidth—for a better workflow and more streamlined and effective approach to management.
3. Business Opportunities: As a result of IoT’s ability to connect products and services as they relate to customer behaviors, more businesses are delivering new or updated products and services to an expanded customer base. With more data available through IoT devices than ever before on customer preferences and product performance over time, businesses are able to use this and predict behavior patterns and needs of consumers better.
4. Customer Experience: Being able to unify any internet-connected device and offer customers an experience through their IoT device of choice is a key selling point of a modern business. This is the reason so many businesses are investing in custom apps in order to better serve their audience across any device or endpoint.
5. Mobility and agility: The nature of IoT technology means that businesses now have the opportunity to let their employees conduct their work from virtually any location—flexibility that can provide key advantages to SMBs in particular. Office leases aren’t cheap, and the IoT revolution has allowed a surge in small and mid-sized businesses changing the way they operate—hiring more full-time remote employees in “work from anywhere” positions.

3- Clouding:

refers to servers that are accessed over the Internet, and the software and databases that run on those servers. Cloud servers are located in data centers all over the world. By using cloud computing, users and companies don't have to manage physical servers themselves or run software applications on their own machines.

• Layers:

1. 1st layer IAAS: Infrastructure As A Service.
2. 2nd layer PAAS: Platform As A Service.
3. 3rd Layer SAAS: Software As A Service.
4. 4th layer BPAAS: Business Process As A Service.

• Benefits:

1. Reliable performance
2. Scaled as the business growth
3. cost reduction of total cost of ownership
4. Users access same files and applications from any device

Additive Manufacturing:

Additive manufacturing (AM) or additive layer manufacturing (ALM) is the industrial production name for 3D printing, a computer controlled process that creates three dimensional objects by depositing materials, usually in layers. It is Opposite to the traditional manufacturing which shaping materials by cut out of blocks of materials

• Phases: Usually, the process of three key phases.

1. First, a digital representation of the object is spelled, either by building it into the design software, or by scanning a real life object.
2. Second, the digital model is sliced into multiple layers of less than 100 micrometers each.
3. And then third, the sliced model is sent to a 3D printer that is creating a three-dimensional object through successive adding of layers of material. That material can be plastics, ceramics or even metals. In reality, there are many variations of this process using different technological solutions.

• Models:

1. FDM: fused deposition modeling.
2. SLA: Stereolithography.
3. SLS: selective laser Sintering.

• 3D printing: In 2015, the overall 3D printing market totaled $5 billion. And is projected to triple by 2020 and to reach 350 billion by 2035. This growth is fueled by multi-technological advancement that made 3D printing more and more mainstream.
• Benefits: Less cost and less Time lead: Traditionally, prototyping required to either build the prototype manually or to adjust the whole production line. Obviously, that costs a lot of time and money. With additive manufacturing however, it is possible to develop a prototype without any set up costs, without the need to disturb the functioning of the production line.

4- Cyber Security:

is the practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks. The economic losses from cyber and hacking attacks Werner around $4 Billion and expected to be $6 Trillions in 2021.

? Common Categories:

1. Network Security
2. Application Security
3. Information Security
4. Operational Security
5. Disaster Reconvey and business continuity
6. End-user education

• Hacking Approaches:

1. Phishing:Low tech Attack; a fake email, text message, or website created to ask for information like visa or passwords or asking for installing a malware on your PC once you open it.
2. Malware: a software downloaded by phishing email or by clicking on a link or from USB stick
3. Acronym DDoS: (Distributed Denial of Service) attack servers then shutting it down.
4. Brutal force attack.
5. Physical breach: walks in the PC to install a malware to steals data or send an email then walks away!.

• Benefits:

1. Protect your business
2. Protect your personal information
3. Allow employees to work safely
4. Protects productivity

5- Artificial Intelligent:

AI is a system that is able to exhibit traits of human intelligence like reasoning, learning from experience or interacting with humans in natural language. This definition feels intuitive, but it is a bit ambiguous. Google buying AI startup DeepMind in 2014 for $400 million and the market Expected to reach $50 billion of AI investments in 2020 including telecommunications and financial services

? Types:

1. General AI is typically what you see in the movies, a complete system that is indistinguishable from a human. It knows or can learn anything humans can learn, has emotions, even has a purpose in life.
2. Narrow AI is less ambitious. It is when a system exhibits human- like intelligence traits on a specific field or task. AlphaGo knows how to play the game, but can't write a cake recipe.

• Fundamental Elements: AI decomposed into 3 elements:

1. Computer power
2. Learning algorithms
3. Training data

• Benefits:

1. Drives down the time taken to perform a task.
2. Enables multi-tasking and eases the workload for existing resources.
3. Enables the execution of complex tasks without significant cost outlays.
4. Operates 24x7 without interruption or breaks and has no downtime.
5. Augments the capabilities of differently a led individuals.
6. Facilitates deck on making by making the process faster and smarter.

6- Blockchain:

is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. It is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger.

? Characteristics:

1. Firstly, it is open: It means that anyone can have access to it and either read from it or write new transactions into it.
2. Secondly, it is distributed: The decentralised database managed by multiple participants is known as Distributed Ledger Technology (DLT). Blockchain is a type of DLT in which transactions are recorded with an immutable cryptographic signature called a hash.

• Benefits:

1. Greater Transparency
2. Increased Efficiency
3. Better Security
4. Improved Traceability

Digital transformation applications: like;

• Autonomous driving / self driving car
• Drones
• Virtual reality
• Augmented reality
• Industry 4.0
• MES - manufacturing execution system

Strategic planning:

o Classical strategic planning: predictable and non malleable, start with analyzing the business environment, his starting, and target position, the gap between the two, then he plan how to bridge that gap with a sequences of programs, initiatives, actions, then he go to the execution mode, reallocation resources and controlling the outcomes versus competition. This approach works in business environments that are satisfying two conditions: highly predictable and non flexible like candy industry like MARS.

o Adaptive strategic planning:unpredictable and non malleable, a trial and error approach, when a new idea or new product new business model doesn’t work, stop it quickly and when it does, scale it up and then go to the next idea like Telenor, a Norwegian telco.

o Vision strategy: predictable and malleable, It takes resources( to build those products or services), efforts (to see what others have missed a u met customer need that no body has addresses) and a lot of persistence ( waiting for the inflection point) like UPS

o Shaping strategy: Unpredictable and malleable, Where they work with a whole ecosystem of suppliers, customers, competitors, policy makers, to gradually build the vision like apple and google

o Renewal strategy: it’s needed in harsh environments, It’s required the company to proceed in two steps, conserve resources to ensure its survival, and then choose a new approach to rejuvenate growth. This can sometimes mean abandoning the core business and going to somewhere less crowded.

Innovation phases:

o Structuring the innovation process to combine the benefits of creativity, curiosity, ingenuity, science, and even chance

o Understanding the end user, their challenges, needs, and wants alongside the resulting impacts of any innovation

o Engaging these end users and other potential stakeholders as directly as possible with some version of the product or services

To organize for digital transformation:

o Decentralized archetype modem: digital activities integrated in each of the existing BU,

each BU has its own digital team, so companies can develop BU specific headed by Chief

Digital Officer (CDO) to lead the transformation.

o Agile scale: relies on small execution units usually 10 to 1t people who are fully responsible to deliver a certain product or feature with full power to take decisions using a minimum viable product (MVP), and some benefits of applying agile scale are:

• For many iterations and constant feedback loops, the risk of taking the organization in the wrong direction decreases quickly.
• The focus on MVP is at every stage keeps high visibility on what value every team is creating. This allows for adjustments at any point in time.
• It also keeps the organization adaptive overtime, In case an unforeseen disrupt or new opportunity arises.
• And last but not least, business impact can be realised much earlier, with early releases and faster time to market.

The key components to build digital transformation:

o You need a business purpose that gets the balance between alignment and autonomy. o You need to translate it to governance and funding principles.

o Then you need to build supporting mechanisms based on three pillars, a new structure defining the squads, the tribes, the chapters.

o New processes less linear are more iterative, more empowering.

o And new behaviors, how you hire employees, how you want them, develop them, promote them.

o And last but not least, you need a measurement framework and technology platform that allow fast iteration, testing and measurement.

References:

https://www.coursera.org/learn/bcg-uva-darden-digital-transformation https://www.impactmybiz.com/blog/blog-5-benefits-of-the-internet-of-things-for-smbs/ https://www.oracle.com/internet-of-things/what-is-iot/ https://www.cloudflare.com/en-ca/learning/cloud/what-is-the-cloud/ https://www.twi-global.com/technical-knowledge/faqs/what-is-additive-manufacturing https://www.kaspersky.com/resource-center/definitions/what-is-cyber-security https://www.nouveau.co.uk/content-hub/top-10-cyber-security-benefits/ https://www.hcltech.com/technology-qa/what-are-the-advantages-of-artificial-intelligence https://www.euromoney.com/learning/blockchain-explained/what-is-blockchain https://www.forbes.com/sites/ilkerkoksal/2019/10/23/the-benefits-of-applying-blockchain-technology-in-any- industry/?sh=6def10a749a5

# BriefMe Feb 2021?