Digital Transformation - The Business and the IT

Digital transformation as an archetype is a business strategy that is fostered by the exponential growth and technological advancements in digitization of all "things" that are essential to the progress, modernization and survival of human civilization.

The fundamental principles of such a strategy centers around rethinking and refreshing, the value propositions of modern businesses, in terms of being a value added or a value differentiated player in the larger ecosystem. Some of the business principles that are increasingly becoming common place are:

1. Building platform-based business models - where the unit of value creation and value ownership is introduced and continuously generated by two of more distinct types of consumers (givers or takers) of the platform capabilities.
2. Harnessing the power of customer network effects - where the customers themselves are micro-champions and brand ambassadors of promoting (without bounds) the value proposition.
3. Re-imagining competition as more of a co-opetition - where businesses start collaborating across fluid and transparent industry boundaries to address competitive threats from asymmetric industries.
4. Leveraging technology - where businesses look at technology to be that single constant of change, and to take advantage of the advancements to climb up the value creation ladder.

The business benefits from digital transformation can be classified into Connected Operations and Connected Products.

To realize digital transformation, Information Technology (IT) is one of the most critical enabler.

To harness the growth of asset digitization through advancements in sensor, IoT, and other emergent technologies, the approach must factor in the ability to:

1. Connect - to the heterogeneity of digitized and "talking" assets; and collect the relevant data.
2. Contextualize - the manufacturing, operations, process and product data from assets with the supply chain data, consumer consumption data, external events and ambient condition data, among possibly many other relevant data sets.
3. Correlate - the data sets by applying Machine Learning, AI and Cognitive algorithms and techniques to convert assets into Smart Assets.
4. Mature - Smart Assets into a network of Connected Assets; leverage embedded and distributed intelligence to develop what Michael Porter calls as Equipment Systems; from Equipment Systems to more futuristic Systems of Systems.

Embedded hardware and software technologies are key underpinnings to the IT component of digital transformations - to modernize physical assets into cyber physical systems (CPS), and to combine multiple CPSs into higher order systems of systems.

The combined business, IT and societal value of digital transformations may be a combination of, but not necessarily limited to, some of the following:

1. Higher production yield.
2. Reduced machine downtime.
3. Improved production quality.
4. Reduced maintenance costs.
5. Reduced production cycle times.
6. Reduced per unit product cost.
7. Enhanced safety.
8. Improved after market services.
9. Foster greener initiatives.
10. Elevate workers from the mundane to higher skilled jobs.

The combined societal benefits of digital transformations is an ecosystem that weaves together the best of Smarter Quality, Smarter Maintenance, Smarter Operations, Smarter Energy, Smarter Supply Chain Management, and Smarter Worker Safety.