Digital Transformation for a Smarter Tomorrow

Part 1 – The Evolution

Digital technologies have changed dramatically in the last few years driven by lower costs of compute, storage, and network bandwidth. Innovation has further fostered accelerated growth of these technologies than any other innovation we have ever witnessed in history. We are looking into the future where the convergence of these technologies coupled with ubiquitous computing through cloud will start to create a big impact to the society and transform to a smarter tomorrow.

While there are several articles on Digital transformation, thought of sharing the learnings and insights that I have gained in the recent past augmented by a recent IBM panel discussion that I was part of as a panelist. In this three-part blog, I will focus on defining and exploring Digital transformation through the 'first principle thinking' by answering to the most fundamental questions and reason up from there.

For the first part, I will focus on:

• Defining Digital transformation & Smarter tomorrow from the first principle approach
• Evolution of the building blocks of digital transformation (exponential technologies, data centric organizations, platform approaches, and shift towards next generation application development)

Let’s start to understand what Digital Transformation means; the definition of what digital means changes over time and changes with how people see it; few years back it was implementing ERP in an organization to a core process to capture the data, then it evolved to drive some insights to the data and now it is evolving to find ways to do business in an entirely new way. However, at the core, digital transformation is all about capturing data through technology in a different way that we never thought of few?years back and leveraging that data to drive insights to transform business processes in a way that we never thought of few years back. With proliferation of ubiquitous computing, it's imperative now that organizations have to go beyond the ERP means to tap on the data from various sources, use data to not just predict, but sense, innovate new ways of working and explore the potential to create new business models with data at the core.

As the digital age evolves, so does the context of ‘Smarter Tomorrow’. Smarter in the context of future world is not about just being intelligent by having the ability to learn and make decisions in difficult situations, but it's about becoming cognitive of understanding through experience & emotions and applying the intelligence. This cognitive computing will help us transform us to the age of augmented intelligence helping us serve the humanity at breadth and bring equality; for instance, tele-medicine going beyond just getting an expert advice for people in remote locations, block-chain based contracts enabling us to do business with trust with anyone, ag-tech enabling us to understand our planet better to help increase yield and solve through food supply for growing population, 5G & EDGE technology enabling us process massive amounts of data at ease to sense more insights, and so on. For enterprises, as IBM puts it, smarter enterprise for tomorrow means moving from 'Intelligent enterprise' to 'Cognitive enterprise' (source: IBM whitepaper on Cognitive enterprise).

Why is the big buzz now about digital transformation than in the past? - it's because of the rate of evolution of these digital technologies and the rate at which the way to conduct a business is changing dramatically. While organizations are gearing up to adapt to the fast change, it's important to understand the evolution of different digital components:

A) Evolution of exponential technologies fostered by cheap computing power (As articulated in the image below from Deloitte press, computing cost has drastically come down in the last 20 years) and innovation is really changing the way business transacts and collects data.

• New technologies like AI, Blockchain, IOT, Automation, 5G are becoming pervasive; while each of these technologies are bringing impacts, the evolution towards convergence of all these technologies applied at scale is going to change the landscape in an entirely different way.
• In Gartner’s Top Strategic Technology Trends for 2021 (link), the acronym IOB - Internet of Behaviors is introduced indicating the pervasive technologies that helps in predicting behaviors of people to help understand customer journey at the granular level and connect with customers directly to change behavior – this is just an example of how the convergence of multiple technologies are picking up data from all the actions.?

B) Evolution of data centric approach with data at the center of all we do.

• It's all about data in this modern world; between 2010 to 2020, the amount of data created, captured, copied and consumed in the world increased from 1.2 trillion gigabytes to 59 trillion gigabytes, almost 5000% growth (link) and it continues to exponentially grow (image source link). The reality however for organizations is much of these data (~80%) is still unstructured (link) and are not even taped to drive insights out of it. The gap between availability of data and the insight we have generated is only going to go wider with the evolution of convergence of exponential technologies and the constant quest to drive insights will be on.

C) Evolution and the rise of platforms to tap on the technology, leverage data and experiment the future

• In the constant pursuit to tap on the exponential growth of data and transform, organizations are evolving to bring all associates to experiment on these technologies internally through technology platforms; industries are evolving to develop connected platforms for enterprises leveraging technology.

• Platforms are evolving from just being a digital transaction medium between two entities to ecosystem of companies and creating economies of scale (image source: link). This evolution thus will fundamentally change the ways of working on how business process should be run. Enterprises will be forced to take big leap on leveraging the three evolving platforms to not just experiment with new business models, but fundamentally adopt the new ways of conducting business:
• ??i. Industry platforms: many organizations are scaling up on new platforms with new technology, for instance blockchain as a platform enables a forced trust. The evolution of block chain with its varied applications is slowly changing the trust ecosystem in a business bringing more transparency and reliability.
• ii. Cross-Industry platforms: Technology companies are evolving from their core offering of providing software and enterprise solutions to platform companies by leveraging their network. SAP unveiled their 'Business Technology Platform' at their SAPPHIRE 2021 virtual conference, indicating a dramatic shift in how SAP saw it's product from being a transactional system of the past to a means to connect companies at ease in a network through their platform.
• iii. Enabling platforms: several organizations are creating internal IT platforms to experiment on the technologies and help transform; help automate processes, bring intelligence to the workflow, derive insights from data through advance analytics.
• The future of those organizations that will adopt a platform driven approach will be to broaden the success by participating in other platforms, linking to other platforms and ecosystems and in this process, speed will be measured as the speed of change.

D) Evolution of cloud computing to harness data and bring flexibility and agility

• Cloud is not just as a destination but an operating model and necessity to leverage key technologies in an enterprise. It has evolved to be an integral means through which digital transformation for smarter tomorrow will be realized. Cloud has brought in a great flexibility for organizations to experiment with new technologies at ease, to leverage platforms and experiment with data.
• With multiple cloud providers offering various features, enterprises are evolving to tap on these data across public and private cloud through hybrid multi-cloud architecture and really figuring out ways to connect data across various infrastructures.

E) Evolution of next generation applications with fast delivery to market

• ?Applications are the front-end utility through which we harness the power all technologies and put it to best use. The evolution of developing these applications is accelerating at a faster pace; from requiring specialized skills to develop applications to an era of anyone can develop an application. With low-code / no-code development model, 'software development' is now open for all and not deemed to be with experts only.
• For experts however, the future is accelerated development applications using 'cloud-native' technologies such as microservices, API's, containers, etc., and continue develop applications on cloud. The basic architecture of next generation application is in breaking the features into micro-granular components and see it as 'micro-services'. These micro-services are now deployed in 'containers' allowing a greater flexibility for deployment 'container management system' like Kubernetes helping in managing 1000's of these containers for an application to run smooth. The evolution of micro-services along with API enabled features are leading to leverage multiple technologies at once in an application, thus each micro-service can be created independently from others and can use different technology all together – providing the independence, flexibility and speed.
• For organizations, the evolution is change of mind-set on how applications should be developed and change the ways of working - from Agile to DevOps and from Projects to Products.

At PepsiCo, we are embracing digital and the evolution of these digital components; we have got quite a few news articles and will be good to listen to what our Senior Executive leaders are saying about it:

• Listen to our Global CIO Seth Cohen talking about creating 'Digital Products' through a 'Digital Platform' approach and how we embrace the need of evolution through technology
• Our digital first mindset approach to continuously implement new technologies to improve the work environment for all our employees, especially our frontline teams.
• Our data centric approach to understand consumers at a more granular level
• Our PEP Labs initiative to connecting with the start-up expertise around the world: Tech start-ups can engage with our PEPLABS to deliver technology that will change the world; we have already had great success with leveraging tech across multiple areas.

What makes PepsiCo unique is our people; we have incredible strength of great leaders, associates who make a great ecosystem and lead the transformation. This is an environment where the learning curve never stops and here you will find the company strives for a Purpose of existence in the world. We continuously raise the bar on talent & diversity and we have exciting jobs posted at www.pepsicojobs.com; while we have great openings for Technology across all countries, at Tech Hub Hyderabad, India, we have some incredible openings to work with some great minds and talents to explore the art of possibilities and transform our capabilities leveraging technology.

This ends the first part of the blog; stay tuned for the next two parts, where I will focus on visualizing the smarter tomorrow based on digital evolution, how organizations can evolve in their digital transformation journey, how IT enterprises and IT functions in an organization can embrace the transformation.