Digital Transformation
Silo Example in an Operating model
Companies are working vertically and little to no exchange between departments. Ex) marketing --> sales--> finance. (no communication)
Barrier to Entry
a barrier to entry, or an economic barrier to entry, is a cost that must be incurred by a new entrant into a market that incumbents do not have or have no had to inicur
going broader and deeper with your digital vision TODAY
○ Products and services bought at the same time as yours ○ Systemic view of your customers' issues ○ Upstream and downstream dependences
buzzword
- a word of phrase, often an item of jargon, that is fashionable at a particular time or in a particular context - example) big data, AI, machine learning
digital divide
- an economic and social inequality with regard to access to , use of, or impact of information and communication technologies - example of countries where there is very little access to the internet and they are unable to communicate through means of technology.
disruptive innovation
- an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leading firms, products, and alliances - "an industry and its player find their position and viability questioned by a new competitor which manages through an innovation to conquer an important part of the market" - worry of threatening your current business - example of Wikipedia replacing encyclopedias. Uber's taking over the taxi industry
impact analysis
- analyzing the gap between the problem and the impact. - What will be the impact across the organization? - what leverages do you use to bridge the gap?
datafaction
a modern technological trend turning many aspects of our life into computerized data transforming this information into new forms of value. (don't believe this is on our midterm because we haven't talked about it)
Enterprise Resource Planning - ERP
the integrated management of core business process, often in real-time and mediated by software and technology (have not covered this in class, not on midterm)
disintermediation / Platformisation
- "Idea that we are getting rid of a lot of intermediaries" -Ex) ebay, amazon, etsy, price minster, - Authorized companies to sell through them
Silver Economy
- "Old people", 60+ - Land of opportunity / new markets (high spending ability) - example) wearable technology for them like 'life alert' and 'RFIDs in old folks homes'. - example) meals on wheels
product service systems
- "rent service/product instead of owning it" -Ex) adobe, velib, renting a car/leasing a car - ex) SAS, software as a service - Very flexible because you don't have to own, get most updated version, use when you want - Performance + flexibility - Those we external pressures
deflationary effect
- decrease of the price levels of goods or services. - when looking at competition, many competitors will market their prices lower thus changing all the competitors prices to also have a competitive advantage
Pure Play
- refers to a company that focuses on a particular product or activity instead of various interests. By extension, it's used to describe companies with only an online activity -only actively on the internet (1 activity) -Advantages: Less infrastructure cost, No physical point of sale, No stock (ex. Uber doesn't own cars), Flexible workforce, Lean management (not a lot of stock), Digital culture , Deep rooted in digital culture
BYOD, Bring Your Own Device
- refers to the policy of permitting employees to bring personally owned devices (laptops, tablets, and smart phones) to their workplace, and to use those devices to access privileged company information and applications - example of our analysis in class: --FOR) saves company money, productivity, ease of use, increase employee happiness, less maintenance cost on company. --AGAINST) security, confidentiality, compatibility, licenses, support of IT
Hackathon
a hackathon is a design sprint-like event in which computer programmers and others involved in software development, including graphic designers, interface designers, project managers, and others, often including subject matter experts, collaborate intensively on software projects. - ISU hackathon at school. (have not covered this, not on midterm)
process
collection of related, structured activities or tasks that produce a specific service or product
Going broader and deeper with your digital vision TOMORROW (Future)
i. How do you prepare to adapt to market changes? What will our missions be tomorrow? ii. How will our offering be used/bought? iii. Will they be useful at all anymore?
transversality
to support decompartmentalization in order to gather and mix jobs, skills, and resources needed around a shared goal for better results. - connecting different departments together(marketing, sales, production, IT, finance, ect)
network effect
- "the value comes from the number of people using the service" - Ex) 1 person using a phone/app. It's useless. If you don't have enough people buying then it won't work (circle)
Millenials
- Also known as Generation Y, are the demographic cohort following Generation X. There are no precise dates for when this cohort starts or ends; demographers and researchers typically use the early 1980s as the starting birth years and the mid 1990s to the early 2000s as ending birth years. - This is the biggest generation ever - " We drive the rest of the world with us". - Millenials are striving for; ease of use, immediate response, full transparency
internal pressure
- Ex) hiring millenials for inside work - Using slack for messaging - Transformation will come within from what employees use/want to see - BYOD (bring your own device)
Artificial Intelligence
- Intelligence exhibited by machines. Colloquially, the term, "artificial intelligence" is applied when a machine mimics "cognitive" functions that humans associate with other human minds, such as "learning" and "problem solving" - example) Google home, the movie "her" and an artificial partner through an app, chatbot,
The 5 Megatrends
- Mobile, Social Media, Big Data, the cloud, Internet of Things, - Other 2 trends on the rise: Artificial Intelligence (AI) and Blockchain
List of problems we are facing when transforming a company
- What tasks are we helping our customers with? - What are the fundamental needs we're tacling? - List of the easiest/most important to take care of ?
Minimum Viable Product (MVP)
- a Minimum viable product or MVP is a product with just enough features to satisfy early customers, and provide feedback for future product development ( not covered in class, probably not on midterm)
matrix organization
- a company structure in which the reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy - dual reporting relationships
Onmi-Channel Distribution
- a cross channel business model that companies use to improve their customer experience. Companies that use omnichannel contend that a customer values the ability to be in constant contact with a company through multiple avenues at the same time. - example) Disney -(not sure if we covered in class, probably not on midterm)
Sharing Economy
- a hybrid market model (in between owning and gift giving) of peer-to-peer exchange. Such transactions are often facilitated via community-based online services - "peer to peer" - There are tons of assets/time that can be used by other people - Ex) blah blah car -- optimize car/transport - Ex) airbnb -- staying in peoples apartment or homes. People on the home side of airbnb and optimizing their home..?
Megatrend
- a major trend or movement. - like the 5 megatrends: big data, social media, mobile, the cloud, and the internet of things. As well as the other 2 trends on the rise... Artificial Intelligence (AI) and Blockchain
open innovation
- a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to the market, as the firm looks to advance their technology - (not covered in class, not on the midterm)
Proof of Concept POC
- a realization of a certain method or idea in order to demonstrate its feasibility, or a demonstration in principle with the aim of verifying that some concept or theory has practical potential - (not on midterm)
Click & Collect
- a shopping facility whereby a customer can buy or order goods from a store's website and collect them from a local branch. -options for click and collection: in store pick up, drive through pick up, remote pick up, locker pick up, ship from store, reserve and collect - (don't know if this will be on the midterm because we haven't talked about it)
big data
- a term for data sets that are so large or complex that traditional data processing application software is inadequate to deal with them. Big data challenges include capturing data, data storage, data analysis, search, sharing, transfer, visualization, querying, updating and information privacy - combination of 2 phenonmenon's; social media and personal computers - used to help make more informed decisions - example) Facebook addressing Instagram's even though Instagram does not make any money with their services.
Key performance Indicator (KPI)
- a type of performance measurements. They evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it engages. - Ex) at Cargill they KPI's that I was looking in IT were financial benchmarks, number of innovative products, # of high priority projects, # of projects over budget, ect. - example of in class exercise with KPI's on digital maturity (access to internet, digitization of the government, gov. funding, degree of automation)
liberated company
- an organization from that allows employees complete freedom and responsibility to take actions as they decide are best.. -Theory X and Y - principles of the liberated company: short control loops, self organization, self control, self direction, subsidiarity, leadership, sense of actorship
digital maturity
- how digitally transformed a company is - example from class discussion on KPIs. What criteria would you use to measure digital maturity? --> access to internet/infrastructure, popularity of mobile phone payments, time spent on devices, digitization of government (adapting laws for digitization), degree of process automation, ect
Competitive Advantage:
- in Business, a competitive advantage is the attribute that allows an organization to outperform its competitors. A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled labor, geographic location, high entry barriers, and access to new technology - example) for millenials, everything needs to continue to transform and be fast to be at a competitive advantage for us. - example) amazon having a competitive advantage over online retailers like Walmart. Walmart is trying to develop their online presence more to compete with Amazon
Multi-Channel Distribution
- involves a business using more than one type of distribution channel - example of Starbucks using multiple channels like selling their product in their store, in grocery stores, and their own online site. Another example could be a manufacturer selling to multiple distribution centers or buyers (not sure if we have covered this, may not be on midterm)
New organizational models (3)
- liberated company (an organization from that allows employees complete freedom and responsibility to take actions as they decide are best.) - holocracy - matrix organization
holacracy
- method of decentralized management and organizational governance - atonomy - example of spotify with implementing a new system in the product development department (squads, tribes, chapter, guild) - teal companys
Human Resources role in transformation
- need for correct/effective onboarding new employees. How we manage and operate people is key - training employees for the evolution of digital transformation and how it is a constant change. Evolutionary process - soft skills -- what separates us from robots. Communication, public speaking, managing, leadership, motivation
process redesign
- operational process - support process - monitoring process - evaluation process ** all about spotting the added value from the worker and simplifying the task. We want to focus there efforts in where they are experts. We want to redesign because of different/non effective process
Market Penetration
- refers to the successful selling of a product or service in a specific market, and it is measured by the amount of sales volume of an existing good or service compared to the total target market for that product or service. Market penetration is the key performance metric for a business growth strategy. - also refers to the % of the market you are able to capture
agility
- the ability of a company to constantly adapt to an environment characterized by complexity, uncertainty, and turmoil. - need to have this or the company will either live or die - Unified vision, communication & Transparency, collaboration culture, flexibility culture
Urbanization
- the birth of the "smart city" - creating new trends of consuming goods. - example) company creating sidewalks that generate electricity when you step on it. - example) rent a bike system
digital transformation
- the change associated with the application of digital technology in all aspects of human society - 3 key ideas: technologies, change, radicality (touching everywhere) -
Showrooming
- the practice of examining merchandise in traditional brick and mortar retail store or other offline setting, and then buying it online, sometimes at a lower price - (not on midterm)
Hyper-competition
- very strong competition among company's where there is rapid change within the industry to be ahead of the competition. - the market is changing very quickly and it's not possible for one company to keep a competitive advantage for a long time
human resources and adapting to new ways of working
-change in environment, change in process, how do you make your company more flexible, - pressures that come from inside for changes - example of working from home and how that impacts employees and managers
on-demand economy
-defined as the economic activity created by technology companies that fulfill consumer demand via the immediate provisioning of goods and services - "what you want, you want right now" - the problem is that it this is impacting all companies and is having a trickle down effect. Everyone expects everything fast from everyone - example) uber, blue apron.
predictive maintenance
-designed to help determine the condition of in-service equipment in order to predict when maintenance should be performed. This approach promises cost savings over routine or time-based preventative maintenance, because tasks are performance only when warranted.
Factors to look at during the evolution of the company market in your Digital Vision
-transportation (Industrial hardware, Train station digitization, Maintenance optimization) - corporate (In need of software solutions, Less investments. ex) Renting equipment... in the agriculture business they are renting machines and for Cargill, they are renting out silos for grains - - industry (Environmental constraints , Beginning of DT)
Cloud Computing
a computing-infrastructure and software model for enabling ubiquitous access to shared pools of configurable resources (such as computer networks, servers, storage, applications and services), which can be rapidly provisioned with minimal management effort, often over the internet. Cloud computing allows users and enterprises with various computing capabilities to store and process data either in a privately-owned cloud, or on a third-party server located in a data center - thus making data-accessing mechanisms more efficient and reliable. Cloud computing relies on sharing of resources to achieve coherence and economy of scale, similar to a utility. - Storage power of IT servers on a virtual network - remote service for storage - Example) the music industry and the evolution of the CDs --> MP3s--> now Spotify and their use of the cloud; also the use of Amazon Web Services (AWS)
Marketplace
a type of e-commerce site where product or service information is provided by multiple third parties, whereas transactions are processed by the marketplace operator. (not covered in class, not on midterm)
Digital Vision
a. Changing your innovation method b. Affects everyone; overarching reach c. Integrating tools, new processes d. Idea with working on the vision: i. The future image you want to reach for your company 1) A set of objectives you identify 2) A strategy is the practical/implementation of the vision e. Example of Burberry and their advances of digital transformation f. Goal of the Digital Vision is TRANSFORMATIVE i. You need to look at what will truly change your company, not incremental changes like "building a website" g. Example of Starbucks and how they are utilizing digital transformation The vision has to come from the top management
Home automation/domotics
building automation for a home, called smart home or smart house. (not covered in class, not on midterm) -example) using a raspberry pi to automate a tv to be connected with all messages, emails, mirror, calendars, ect
procedure
defines how to implement one or several activities of a business process. It identifies the sequence of steps, and specifies for each step what needs to be done, when, and by whom
Pain Points
i. Are the needs of the customer satisfied? ii. Needs that are poorly satisfied? iii. Frictions? Linked needs or issues not solved or satisfied?
How do these technologies support the mission when looking at the digital vision?
i. Perform tasks for a cheaper cost ii. Performance iii. Quality iv. Personalization v. Practicality vi. Reactivity vii. Security Fluidity
Brick & Mortor
refers to a physical presence of an organization or business in a building or other structure. The term brick-and-mortar business is often used to refer to a company that possesses or leases retail stores, factory production facilities, or warehouses for its operations
data scientist
the data scientist role is an offshoot of the statistician role that includes the use of advanced analytics technologies, including machine learning and predictive modeling, to provide insights beyond statistical analysis (don't believe this is on the midterm because we haven't talked about it)
Internet of Things, IoT
the inter-networking of physical devices, vehicles (also referred to as "connected devices" and "smart devices"), buildings, and other items embedded with electronics, software, sensors, actuators, and network connectivity which enables these objects to collect and exchange data. Ex) Apple Watch, smart shopping carts, ihome/alexa, smart thermometors, train screens with new technologies, ect - Devices that connects gadget iwth the internet and new uses. - b2b, b2c
Change management
the planning and introducing of new processes, methods of working, ect. in a company or organization: With effective change management, changes are handled quickly and have the lowest possible impact on service quality
