Digitalization, the use of digital tools, often is hard to clearly distinguish from digital transformation, the creation of new business models.
Think of digitalization as the application of technology to the way work gets done. Then digital transformation generally refers to new possible ways of earning money, in the final analysis.
Are e-commerce businesses or business units an example of digitalization or transformation? Most observers might consider Netflix and Amazon examples of transformation. It might be more subtle.
Netflix used technology to change its business from subscriptions to a “movie rental” service to an “on-demand video streaming” service. Still, even at the beginning, digitized ordering was used, if fulfillment was physical.
Keep in mind that on-demand services also were available as part of linear video subscription services that also became “digitalized” prior to the advent of high-definition TV. Though not as elegant or easy to use as Netflix streaming, on-demand delivery was not unique to Netflix.
Perhaps the big innovation is all-on-demand access, where legacy linear video still is mainly scheduled programming. In that sense, the big Netflix transformation was the shift to 100-percent “on-demand access,” not streaming as such, or internet delivery as such. It is a debatable point.
Amazon likewise shifted retailing from a place-based activity to online ordering and physical fulfillment. Digitalized ordering was an innovation, to be sure. But “mail order” and catalog shopping had been well established, before Amazon.
Amazon digitalized the ordering interface and fulfillment (delivery rather than in-store pickup). Amazon virtualized retailing. Still, in a sense, that is similar to Netflix and its shift to “on-demand” ordering.
Still, models have changed. Netflix now is a major force in content creation, rivaling the legacy studios. Netflix does not “merely” distribute content; it creates original content.
Likewise, Amazon was a key leader of the “cloud computing as a service” shift. AWS now drives Amazon’s overall profits. So Amazon is not just an e-tailer. It is a huge computing services provider.
We can debate whether streaming or e-tailing are transformations or digitalizations.
What seems incontestable is that Netflix emerging as a content creator and owner, and Amazon emerging as a computing services giant, are transformations.
Work processes in most organizations are “digital” to some extent, and quite extensive in most enterprises.
Customer interactions with firms now are largely “digital,” a new survey sponsored by MuleSoft and conducted by Vanson Bourne and Deloitte Digital finds.
That does not mean the firms have transformed their revenue models and created new products
No comments:
Post a Comment