Saturday, July 4, 2015

Prepare to win in the digitization 2.0 world.


Digitization 2.0: mobility ecosystems. Going beyond individual telematics systems, automakers have opened up their operating system (e.g., FordOpenXC) to third-party developers to write apps. Now automobiles and mobile phones are able to interconnect without conflicts. At the same time, Google and Apple have announced their intent to be drivers of digital transformation in the automotive sector. Android Auto and Apple CarPlay are in the initial stages of pulling together the different automakers into their ecosystems with many apps for navigation, communication, and entertainment.

Architect your products for context-awareness. Your company’s product architecture may be analog today but ask yourself: What happens when products become digital and your company can observe, analyze, and correct your products while in use? Similarly, how can you facilitate product adaptation across companies that are collaborating to deliver on a customer value proposition?

Map your digital ecosystem beyond your core industry’s boundaries.Companies are now part of digital ecosystems with connections based on data and interoperability (APIs). Competing and collaborating simultaneously with the same companies will be the norm as rules evolve with different monetization models and cross-subsidization (e.g., value for data). Senior leadership should not only map their own company’s ecosystem. They should also track others, which may help them identify potential entrants that could pose a threat or opportunity.

Develop capability for context-aware insights. Digitization, sensors, and connectivity lead to the generation of large volumes of data. Understanding products and services in use require significant capabilities to capture, store, and analyze data at unprecedented scale. New technologies like Hadoop for storage, tools like R and SAS for analysis, and visualization techniques are starting points for managing in the digital age.

Digitization is the single biggest trend affecting every company. It challenges every company to think about the drivers of value creation and capture as well as modes of differentiation beyond familiar dimensions of cost and quality. Our message is simple: Think first about how your products and services become smart as you observe them in use. Then, understand the context-aware continuous refinements that could significantly enhance the value of your products and services as part of dynamic digital ecosystems. Make sure that your business is designed to move from digitization 1.0 to 2.0.

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