BCG & Univ. of Virginia on digital transformation
Link: https://www.coursera.org/learn/bcg-uva-darden-digital-transformation
- Moore’s law: Processing power doubles every 18 months
- Butter’s law: Communication speed doubles every 9 months
- Kryder’s law: Storage capacity doubles every 13 months (16/17 months)
- Information technology massively lowers transaction costs which has enormous implications for strategy because economic organization is fundamentally around economizing on transaction costs.
- Isn't technology itself what creates the complexity it is trying to counterbalance?
- Company culture: it's the collective capability of the organization to create value
Five domains to look at in digital transformation:
- Data - e.g., advance product development
- Innovation - e.g., quick testing resulting in faster innovation
- Competition - e.g., lower market entry barriers, blurring boudnaries between different industries, scaling becomes easier
- Value - e.g., new ways to deliver value leveraging digital technology
- Customer - e.g., ubiquity of information allows to be highly infomred and changing behaviour and loyalty
Four underlying drivers of the digital economy
- Network externalities - scale of usage improves value of the product/service to customers
- Winner take all markets - network externalities tend to create one dominant player, e.g., Facebook, Google
- Platform technologies - allows different companies to plug in, e.g., Internet, cloud computing, but also car making
- Complementary capabilities - leveraging platforms with specific capabilities, e.g., manufacturing capabilities
"Take a moment to think about some complementary capabilities your company might explore to be more dynamic and responsive to technological change and changing market conditions."