Technological Revolution: A Glance of The Digitized Era
Author: Yash Pratul Patil
Integrated Approach Towards Digital Transformation
Kretschmer, T., & Khashabi, P. (2020) emphasize how digital transformation is significantly impacting how organizations operate internally through changes to their business processes and organizational structures. As firms adopt new digital technologies like AI, IoT, cloud computing, etc., it affects different steps of how they create output. – The literature develops an integrated view of how digital transformation impacts organization design by analyzing its effects on the process of output creation within firms. This includes the steps of task determination, division, grouping, monitoring, completion and recombination. At each step, digital transformation influences organizations in different ways. For example, it facilitates detecting new tasks and making some tasks obsolete. It also shapes new task groupings based on information dependencies. Digital tools improve employee-task matching and reduce costs of task assignment both internally and through outsourcing. Monitoring capabilities are enhanced but can potentially be excessive. Task recombination is facilitated through reduced experimentation costs and revealing new combinations within and outside firm boundaries. Overall, digitization is expected to improve efficiency but its impacts require considering data quality and human skills as biases can arise from algorithms. The document provides recommendations for organizations on how to design their digital transformation considering new interdependencies, prioritizing processes, choosing structure/strategy together, and focusing on long-term competitive advantages not just present efficiencies. It discusses potential issues like increased market concentration for leading firms that dominate digital assets, and implications this could have on competition and benefits of transformation.
Managing Digital Transformation
Cennamo et al (2020) discuss the scope and modalities of digital transformation for businesses. It introduces a framework with two axes – the scope of transformation (from internal processes to industry boundaries) and modalities of value co-generation (from delivering legacy products to platforms). Three approaches to transforming business models are described:
leveraging data-driven processes (focusing on optimization),
leveraging ecosystems (value complementarities across firms), and
leveraging platforms (competitive dynamics). The challenges of digital transformation include considering interdependencies, experimental capabilities, and coping with change. Case studies examine topics like leveraging data, sales transformation processes, organizational design, and employee mindsets regarding change. In summary, while challenges are familiar, new principles may be needed to manage issues like AI integration and connected systems.
Patterns of Digitization
Mugge et al (2020) explores the practices of digitally mature organizations in their digital transformation process. The literature identifies six key themes that distinguish the practices of digitally mature organizations from those of digitally developing organizations. These themes include aligning resources with strategy, investing in new technologies and businesses, focusing on key investments and investment focus, having a clear design philosophy, fostering digital leadership, and promoting timely and open communications. The author emphasizes the importance of understanding the softer factors of digital transformation, such as design philosophy, digital leadership, and communication practices, in addition to functional unit characteristics and enabling technology. In summary, a digitally mature organizations have the following characteristics:
They align their resources, both financial and human, with their strategy.
They invest in new technologies, new businesses, and even business models.
They support Agile principles, transparent and open communication about digital projects, and generate new ideas from communication with clients, suppliers, and business partners.
Digital Transformation Among SMEs
Ben Slimane et al (2022) present a systematic literature review on the topic of digital transformation in small and medium enterprises (SMEs). It aims to identify the main dimensions that guide digital innovation at the organizational level for SMEs. Through descriptive and thematic analysis of 273 articles, the paper identifies three key pillars of a digital transformation strategy for SMEs:
1) Rethinking digital infrastructures and processes and digital manager involvement,
2) Implementing new human resource practices, and
3) Adopting an outward-looking strategic orientation. The framework proposes that these three dimensions should be developed interdependently to successfully manage digital change.
Digitization In Content Manufacturing Markets
Shivendu, S., & Ran (Alan) Zhang. (2020) examine the impact of digitization on pricing strategies for content publishers who can offer content through both physical and digital media. Through the development of an analytical model to study how market characteristics like marginal costs, proportion of digital-savvy consumers, and other parameter affect optimal pricing schemes. The publisher have presented two optimal strategies – offering content only in the digital medium, or offering a bundle of both media and the digital medium. Their study shows that even when physical marginal costs are high, offering both bundle and digital is optimal under many conditions. It analyses how prices, demand, consumer surplus and social welfare are impacted by factors like consumer preferences, costs and media substitutability.
Positive Implementation of Digitization
Correani et al (2020) analyse three case studies of companies that successfully digitally transformed their businesses with help from Microsoft – ABB, CNH Industrial, and Vodafone. Through examining these cases, the authors developed a framework to help companies effectively implement digital transformation strategies. The framework consists of 12 building blocks related to resources, capabilities, activities and stakeholders. The building blocks include scope, data sources, data platform, AI, information/knowledge, people, partners, processes/procedures, activities/services, customers, and relationships between elements. The framework illustrates how the three companies used these building blocks to ensure consistency between their strategy formulation and implementation, leading to successful digital transformations. Key findings indicate the scope must be clearly defined, and data, partnerships and agile processes/procedures are important for implementation. The framework provides guidance for companies to renew their business models through digital transformation. In summary, the scope of the digital transformation was clearly
defined as follows:
- ABB: Create continuous value for customers through software- and platform-
enabled services.
- CNH Industrial: Develop new services around predictive maintenance and
intelligent logistics through the digitalization of its fleet.
- Vodafone: Automate and improve customer care.
Indian Digital Economy
Gupta, M. (2018) discusses the concept and evolution of digital economy and its contributions in India. He explains key concepts like digital technology, digital infrastructure, e-business, e-commerce etc. He discusses how countries are leveraging digital technologies for economic and social benefits. He outlines India’s progress in developing digital economy through initiatives like Digital India. Issues like barriers to digital economy due to technical illiteracy, security threats etc. are also discussed. The growth in digital payments in India post demonetization through UPI, debit cards, wallets etc. is highlighted. Opportunities for India in digital economy through internet of everything are also presented.
Developing Digitization in India
Chakraborty, D., & Biswas, W. (2019) explain the impact of digitization on Indian society through the Digital India initiative. They provide background on Digital India and its objectives like improving access to education, healthcare, banking services etc through digital technologies. They have also discussed how digitization can help improve literacy, provide remote education, enhance financial inclusion, enable telemedicine, and give farmers access to important information. Challenges around lack of infrastructure and digital literacy are also highlighted. Overall, the passage focuses on how Digital India can bridge the digital divide and promote more inclusive development across India.
Digital Dystopia
Tirole, J. (2021) explains digital dystopia as a concept that delves into the darker side of technological progress, particularly within the realm of digital technology. It revolves around the idea that while advancements in technology have brought about numerous benefits and conveniences, they also carry significant drawbacks that can lead to societal issues and inequalities.
- Societal Problems: Digital dystopia encompasses a range of societal problems that arise from the widespread adoption of digital technologies which includes issues like addiction to social media, cyberbullying, online harassment, and the spread of misinformation.
- Loss of Privacy: With the increasing digitization of our lives, individuals are often required to share personal information online, leading to concerns about privacy infringement. Digital dystopia highlights how the collection and misuse of personal data by corporations and governments can erode privacy rights.
- Job Displacement due to Automation: Automation driven by digital technologies has the potential to disrupt industries and displace workers, leading to unemployment and economic instability.
- Concentration of Power: A few tech giants wield immense power and influence in the digital landscape, controlling access to information, shaping public discourse, and monopolizing markets.
Tirole also encompasses elements like erosion of civil liberties, algorithm bias and data breaches that negatively impact the coming future of digital revolution.
Dystopia and Utopia in Digital Services
Hofacker, C. F., & Corsaro, D. (2020) discuss how each of the paired concepts (paradoxes) presented could lead to either a utopian or dystopian outcome when technology is involved:
Truth vs Lies – Technology enables widespread dissemination of information, but also misinformation. It could lead to more truth getting out (utopia) or more lies/fake news spreading (dystopia)
Long Term vs Short Term – Technology could encourage longer-term strategic thinking by firms (utopia), or focus only on short-term profits by discounting the future (dystopia)
Fair vs Unfair – Automation could improve fairness by enabling more efficient collaborative processes (utopia), but hidden inputs/externalities may lead to unfair value appropriation and negative externalities (dystopia)
Humans vs Machines – Technology enhances interactions but risks depersonalization, and humans still value relationships especially in important contexts like health (utopia if balance is found, dystopia if machines replace humans entirely)
Return vs Risk – Technology improves responsiveness and decision-making but also enables more data collection, raising privacy and security risks (utopia if risks are managed, dystopia if not) Coordination vs Competition – Technology enables collaboration but actors may still pursue individual benefits at the expense of cooperation (utopia if cooperation is fostered, dystopia if competition dominates)
Slow vs Fast – Technology accelerates everything which could improve reactivity (utopia), but may also generate anxiety if all interactions are perceived as urgent (dystopia). In each paradox, the authors discuss how technology applications could lead to either more positive utopian outcomes or negative dystopian outcomes, depending on how various issues around each one are managed.
Conclusion
This review of literature discusses several aspects related to digital transformation across various industries and organizations. It examines the impact of digitization on content publishers’ pricing strategies and how it affects different steps in organizations’ output creation processes. It also explores patterns of digitization adopted by mature organizations, key dimensions of digital transformation strategies for SMEs, and frameworks for successful implementation of digital strategies. It delves into how India, a rising economy is developing its digitization strategies in the global race. Furthermore, it discusses some potential dystopian outcomes of technological progress like societal issues, loss of privacy, job displacement and concentration of power if digital changes are not managed carefully.
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