Wednesday, June 04, 2014

A Brief History of Digital Transformation



The phrase Digital Transformation is used a lot these days, but what’s different. Surely companies have been using digital technology (based on the manipulation of 1s and 0s) since at least 1951 when Lyons Tea Rooms were the first to develop and install a computer for commercial use - Lyons Electronic Office or LEO (see the video above).The differences are twofold: first technology has become more readily available and secondly the type of systems that are produced has changed.

Let look at the availability of technology. Over the years, the cost of computing has declined meaning that many consumers and employees these days have more than one computing device that they use on a daily basis. As such they are expecting that companies provide them with the means to do business over these devices or that their employers allow them to bring their own technology to do their work. Not only are the days of the green screen long gone, but also those of clunky and siloed client-service enterprise systems. Companies need to adapt to this or their consumers and employees will simply go elsewhere. As such, typical enterprise IT departments are being challenged to use new technologies to attract and retain not only customers, but business and technical staff who are used to the efficiencies that these technologies bring. Companies can profit from this increased efficiency if only they can harness it.

The effect of cheap technology not only has an influence on end users. It also deeply effects how large scale computing is dealt with. Cloud providers can give attractive rates because they use cheap commodity hardware coupled with extremely efficient management of that hardware. And the pervasiveness of this computing power means that software development – previously the preserve of a select few – can be opened up to large communities rather than keeping it inside of the walls of a company’s IT group. In addition, due to this pervasiveness of technology, business departments are becoming more savvy in how IT can be used to solve – quickly - the problems that they have, rather than waiting for the IT group to get around to producing something.

Indeed, the cost of computing has become so cheap that it can be embedded in practically anything giving rise to the Internet of Things whose potential still has to be reaped.

In addition to cheap computing (or perhaps because of it) the types of systems being produced have changed. In the 90s most IT systems had a simple architecture and a simple purpose: store and retrieve data. Today, this has been extended to “systems of engagement”, i.e. systems in which communication and collaboration (rather than record keeping) take centre stage.

Like the explosion of ideas that happened when Lyons installed LEO back on the 50s, this availability of computing power is giving birth to new ways of doing business leading to the trend being called “Digital Transformation”