Digital Transformation

Digital transformation is the use of digital technologies such as Social, Mobile, Analytics, and Cloud (SMAC) to change business to make them more efficient and effective. Digital transformation is not new. Between the 1950s to 1980s, computer technologies evolved from giant mainframes to smaller personal computers but most companies only viewed technology as supporting functions. Between the 1980s and 2000s, many companies considered “outsourcing” as one of several ways to reduce costs and increase profits including outsourcing information technology to lower cost countries. Between the 2000s to 2010s, companies began to realize that “automation” using technologies was a better way to improve the business and getting higher profits. Eventually, technologies had become a strategic factor in most decisions. Begin in 2015, the advance of computer technologies with faster processing power and Artificial Technology makes automation and robots “smarter” and Digital transformation has become the major strategy for all businesses.

Based on several studies, “Automation” where smart computers replaced human could give the companies significant gain in efficiency, higher profits and at a much faster time. Today almost every companies are looking at technologies as the key strategy for growth and expansion. Digital transformation is the main reason why more than 400 largest companies on the list of 500 top companies in the world have disappeared since the year 2000 and it is expected that some will be gone soon because they are too slow to make the change. At the same time, 50 smaller companies, some of them were startups, ten or twenty years ago now become the largest companies in the world because they know how to apply technologies as the key strategy.

Image: Internet

For example, thirty years ago, Amazon was a small online store selling mostly CDs and Books, now it is the largest company in the world with profit in billion dollars. Fifteen years ago, Apple came out with the iPods, and iTunes Music store and completely destroyed the entire music CD business. Of course, with further innovations, the iPhones also destroyed Nokia, the largest mobile phone manufacturing company in the world and make Apple the largest technology company in the world. You can see further evidence in what Uber has done in the taxi industry, Airbnb did to the hotel and travel industry, and Digital cameras destroyed the film-camera industry.

According to a new report, this year (2018), the industry is spending $2 Trillion dollars alone on digital transformation where almost everything that can be automated will be automated. Of course, many workers will suffer the consequences if they cannot learn new things fast enough. In the next few years, automation will drive, and continue to drive most businesses worldwide. If you are not learning about technology, especially focusing on Social, Mobile, Analytics, and Cloud (SMAC) , you may miss this great opportunity.


  • Blogs of Prof. John Vu, Carnegie Mellon University

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