DIGITALISATION

It is extremely important for al enterprises to know what shall be its competitive edge in the digital era. Digitalisation, a part of Industry 4.0, is swiftly changing how businesses work. This shift is causing challenges for many companies. To stay competitive, businesses need to check if they are ready for this digital world. Most companies see the importance of going digital, but some don’t know how to start.

It’s not just about using fancy technology like AI or big data. There are several parts to digital transformation for a business to become really good at it and get ahead. Here are a few:

• Switching to a customer-first way of doing things is a big part of this shift.
• Businesses need to update what they offer — products and services — using new digital models that focus on innovation.

Having a clear plan (strategy) for digital transformation is crucial. This guides companies to be leaders in creativity

Industry 4.0 refers to the current trend of automation and data exchange in manufacturing technologies. It encompasses cyber-physical systems, the Internet of Things (IoT), cloud computing, and cognitive computing, revolutionising industries through smart, connected, and autonomous systems in production and logistics.

Digitalisation focuses on using digital info and analysing data to make tasks smoother by automating existing processes. It’s about improving specific tasks.

Digital transformation is a bigger deal. It involves different companies and systems, pulling together all kinds of digital solutions. Verhoef et al. describe it as “a change in how a firm employs digital technologies, to develop a new digital business model that helps to create and appropriate more value for the firm”.

Transforming how a company thinks about digital methods is just as important as using the technology itself. It’s not just about the tools; it’s about how everyone in the company, and even the customers, adapt to this new digital world. Both organisational culture and customer culture are to be focussed upon.

Everyone in the company, especially top management, needs to support and drive this change. Even, customers need to feel comfortable with digital services, so their views matter too.

The digital era signifies the widespread integration of digital tools in daily life, work and society, transforming communication, work methods, information access, and business interactions. It’s marked by rapid technological progress, including AI, automation, big data, IoT, and cloud computing, shaping diverse industries and everyday experiences.

Industry observers say that there are shifts required not only in the soft skills but also in the hard skills of people who will be working in this digital era and the organisations operating in this era.

The digital economy denotes an economy reliant on digital technologies, where economic operations heavily depend on digital platforms, data, and connectivity. Businesses use technology to generate value, offer goods/services, and engage with customers, suppliers, and partners. It covers online commerce, e-commerce, digital marketing, app-based services, digital content creation, and other technology-driven economic activities.

Regarding the shift required in skills to succeed in the digital era and digital economy, it’s indeed significant. The landscape of work, industries, and business operations has transformed due to technological advancements. This transformation necessitates a shift in both hard and soft skills:

• Hard skills: Technical competencies related to specific technologies are crucial. This includes skills in data analysis, coding, programming languages, cybersecurity, digital marketing, AI, machine learning, and more. These hard skills are essential for individuals to navigate and contribute effectively in a tech-driven environment.
• Soft skills: Alongside hard skills, soft skills are equally important. Skills like adaptability, critical thinking, creativity, collaboration, communication, and problem-solving are crucial in the digital era. These skills enable individuals to navigate complex situations, work in diverse teams, and effectively use technology to innovate and solve problems.

Digital era encompasses the broader societal shift towards digital technology adoption, and this require individuals and organisations to adapt, evolve, and acquire a blend of technical and interpersonal skills.

In summary, the digital era encompasses the broader societal shift towards digital technology adoption, and this require individuals and organisations to adapt, evolve, and acquire a blend of technical and interpersonal skills to thrive in this tech-driven landscape.

Sustainable Competitive Advantage In Digital Era

In the digital world, a competitive advantage often stems from a combination of factors. Here are some key aspects:

• Innovative technology: Having access to, or the ability to develop, cutting-edge technology is a major advantage. This includes software that’s efficient, user-friendly, and adaptable to changing needs.
• Data utilisation: Leveraging data analytics and insights can give an edge. Understanding and effectively using data can inform decisions, enhance products/services, and improve customer experiences.
• Agility and adaptability: The ability to quickly adapt to changing market conditions, customer preferences, and technological advancements is crucial. This involves not just adopting new tech but also being agile in operations and decision-making.

Talent and skills: A workforce equipped with the right blend of hard and soft skills

is invaluable. Technical skills like coding, AI, cybersecurity, coupled with adaptability, creativity, and problem-solving abilities, are essential in this era.

• Customer-centric approach: Focusing on providing an excellent user experience and meeting customer needs efficiently can set a company apart. This often involves personalisation, convenience, and a seamless customer journey.
• Collaboration and partnerships: Forming strategic alliances, collaborations, or partnerships with complementary businesses can strengthen offerings and market presence.

Ultimately, the ability to continuously innovate, adapt, and deliver value to customers through technology and skilled personnel is what can create a sustainable competitive advantage in the digital era.

Shift From Closed Organisation And Open Software

Industry experts say that businesses have to move from closed organisation systems and open software to open organisations and closed software. What exactly do they imply?

Shift from closed organisation systems & open software: This refers to migrating from a typical setup where organisations have internal systems and processes that are closed or isolated from one another, creating silos. Departments or divisions often work independently, leading to limited data sharing, collaboration, and transparency. Meanwhile, the software used within these organisations might include open-source or easily accessible applications, allowing flexibility and interoperability between systems.

Move to open organisations: This implies a shift towards creating more open, transparent, and collaborative organisational structures that encourage communication, shared goals, and cross-functional collaboration. They break down silos, fostering a culture of information sharing and cooperation among departments or teams.

Towards closed software systems leading to data democracy: Data democratisation refers to making digital information easily accessible to regular users. The idea is to empower non- experts to collect and analyse data without needing external assistance.

Open Technologies:

Open technologies refer to systems, software, or platforms that are designed with an open philosophy. These technologies typically have their source code openly available, allowing anyone to view, modify, and distribute it. Open technologies often foster collaboration, innovation, and community- driven development. Examples include Linux operating systems, open-source programming languages such as Python, and projects like Apache web server or WordPress.

Closed (or Proprietary) Structures:

Closed or proprietary structures refer to systems, software, or platforms where access to the source code is restricted or proprietary. This means the code is not freely available for viewing, modifying, or redistribution. Companies usually maintain tight control over these technologies, and users must abide by licensing agreements and restrictions. Examples include many commercial software products like Microsoft Windows or Adobe Photoshop.

Yet, achieving this shift requires a significant cultural change in companies where data ownership is spread across different departments. Often IT managers limit data access due to concerns that non-tech staff might misinterpret it. Consequently, strict data access policies are set, often restricting access to higher-ups, data scientists, and IT staff.

Even in organisations keen on democratisation, challenges persist. Data stored in separate silos makes it hard for various departments to access and interpret it consistently. Additionally, even small datasets can have errors needing clean- up, and data formats might require conversions before they’re usable.

Fortunately, technological progress is simplifying data democratisation. Advances like data virtualisation software allow applications to handle data without intricate technical details. Data federation software merges data from diverse sources into a virtual database, enabling business analysis without housing the data itself. Cloud storage, particularly, helps break down

data barriers by centralising storage. Security features in database management systems help safeguard data, and self-service BI tools offer visualisation, making analysis easier for non-tech users. For instance, tools combining surveys with data visualisation empower marketing teams to gather, analyse, and share consumer insights in real-time.

Experts, therefore, advise that utilising closed software means adopting more controlled, proprietary, or specialised software solutions. These closed software systems could potentially offer stronger data governance, security, and control over sensitive information, while there is an emphasis on ensuring that data is accessible, understandable, and usable by relevant stakeholders across the organisation. This doesn’t mean restricting access but rather having centralised control and governance over data access and usage.

Shift Towards Openness

Experts in the industry highlight the advantages of an open organization, emphasising its reliance on crowd-sourcing vital operational aspects such as R&D, labour, accounting and compliance among others. They note that open organisations even encourage customers to actively contribute to product development and even production, heralding a new era with mutual benefits.

In these set-ups, development teams maintain proximity to customers, resulting in quicker product development. Furthermore, experts emphasise that technology isn’t merely a facilitator but the central driving force behind these open organisations.

They describe this as a paradigm shift in organisational dynamics toward openness, collaboration, and customer-centricity. Here’s a breakdown of the key points:

Experts emphasise that technology isn’t merely  a facilitator but the central driving force behind open organisations.

Crowdsourcing Various Operations: Open organisations expand beyond internal teams for R&D, tapping into diverse contributors for ideas and innovations, including employees, customers, and external experts.

This approach extends to sourcing labour, creative work, and tasks from a wider talent pool, utilising freelance or crowdsourced platforms. Even critical functions like accounting and compliance benefit from diverse sources, incorporating expertise both within and outside the organisation to ensure accuracy and regulatory adherence.

Customer Participation in Product Development & Production: In open organisations, customers actively contribute to product/service creation, influencing design with insights and feedback. This co-creation approach involves customers in shaping offerings, emphasising their participation in development. Close ties between development teams and customers prioritise understanding needs, feedback, and preferences, fostering rapid iterations and agile product/ service development.

Technology as the core: Experts emphasise the centrality of technology in enabling and supporting open organisations. This could refer to leveraging digital platforms, tools, and systems to facilitate collaboration, communication, and data sharing among diverse contributors.

Conclusion

The arrival of the digital era makes it imperative for businesses to take advantage of digital platforms, data, and connectivity to create value for customers and other stakeholders. This in turn necessitates the shift toward open organizations and closed software as these twin- towers aim to balance the need for collaboration and transparency within the organization (openness) with the requirement for data security, governance, and control (closed systems).

Overall, industry experts advocate for a shift towards openness in various facets of operations, leveraging technology to facilitate collaboration, customer involvement, and faster product development cycles. The vision is to create an ecosystem where diverse stakeholders contribute, collaborate, and benefit, leading to faster innovation, better products, and enhanced customer satisfaction.