Democratizing the Digital Transformation
Democratizing the Digital Transformation
The democratization of technology brings its benefits to more and more people globally who previously did not have access to services like mobile banking and others.
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We know for a fact that there are more mobile phones than the world population right now (November 2017). Check the below graph if you aren't aware of it.
This does not mean that every person has a mobile phone, but almost every person who can handle a mobile phone will get it by 2020. Check the below graph from Cisco, where they predict that by 2020, there will be more people with mobile phones than people with electricity.
I will stop right here without going deep into mobile phones, but the above two graphs clearly show us that mobile phones have been democratized so quickly, they have even overtaken an essential need like electricity. Most of these mobile devices are in the category of “smartphones,” where they have connectivity to the internet. Ten years back, a farmer living in a rural village in Dambulla, Sri Lanka may not have even dreamt of having such a device in their hand, but it happened in a way no one could predict. Mobile phones have been democratized across the globe. A company located in the USA, Japan, or Korea has acquired a market far away in the east.
Every business organization wants to expand their horizons to all parts of the globe. Apple CEO Tim Cook may be thrilled to see that the iPhone is helping to change people's lives in a distant country like Lesotho. It is more or less the same ambition for Elon Musk, Jeff Bezos, or Satya Nadella. They want to see their products and services expand into distant limits so that they can change human behavior for good (and make it profitable).
First off, democratizing the digital transformation is already here. It happened within the last ten years. Here are the companies which lead this phase:
Uber made everyone a global passenger of the world’s largest taxi service, which does not own a single taxi. It democratized the transportation industry (especially taxi services). There are so many localized companies coming up every day to copy the concept and help the process.
Airbnb allowed travelers across the globe to fulfill their dreams without spending a lot of money on accommodations. It became the largest hospitality service company without owning any real estate or hotels. It has democratized the travel and hospitality industry.
Likewise, Amazon and Alibaba democratized the way people do shopping and the process of buying and selling products online. Facebook became the largest media owner in the world without having any media or media personnel.
It is time for another revolution in human existence using technology- specifically, using digital transformation. If you are in the technology industry, you may have heard of the term “digital transformation” along with words like microservices architecture (MSA), DevOps, containers, service mesh, artificial intelligence, and analytics. This technical jargon shapes the next wave of the technology revolution.
Digital transformation is a term heavily used in analysts' reports recently. Based on a recent survey done by Gartner (April 2017), 42% of CEOs of different organizations have already started working on DT. This survey did not include tech giants like Amazon, Facebook, Google, and Microsoft. It is all about companies which do not have a direct connection to technology products. The main intention of this post is to talk about the social impact of digital transformation rather than the enterprise side of it.
Let’s talk about the political side of the story. Socialism is the best, but hardest to implement and persist. Democracy is good, and not much harder to implement. Super democracy (as we know it) is not that good. Let’s focus on the topic of democratizing the digital transformation rather than the day-to-day politics.
Democracy, in layman’s terms, is to offer everyone equal opportunities to prosper. Digital transformation is a bit harder to describe in layman’s terms, but it can be defined as “transforming your assets (products, services, customers, employees, etc) into a digitally accessible form.” As an example, ff you are a shoe company, customers would be happy to go through the catalog of shoes using a digital device like a phone, tablet, or PC before coming into the brick-and-mortar store to make the purchase.
That is digital transformation as we know it, but democratizing DT requires some additional technological advancements and agreements between different competing organizations. Let’s take one industry and try to simplify the idea. Since I began the story with mobile phones, let’s take the telecommunication industry. In most of the countries where mobile network operators (MNOs) operate, there multiple competing vendors. The looks of the subscribers (users) and the population can be depicted as in following Venn diagram:
As depicted in the above figure, there are already people who are using multiple service providers (MNOs). But that is transparent from the operator. One of the main business trends in the telecom industry is the value-added services (VAS), but these services are limited only to the customer base which is owned by that particular MNO.
These telecom operators (MNOs) have tried to democratize the industry on their own, but they failed. GSMA is the global body which is responsible for the governance of MNOs across the globe. They came up with the idea of a standard set of APIs which can be used by different MNOs to expose and exchange information about their customers and provide value-added services across different operators.
As depicted in the above figure, once all the MNOs expose their customer information with the customers' consent, individual operators can extend their value-added services to the customers who are using other mobile operators in an area where the first operator's coverage is not present. In addition to that, independent service providers (third parties) can build applications on top of these APIs and extend their services to new customer bases. The impact this kind of architecture can have on normal person’s life can be immense. A farmer living in a developing country can use services like mobile banking or AliExpress to buy and sell items through his mobile phone (which may or may not be a smartphone). This is not a story anymore. This has already been realized in some parts of the world. It is only a matter of time until it comes to your doorstep.
The above use case showcases how to democratize the digital transformation within the telecommunication industry. The same concept can be applied in many other industries. Another frontrunner in this space is the financial industry.
The European Union has recently released a regulation to all the banks operating in EU countries to expose their customer and payment information securely with customers' consent through a standard set of APIs. This is known as Payment Services Directive 2 (PSD2). This is a scenario where the democratizing of DT comes as a regulation. Financial institutes like banks were a bit hesitant at the beginning to adhere to this regulation, but after they understood the potential, they quickly moved towards PSD2 compliance. This will allow the financial industry in the EU to reach new heights in their operations, and customers will get more benefits.
With these two practical examples of democratization of DT, the same concept can be extended to other industries, such as healthcare, manufacturing, retail, governmrnt, and more. This will allow people from different levels of society and different geographical locations to reap the benefits of technology, and specifically digital transformation.
A more generalized form of the above architecture is shown below:
Published at DZone with permission of Chanaka Fernando , DZone MVB. See the original article here.
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