Digital Mastery

Digital Mastery is having the knowledge to transform a company successfully through digital and leadership capabilities. Digital mastery is achieved by companies that use digital technologies to drive significantly higher levels of profit, productivity, and performance. The firms that excel at both digital and leadership capabilities are Digital Masters. Digital Masters are substantially more profitable than their peers. Digital Masters do more than just invest in digital capabilities. They create the leadership capabilities to get the most value from their digital activities. Digital Masters see technology as a way to change the way they do business and as tools to create a compelling customer experience, exploite the power of core operational processes, and reinvent business models.
Digital Masters excel in two critical dimensions: the what of technology (which we call digital capabilities) and the how of leading change (which we call leadership capabilities). Digital transformation is the use of digital technology to radically improve the performance and/or reach of a company, and to drive the business forward. Digital transformation is the change associated with the application of digital technology in all aspects of human society. Reshaping the operating model and customer value proposition are the two elements of digital transformation.
How you use the mentioned investments to transform your company is a key to success. Building the company’s digital capabilities is the first part to digital mastery through digital transformation. Leadership capabilities are essential to achieving true digital transformation; they turn digital investment into digital advantage.

Brief History
The underlying technology was invented in the latter half of the 19'th century, including Babbage's analytical engine and the telegraph. Digital communication became economical for widespread adoption after the invention of the personal computer. Claude Shannon, a Bell Labs mathematician, is credited for having laid out the foundations of digital in his pioneering 1948 article, A Mathematical Theory of Communication. The digital revolution converted technology that had been analog into a digital format. By doing this, it became possible to make copies that were identical to the original. In digital communications, for example, repeating hardware was able to amplify the digital signal and pass it on with no loss of information in the signal. Of equal importance to the revolution was the ability to easily move the digital information between media, and to access or distribute it remotely.
The turning point of the revolution was the change from analogue to digitally recorded music. During the 1980s the digital format of optical compact discs gradually replaced analog formats, such as vinyl records and cassette tapes, as the popular medium of choice.
Digital Maturity
Digital Maturity can be measured in four different stages: beginners, fashionistas, conservatives & digital master:
* Beginners
Digital Beginners are at the beginning of their journey. Most of the Digital Beginners will follow the "wait and see" strategy, trying to gain some certainty before they action anything. Digital beginners believe that digital opportunity is rather for other companies than for their own. Some other Digital beginners have a shortage of leadership in this area. The result to all this is that beginners always only have the most basic digital capabilities. The beginners always lag behind their competitors in all aspects of digital business.
* Fashionistas
In Digital Mastery, fashionistas are companies that don’t wait to act. These type of companies buy every new digital accessory. They display their digital capabilities, but don’t change on the inside or the proverbial engine room of the company. These type of companies lack strong leadership and governance in the digital world. They also come to a stage where they have to track back on what they have done to justify why they implement certain digital systems. In effect there is nothing wrong with experimenting to find the best solution for the problem but the fashionistas seldom coordinate their activities or build combined efforts with their investments. This inconsistency from leadership delays a structured approach to the customer engagement and creates dysfunctional operations systems in company.
* Conservatives
The conservatives will be just the opposite of the fashionistas. The conservatives most likely will have good or effective digital Leadership. Even though they have good leadership, conciseness prevents their firms building good and strong digital abilities. These type of companies make sure that every digital investment is thought through very carefully and very well considered and coordinated. The leaders in companies like this don’t want to make errors that will waste their time and money. This cause can be of great value, especially to save time, money and effort, but it can create a governance trap and shift the focus from the objective.
* Digital masters
Companies that are digital masters have overcome the obstacles and difficulties that challenged their competitors. They have the capabilities and leadership to know where to invest and how to invest. Their leaders are committed and willing to guide the company into the future of digital transformation. They are developing their companies to take advantage of their digital advantage. The reason for this is to build a greater competitive advantage in their industry.
Steps to become a Digital Master
Westerman et al. (2014)
According to research conducted by McKinsey Global Institute (MGI) on the state of digitization across all sectors within the US economy, a large and growing gap was identified. The research benchmarked companies using 27 indicators, all falling into three broad categories: digital assets, digital usage and digital workers; with digital usage and digital workers making a crucial difference.
Technology can disrupt business through delivering the same value to the customer but at a new level of efficiency (Operating Model), delivering the new product to either a new customer and/or a new market (Value Proposition) or by inventing entirely new industries (Business Model).
Some examples of disruptive innovation include Network of Global Future Councils predict that global digitization, which includes organizations' endeavors to becoming Digital Masters, will bring about technology-enabled shifts providing holistic digital connectivity (everyone connected to everything, everywhere and at any time) and tools for enhanced data analysis and application. They have defined six mega-trend categories:
* People and the internet
Technology is transforming the manner in which people connect with others, gain access to information and interact with their surroundings through wearable and implantable devices which enhances people’s digital presence e.g. human implanted mobile phones enabling both the making and receiving of calls, and possibly messaging and other facilities, are predicted to be commercially available by 2025.
* Computing, communications and storage everywhere
The exponential growth in potential to access and utilize the internet is driven by an ongoing rapid decline in both the size and cost of technologies related to computing and connectivity. This is leading to the availability of universal computing power with almost unlimited storage capacity built into pocket size devices e.g. Cloud storage is digital data storage which is pooled amongst various physical servers, usually based in different locations, and owner managed by formal hosting companies. This enables users whom need access to large amounts of storage space, though on a more temporary basis, said access at a significantly lower cost versus having to acquire such capacity in house.
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Measuring or process sensors introduced for an increased range of applications such as personal residences, clothing, cities, transportation, manufacturing processes, and others. This vastly expanding application is possible through the sensors becoming all the time smaller, more cost effective and more intelligent. Corresponding software is then required to transform the collected data into meaningful information for analysis purposes e.g. application in facilities management to create intelligent buildings through the likes of active building energy management systems (BEMS), requiring data collection sensors in many applications such as water, electricity, and heating/cooling, all of which can increase efficacy in the commercial building management arena. Suitable software analytics solutions are growing substantially, with an estimated 18% compound annual growth rate between 2015 and 2024.
* and Big data
Decision-making is broadly being supplemented by big data through the collection and analysis of massive amounts of data - one of the effects of exponential digitization is exponentially more data being generated amongst a multitude of universal applications. AI and robotics is also impacting jobs and decision-making on various levels - software solving sophistication and self-learning capabilities, as well as self-evolutionary capabilities, are rapidly progressing e.g. artificial intelligence essentially entails machines showing some level of intelligence, evaluating its applicable environment and taking action in such a manner as to maximize its probability at success in task execution. Company’s apply artificial intelligence in various manners, including as part of their board of directors to ensure they get neutral and situationally optimized input based on the best interest of the business.
* The sharing economy and distributed trust
There is a shift towards integrated networks and platform-based models, both social and economic, which is predominantly being driven by the internet. The capability of sharing assets is increasing efficiencies and creating new business models and opportunities for increased social self-organization. The requirement for third-party’s to provide a level of trust for activities such as financial, contract and voting is being replaced by the emerging technology called ‘blockchain’ e.g. similar to previous means of value exchange like paper and coin money, gold and other valuables, there is now a less physical but equally formal option called bitcoin. What makes bitcoin unique though is the fact that it’s both digital and decentralized, meaning that value can be exchanged amongst parties without having to involve intermediaries; which makes this a safer, cheaper and faster transactional mode when compared to its predecessors. This type of digital value transfer is facilitated through blockchain protocols.
* The digitization of matter
Traditional industrial manufacturing is being transformed by producing printed objects from various types of raw materials. This is done through 3D-printing and has many benefits such as extreme product diversification, home production and human health opportunities e.g. 3D-printing is already used to manufacture a variety of medical devices, including instrumentation, implants and external prostheses. Future application will include the printing of live organs such as a heart or liver. Near life-like human organs, printed with synthetic materials, are currently used for intense physician training - watch
Also see
* Digital Revolution
* Digital Transformation
* Technology roadmap
* Technology readiness level
* Uber
* Amazon.com
* The Business Blockchain
* How Netflix bankrupted and destroyed blockbuster
Bibliography
* Forrester Research
* Leading Digital
* The Digital Transformation of Traditional Business
* [http://www.emeraldinsight.com/doi/abs/10.1108/10878571211209314 Saul J. Berman, (2012) "Digital transformation: opportunities to create new business models"]
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* Digital Futures

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