If it seems like we’re in a perpetual cycle of “new economies” – well, that’s because we are.
The latest new economy invokes the concept of digital transformation – how businesses are applying the cloud, mobility, artificial intelligence and other next-gen tools to build new, more efficient digital experiences for customers. The consensus of forecasters is that no business or organization can get away with shunning the world of digital transformation.
Recently I got a chance to explore this concept with thought leaders at the IDC Directions Conference in Santa Clara, California. The theme: “Tech Industry Redefined: the Rise of the DX Economy,” where DX stands for digital transformation or digital experience.
“In this new economy, enterprises will be measured by their ability to hit and exceed a whole new set of demanding performance benchmarks enabled by cloud, mobility, cognitive/artificial intelligence, the Internet of Things, augmented reality/virtual reality, and the DXs fueled by these technologies,” IDC wrote in its description of the conference. “DX efforts will no longer be ‘projects,’ ‘initiatives,’ or ‘special business units’; they will become the core of what industry leaders do and how they operate. Are you ready?”
Through my eyes, here are three takeaways from the event:
Connecting the Dots in the Digital Economy
There are multiple groups of players in the digital economy. Winners will be the ones who can connect the dots with players from multiple fields – such as cloud mega-platforms, IoT providers, digital developers, data providers, digital go-to-market partners and industry platforms/marketplaces.
According to IDC Senior Vice President and Chief Analyst Frank Gens, high-tech companies wanting to be a player in the digital economy need to be keenly aware that their large enterprise clients are no longer just clients.
They are now increasingly playing the role of partner or competitor in the digital economy. Several large “traditional” manufacturing companies, such as GE or John Deere, are creating their own line of digital services. For example, the GE Predix digital solution, designed to enable an industrial Internet of Things, is built on a large network of partners – system integrators, telcos, technology players, VARs, and network providers.
The Rise of Virtual and Augmented Reality
Technologies such as Augmented Reality and Virtual Reality are showing early signs of success in fields such as healthcare, even though they still have some challenges. Virtual Reality faces primitive interaction modes, significant computational data needs, societal impact and human challenges (a recent VR conference had to distribute vomit bags to its participants!)
According to analyst Tom Mainelli, Augmented Reality is the real game changer because it brings new information into your existing reality. Tom showed us a video of a group of medical students learning about bone structure by watching 3D augmented reality in the classroom. The use case is quite impressive but even AR has its own set of challenges: Optics are hard, hand-eye tracking is key, there’s a significant need for network and back-end resources and Power versus a demand for portability.
How to Address the New Digital Consumer
Digital experiences follow consumers in their daily Life Activities – Travel, Leisure and Entertainment, Working and Studying, Family and Social, Dining and Shopping, Health and Sports, Resting and Home Management.
The key to building a digital experience is to realize that it’s not what you do but how you do it. Much of customer digital experience involves new ways of doing things that are already part of our existing behaviors. DX makes the process better, more efficient, more personalized.
Analyst Greg Ireland shared examples of digital adoption in Television, News and Weather, because each one of these three sectors has gone through a series of major disruptions.
- In television, we now have hyper-personalized, multi-screen experiences. Our preferences can follow us from device to device. The experiences delivered over the Internet are very different from the communal static experiences in television from before.
- In news, consumers can now receive and consume news via social feeds. We have changed the distribution channel from physical to digital, but now it is also consumed outside of the context of the news provider’s own platform.
- Weather services first went from radio to online, but now are being enabled through voice-enabled intelligent assistants.
From a demographic standpoint, the focus is trending older. Instead of focusing on just millennials, we need to consider adults up to age 45, who are all active on social media, interested in keeping up with technology, value mobility and promote favorite brands.
In the next few years, user experience is going to be a critical to attract the digital consumer. User experience will be even more important than functionality and will overshadow it.
To hear from presenters directly, visit the IDC Directions page and scroll down to “Highlights of Directions 2017.”
Rebecca Scholl is vice president of strategy and portfolio for the commercial group at Conduent.