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INFS7040 Digital Transformation

• Please refer to the Class summary for the teaching team contacts.
COURSE LEARNING OUTCOMES
Students will be able to:
1. Identify how Digital Transformation impacts corporate strategies (Remember & Ask);
2. Classify different forms of Digital Disruption (Understand & Ask);
3. Choose appropriate concepts and theories for developing business models (Apply & Acquire);
4. Gauge the role information technology and the World Wide Web play in transforming business models and recognize its social and ethical implications (Analyse & Appraise);
5. Compare all types of relevant evidence towards finding an appropriate business model on the Web for a disrupted organisation (Evaluate & Aggregate);
6. Design an appropriate business model for an organisation that addresses the disrupted environment and design the change process required to arrive at the new business model (Create & Assess)
COURSE LEARNING OUTCOMES
• Note: the course has a management orientation, but sometimes you need to understand the underlying technologies to make decisions.
– It is mainly for current or future executives/managers who will work with and manage digital technologies, but are not necessarily ICT professionals
– Class has range of students – covers basic concepts to in-depth case analysis
COURSE STRUCTURE
Each week
• 2 hours lecture – presentation, case studies
– Questions/exercises similar to exam questions
• 1 hour tutorial – worksheet provided
– Questions/exercises similar to exam questions
Focus on material covered in lectures and tutorials.
READINGS
• There is NO required textbook
• Weekly readings will be posted to Wattle
• Business model navigator book will be used extensively in two lectures
– Digest: http://sadaghianifar.com/uploads/2f58cfd1ea5446298adb215b7eeddd51.pdf
– Website:https://businessmodelnavigator.com/Gassmann, O., Frankenberger, K., & Choudury, M. (2020). The Business Model
Navigator: The strategies behind the most
successful companies (2nd ed.). Upper
Saddle River, NJ: FT Press.
Week 1B – Digital Transformation
LEARNING OUTCOMES
• Define Digital Transformation
• Identify external drivers that are enabling
Digital Transformation
• Understand the phases of Digital
Transformation
DIGITAL TRANSFORMATION
… 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.
What happened in the last decade+:
– iPhone 1 released in 2007 (Smartphone)
– AirBnB founded 2008 (Accommodation sharing)
– Uber founded 2009 (Car sharing)
– Bitcoin introduced in 2009 (Blockchain)
– Kickstarter started in 2009 (Crowdfunding)
– Instacart founded 2012 (Grocery delivery)
– Ofo founded in 2014 (Bike sharing)
– TikTok founded in 2016 (Short video/live streaming)
– Bird founded in 2017 (Scooter sharing)
– Upstart went public In late 2020 (AI lending platform)
DIGITAL TRANSFORMATION

External Drivers of Digital 

Transformation

• Digital
Technology
• Digital
Competition
• Digital
Customer
Behaviour
Phases of Digital
Transformation
• Digitization
• Digitalization
• Digital
Transformation
Strategic
Imperatives of Digital
Transformation
• Digital
Resources
• Organizational
Structure
• Growth Strategy
• Metrics and
Goals
DIGITAL TECHNOLOGIES
In 2009 Knowledge@Wharton set out to answer for the Nightly Business Report to create a list of the “Top 30 Innovations of the Last 30 Years”
Internet, broadband and the World Wide Web came out on top as the most important innovations of the last 30 years
Source: Forbes (2009): Top 30 Innovations Of The Last 30 Years. 19th February 2009. Accessed 24-02-2020,
[https://www.forbes.com/2009/02/19/innovation-internet-health-entrepreneurs-technology_wharton.html#5ebfcd432b2f]
INTERNET
Source: Statista (2023): Number of internet users worldwide from 2005 to 2019. Accessed 23-07-2023,
[https://www.statista.com/statistics/273018/number-of-internet-users-worldwide/]
INTERNET ACCESS IN THE EUROPEAN UNION
(EU)
Source: Statista (2023): https://www.statista.com/statistics/377585/household-internet-access-in-eu28/. Accessed 23-07-2023,
[https://www.statista.com/statistics/377585/household-internet-access-in-eu28/]
PERCENTAGE OF INDIVIDUALS USING THE
INTERNET WORLDWIDE IN 2021
Source: Statista (2022): Percentage of individuals using the internet worldwide in 2021, by region. Accessed 01-07-2022,
[https://www.statista.com/statistics/333879/individuals-using-the-internet-worldwide-region/]
DAILY TIME SPENT ON SOCIAL NETWORKING
Source: Statista (2022): Daily time spent on social networking by internet users worldwide from 2012 to 2022. Accessed 01-07-2022,
[https://www.statista.com/statistics/433871/daily-social-media-usage-worldwide/]
NUMBER OF SOCIAL MEDIA USERS WORLDWIDE
(FORECAST)
Source: Statista (2022): Number of social media users worldwide from 2018 to 2027. Accessed 01-07-2022,
[https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/]
WORLD WIDE WEB
Internet ≠ World Wide Web
• WWW is only a subset of the Internet
– HTTP (World Wide Web)
– HLS, RTSP, WebRTC etc.
(Video Streaming)
– POP/IMAP (E-mail)
– P2P (File sharing)
– FTP (File transfer)
– OTR (Instant messaging protocol)
Internet
HTTP
World Wide
Web
P2P
POP
IMAP FTP
Video
Streaming
(HLS, RTSP,
WebRTC etc.)
OTR
BROADBAND
• Mobile computing has rapidly evolved over the last three decades
• Wireless technology made access to the internet ubiquitous
• 5G allows devices to communicate with each other COST OF COMPUTERS IN 1980
• TRS-80 computer with printer for USD $5,492
→ USD $17,193 in today’s money
Source: Anthony Catalano (2007), TRS-80 in Radio Shack Brochure 1980 Eighties 80s. Accessed 20-02-20, [https://www.flickr.com/photos/badwsky/2123730984/]
MOORE’S LAW MADE CPU’S A COMMODITY
– Digital technology contributed to national productivity for decades, but now productivity gains are mostly from software
– Effect of ICT improvements on GDP often not measurable and subject to diminishing returns → “Productivity Paradox”.
Source: Economist (2015), The end of Moore’s law. Accessed 20-02-20, [https://www.economist.com/the-economist-explains/2015/04/19/the-end-of-moores-law]

Moore’s Law (the # of transistors in CPUs doubles ~every 2 years) has contributed to a significant cost reduction of hardware between 1965-2015 

COMPUTERS ARE EVERWHERE

• The new MBUX Hyperscreen dashboard in Mercedes S-Class has 8 CPU cores, 24 GB RAM and 46.4 GB per second RAM memory bandwidth
Source: Daimler (2021): MBUX Hyperscreen. The big in-car cinema. Accessed 04-02-2021,
[https://www.daimler.com/innovation/digitalisation/connectivity/mbux-hyperscreen.html]
INTERNET OF THINGS (IOT)
Network of physical objects, "things”, that are embedded with software and hardware to exchange data with other devices and systems over the Internet.
• Gartner, Inc. forecasted the enterprise and automotive Internet of Things (IoT) market to be 5.8bn endpoints in 2020, a 21% increase from 2019.
– e.g., Xiaomi sold 210m IoT devices in 2020 in more than 90 countries, making it the world’s largest consumer IoT firm, with its revenue surpassing $37bn.
Source: Gartner (2019): Gartner Says 5.8 Billion Enterprise and Automotive IoT Endpoints Will Be in Use in 2020. Accessed 19-07-2021,
[https://www.gartner.com/en/newsroom/press-releases/2019-08-29-gartner-says-5-8-billion-enterprise-and-automotive-io]
Source: Haiyang Yang, Jingjing Ma, and Amitava Chattopadhyay (2021): How Xiaomi Became an Internet-of-Things Powerhouse. Accessed 19-
07-2021, [https://hbr.org/2021/04/how-xiaomi-became-an-internet-of-things-powerhouse]
DATA
• Actively generated data
– Content (e.g., Email, Social Media, Posts,
Messages, Apps)
– Pictures, Videos, Music
– Playlists (Music, Video)
• Passively created data
– History (Search, Purchase, etc.)
– Mouse movement/Keyboard strokes
– Location, Speed, Mode of transport
– Device Information including IoT device use
(Smart Home, Watch, Fitness tracker etc.)
– Biometrics
• Passively created data exceeds actively created data by orders of magnitude and is growing more rapidly
Source: Statista (2021): A Minute on the Internet in 2021. Accessed 21-02-2022, [https://www.statista.com/chart/25443/estimated-amount-of- data-created-on-the-internet-in-one-minute/]
DIGITAL COMPETITION
• Competition on the Web has become more global, e.g.,
– TikTok founded in 2016, with over 1bn users globally, in 150+ countries was valued at $140bn in latest fundraising → said tobe worth $400bn now
 • Big internet companies FAANGs (Facebook, Apple, Amazon, Netflix, Google) are entering domains outside their presumed “core competencies”
– Apple Car
– Google Android TV and Google Android Automotive
– Facebook Metaverse (i.e., AR/VR via Oculus)
Source: CBSInsights (2021): The Complete List Of Unicorn Companies. Accessed 19-07-2021 [https://www.cbinsights.com/research-unicorn-companies]
CONSUMER BEHAVIOUR
• Digital touchpoint involved in almost all purchasing decisions
• Digital technologies allow consumers to co-create value by designing and customizing products, e.g.:
– Google Reviews
– Tripadvisor
– Waze
– Open-Source Ikea
DIGITIZATION
• Digitization describes the conversion of analogue information into digital information, e.g.:
• Cassette, VHS → mp3, mp4
• Prescriptions → Electronic Prescriptions
• Boarding Pass → QR Code
• Academic Papers → Online
repositories such as arXiv.org
DIGITAL TECHNOLOGY IS PENETRATING ALL INDUSTRIES
(1) Consumer packaged goods (31%)
(2) Automotive and assembly (32%)
(3) Financial Services (39%)
(4) Professional services (42%)
(5) Telecom (44%)
(6) Travel, transport and logistics (44%)
(7) Healthcare systems and services (51%)
(8) High tech (54%)
(9) Retail (55%)
(10) Media and entertainment (62%)
Source: J. Bughin, L. LaBerge, and A. Mellbye, The case for digital reinvention. Kinsey Quarterly, Feb 2017.
ROI OF DIGITAL TECHNOLOGY INVESTMENT
Organizations
• Need organizational change as well as digital technologies to reap value
• Results may not show up for some years
Customers
• Consumers may be real beneficiaries, with improved goods and services. Firms invest just “to keep up” – a “competitive necessity”
DIGITALIZATION OF PRODUCTS AND SERVICES
Analog Digitized
Owning Assets (Taxi Companies) Renting Assets (Uber/Didi)
Analog Products (Universal Music) Digital Products (Spotify)
Uniformity of Product (Hilton) Variety of Product (AirBnB)
Selling Cars (Toyota) Selling experience (Tesla)
Physical Locations (Blockbuster) On-Demand (Netflix)
Transport Hub Locations (Avis, Hertz) Everywhere (Turo, DriveNow)
DIGITAL TRANSFORMATION
It describes a company-wide change that rearranges its
processes to change the business logic of a firm
• Goes beyond digitalization — the changing of simple organizational processes and tasks.
• Introduces a new business model, e.g.,
– Disney → Disney+
– Microsoft → Azure (Cloud software)