The article by Maxwell Wessel goes into the reasons why Digital Transformation is a crucial focus for organizations and businesses nowadays, and how they can leverage its benefits by implementing change. With the advancement of Information Technology (IT), paired with easy and cheap availability of resources, the capability to gain a competitive advantage has changed. IT has enabled growth in a way that is entirely different from how traditional industries achieved it. Now businesses can leverage IT to find customers in every part of the world. Due to the prevalence of IT, the facilities that decided how businesses of the past grew can now be taken out on rent.

Wessel puts across some points that are easy to comprehend and agree with and others that do not seem very clear. One of the points that he puts across is how big businesses have grown without the need to make traditional investments in infrastructure. One of the prime examples of this is Apple and their i-devices. Apple does not itself manufacture its players, laptops or phones. Instead, it uses the manufacturing base of Foxconn. In the meantime, it focuses its efforts on design and user experience. It prepares a framework that is provided to Foxconn, and in turn, they manufacture what has become the epitome of mobile computing around the world. Therefore, it should be possible for anyone with a sensible business idea to outsource all other aspects of the business to vendors, and achieve great success. Wessel calls this a decomposition of an industrial company, and it truly is a breaking down of a successful venture into individual pieces.

Wessel also pushes the idea that data is the most important commodity and raw material today. Just as the industrial revolution was powered by machinery and oil, the current industries are powered by data. It is the fuel for the digital transformation that can be seen around the globe. He also points out that data by itself is not of value. Instead, it is the way in which it is used, collected and understood. Wessel further details the essential qualities of data which make it useful in business today.

The scalable nature of data is an interesting concept presented by Wessel. Traditional scalability of any business component was costly and time-consuming. Moreover, a failure post such scaling was detrimental to the entire business. However, data can be scaled at little to no cost at all. This is the reason why companies like Uber have become successful. They have taken data and scaled it as per their requirement at minimal cost. This is an altogether new model of operation.

The second property data that is interesting is its reenforcable nature. As time passes, the data collected by an organization gets better due to reinforcement. This means that smaller bits of information keep getting added and make the profile of, say, an individual customer even stronger. This allows businesses to get a better sense of their end user over a period of time until they can completely customize their offering at an individual level. A clear case in point here is Netflix. When a new user logs in, the recommended shows may not match up to his expectation. However, over time Netflix analyses patterns and preferences, and builds a robust profile to showcase targeted content for the user. Moreover, this capability will only exist with Netflix. The methods can be copied, but a new streaming service will not be able to target customers immediately based on the processes only. They will have to reinforce the data in the same manner that Netflix has over a long period of time. Wessel draws a parallel with the typical concierge services that many high profile brands have. A human interface does allow instant personalization, but an algorithm that reinforces data over a period of time can become just as good at a fraction of the cost. This is the reason why it can be disruptive.

Some other concepts that Wessel presents are slightly confusing. This is because they do not fit in with the theme of the overall article. One of the challenges mentioned is understanding the incentives to transform digitally by the employees. Wessel talks about the difficulty of digital transformation in businesses which have a large employee base and a huge network of vendors and suppliers. The internal disincentive for employees is a loss of a job in the case of digital acceptance b the organization. Externally, Wessel calls for an evaluation of vendors and suppliers to understand whether they will sustain in the future. It is understandable that there may be a loss of jobs as more and more technology comes into the business. However, it is unclear as to how an external partner may be affected by this change, and why they should be evaluated for longevity.

Another challenge mentioned is having a clear understanding of one’s offering. Wessel is of the opinion that many businesses believe that customers will buy what is sold to them. However, it is a vital principle of any company that a need must be present within the client base. If there is no need for a product, they will not buy it. This is especially true in the digital world, especially when one looks at the thousands of startups that form and fail every day. Thus, any successful organization already has a product or service that is servicing the specific needs of its clients.

The next challenge as perceived by Wessel is about building new metrics, partners, and organizations. He talks of how many old partners and suppliers will have to be left behind by businesses in a modern economy. The reason for this will be their inability t adapt to the new systems. However, this is confusing because this has always been the case. Any business partner that does not adapt to changing conditions, whether economic or technical, has a detrimental effect on the business. Typically, they are always left behind, and if they do not adapt, they may even fail. Thus, it is unclear as to why this is a new challenge in the digital transformation landscape specifically.

 
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