22 January 2018
Blogs by author: Ashish Gupta, President, UK & global banking and financial services
The digital age will create tremendous opportunities for economic growth and social progress. The big challenge for us all is to make sure that the benefits are fairly shared by all, not just a few. Because the real purpose of technology is to make life easier and better for people.
Knowledge is power. When we have more, higher quality information on tap, we can take more rounded, insightful decisions. And technology can help close the gap between those who have knowledge and those who don’t.
Take investing. Today, anyone who wants it, has free access to financial data that was only available at a cost just a few years ago. As a result, individuals can take more informed financial decisions and fund management charges have decreased significantly.
A shrinking knowledge gap is also seeing rural communities reap the benefits. In India, farmers have suffered in the past, due to price volatility, crop failures and a system which fails to reward agricultural producers fairly. Now, however, they use digital services to check market rates, cut out middlemen and sell their crops directly to customers at a good price.
New technologies driving new models
Ubiquitous connectivity, software defined networks and cloud services are the building blocks of the digital age. Open standards and platforms create a level playing field for innovators and entrepreneurs, as well as established players.
In every industry sector, digital disruptors are finding new opportunities, exploiting innovative platforms and capitalising on new channels. They are data-driven, hyper-connected and super agile, looking to serve any un-met customer demand. So how can the established business compete? By taking bold steps and with a start-up mindset:
- Disrupt your own business model.
- Favour a more agile way of working over old style IT ‘waterfall’ delivery.
- Stop making things and write software instead.
- Think like a software developer.
- Constantly make improvements – or start over again.
Rolls-Royce is a great example of a company that has transformed its business model from one based on manufacturing products to one based on services. One of the world’s leading manufacturers of aircraft engines, Rolls-Royce has moved away from simply selling engines and now derives its revenues from long term service agreements, charged at a fixed cost per flying hour
basis. Central to this is the telemetry data that flows round the clock into Rolls-Royce from aircraft engines in flight. This data gives the company the knowledge it needs to plan maintenance or repairs in a way that minimises disruption to the airline. This approach has enabled Rolls-Royce to extend the service intervals between engine overhauls by around 25 per cent – a gain of significant value to its customers.
The roles of IT and government
The IT sector and government each have a role to play as we seek to create a level playing field for the digital economy. Government must set out a framework and infrastructure that enables innovation. For example, in the UK there are tax incentives to encourage investment in smaller companies (which can grow into bigger companies). Governments and industry can both help to encourage the development of a skilled, digitally literate population. Regulation such as the EU’s General Data Protection Regulation help protect personal data and enforce compliance.
The role of technology companies is to create a sound platform for digital transformation to happen. That will involve collaborating with others to do things differently. For example, connectivity is fundamental to a level playing field. Large companies can work with smaller innovators to develop and make available new ways to deliver connectivity in remote areas, using tethered drones, light waves or other innovations.
The measure of success
In addition, it’s our responsibility not only to leverage and drive technological change, but to also bring thought leadership to the table. To talk not just about IT functionality but to imagine how technology can create a better overall experience for people, how it can improve the quality of life.
The rapid rate at which technology is developing and driving new models of business and services can bring greater prosperity. Ultimately, giving everyone access to these new economic opportunities is essential to our shared future. We can judge digital transformation a success if it helps us reach this goal.