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Cut through digital hype

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Digital transformation. What does it mean to you, to me and to the companies who use the term so openly? DR THOMAS OOSTHUIZEN, Global Consulting Director at Acceleration, shares his insight and experience on what the term may mean and should mean.

Words… words … words … When I speak to clients, I hear many different interpretations of what “digital transformation” is, illustrating that the term confuses as often as it clarifies. Some believe that it’s simply a matter of using digital channels to sell and service clients more effectively, more efficiently and in a more personalised manner.

A significant number think it is about a new application or digital marketing initiative. Many regard it as a matter of using technology to drive business process innovation. And others say that their goal is nothing less than to be the Uber of insurance or the Airbnb of banking. Digital transformation has come to mean all of these things and more.

But when a term becomes shorthand for so many perspectives, it loses much of its usefulness. If we are not clear about the definition of digital transformation when we discuss it in boardrooms, how do we create a meaningful strategy for the future? And how do we align our organisations behind our vision?

Definition impacts strategy and the level of its conversation, so it matters

What is clear from my discussions with large brands is that C-suite executives know that their industry, business environment, and customers are evolving, and that their brands and organisations also need to adapt.

What they often do not know is how to bring about the changes that will help their companies to be profitable, sustainable and competitive in an era of disruptive change (yes, disruption has also become an overused and misunderstood term).

The reality is that most companies are reluctant to disrupt their own industries, often because they fear cannibalising their customer base or eroding their own margins. Hence, most choose to tweak some aspects of their business with digital technologies rather than to transform their business models in a fundamental manner. Many scholars like Clayton Christensen suggest that a new business, outside of the current business, is often the best way to have the best of two worlds. It means a company can become more consumer centric by using data and technology well in its current business, whilst also experimenting with more disruptive options enabled by technology.

For example, they may change how they understand and engage with consumers with the aid of digital tools and channels. This is an imperative and no longer up for debate. Unless this is done, nothing else is possible. This is an approach that has the advantage of being realistic and manageable to implement. But is it enough for a large brand to keep the competitive high ground in today’s fast-changing consumer environment?

After all, consumers judge their experiences with all industries they deal with by the benchmarks the digital disruptors have set. Why should interactions with an airline or bank not be as easy and personal as dealing with Amazon? These are the big questions customers are asking – brands should be ready to answer.

Asking the right questions

We recommend that executives begin by discussing their business’s context, challenges and customers so that they can have a clear view of how digital competitors, technologies, and consumer behaviour will affect their brands in the years to come. This exercise is about clarifying language so the organisation can build a digital strategy based on a shared understanding of its challenges and desired outcomes.

The broad questions senior managers should be asking are:

·         How exactly is digital technology changing the way our customers behave and the way that existing, emerging and potential competitors do business?

·         What are the best companies across industries doing across the spectrum of digital enablement? What can we learn from them about the future of our industry and our business?

·         How should we change our business to defend and extend market share, grow profits and ensure relevance as digital technology evolves in the years to come?

·         An interesting point to note here is that the real nature of digital disruption for an established industry isn’t always obvious. Think, for example about Uber, which may have a dramatic impact beyond the taxi industry in the years to come. By making personal transport an affordable service commodity, it could eat away at the edges of the car and auto insurance industries.

Brands therefore must understand how consumers behave rather than simply looking at direct competition. Remaining relevant is not simply a matter of creating an app or smartening up their website, but finding ways to use customer data to create more meaningful and relevant customer experiences at every touch point. It is notable that consumers often do not have finite industry boundaries.

Beyond the obvious

By looking closely at competitors and the technology landscape, executives can see how emerging technologies and disruptive rivals could attack their market share. They can then create the strategies necessary to protect their market share and possibly identify ways to expand into new markets using digital technology.

The next step is how to do it, and the answer won’t be the same for every business. Some businesses will have visionary leadership, agile processes, innovative cultures, young workforces with digital skills, and modern technology platforms, so they’ll be able to embrace digital transformation more wholeheartedly.

Others may be encumbered by conservative leadership, legacy technology, regulation, siloed processes, and their workforces. They’ll need to look at their assets – data, customers, skills and channels – and find ways to put them to work in a digital world. In some cases, they might need to launch new brands, form joint ventures or innovation groups to fast-track their digital programmes.

In either instance, what really matters is that the business stays close to consumers, keeps its eye on new technologies, and keeps building new products and experiences that meet consumers’ evolving needs. There is no excuse not to become more consumer centric – for that to happen, data and insights are the starting points – and how marketing technology can support exceptional customer experiences. In the very least, this will enable a strong defensive against disrupters, even if it won’t protect a brand indefinitely.

So ultimately, underpinning the organisation’s ability to meet these goals is its ability to gather, organise and analyse customer data.

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Money talks and electronic gaming evolves

Computer gaming has evolved dramatically in the last two years, as it follows the money, writes ARTHUR GOLDSTUCK in the second of a two-part series.

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The clue that gaming has become big business in South Africa was delivered by a non-gaming brand. When Comic Con, an American popular culture convention that has become a mecca for comics enthusiasts, was hosted in South Arica for the first time last month, it used gaming as the major drawcard. More than 45 000 people attended.

The event and its attendance was expected to be a major dampener for the annual rAge gaming expo, which took place just weeks later. Instead, rAge saw only a marginal fall in visitor numbers. No less than 34 000 people descended on the Ticketpro Dome for the chaos of cosplay, LAN gaming, virtual reality, board gaming and new video games. 

It proved not only that there was room for more than one major gaming event, but also that a massive market exists for the sector in South Africa. And with a large market, one also found numerous gaming niches that either emerged afresh or will keep going over the years. One of these, LAN (for Local Area Network) gaming, which sees hordes of players camping out at the venue for three days to play each other on elaborate computer rigs, was back as strong as ever at rAge.

MWeb provided an 8Gbps line to the expo, to connect all these gamers, and recorded 120TB in downloads and 15Tb in uploads – a total that would have used up the entire country’s bandwidth a few years ago.

“LANs are supposed to be a thing of the past, yet we buck the trend each year,” says Michael James, senior project manager and owner of rAge. “It is more of a spectacle than a simple LAN, so I can understand.”

New phenomena, often associated with the flavour of the moment, also emerge every year.

“Fortnite is a good example this year of how we evolve,” says James. “It’s a crazy huge phenomenon and nobody was servicing the demand from a tournament point of view. So rAge and Xbox created a casual LAN tournament that anyone could enter and win a prize. I think the top 10 people got something each round.”

Read on to see how esports is starting to make an impact in gaming.

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Blockchain unpacked

Blockchain is generally associated with Bitcoin and other cryptocurrencies, but these are just the tip of the iceberg, says ESET Southern Africa.

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This technology was originally conceived in 1991, when Stuart Haber and W. Scott Stornetta described their first work on a chain of cryptographically secured blocks, but only gained notoriety in 2008, when it became popular with the arrival of Bitcoin. It is currently gaining demand in other commercial applications and its annual growth is expected to reach 51% by 2022 in numerous markets, such as those of financial institutions and the Internet of Things (IoT), according to MarketWatch.

What is blockchain?

A blockchain is a unique, consensual record that is distributed over multiple network nodes. In the case of cryptocurrencies, think of it as the accounting ledger where each transaction is recorded.

A blockchain transaction is complex and can be difficult to understand if you delve into the inner details of how it works, but the basic idea is simple to follow.

Each block stores:

–           A number of valid records or transactions.
–           Information referring to that block.
–           A link to the previous block and next block through the hash of each block—a unique code that can be thought of as the block’s fingerprint.

Accordingly, each block has a specific and immovable place within the chain, since each block contains information from the hash of the previous block. The entire chain is stored in each network node that makes up the blockchain, so an exact copy of the chain is stored in all network participants.

As new records are created, they are first verified and validated by the network nodes and then added to a new block that is linked to the chain.

How is blockchain so secure?

Being a distributed technology in which each network node stores an exact copy of the chain, the availability of the information is guaranteed at all times. So if an attacker wanted to cause a denial-of-service attack, they would have to annul all network nodes since it only takes one node to be operative for the information to be available.

Besides that, since each record is consensual, and all nodes contain the same information, it is almost impossible to alter it, ensuring its integrity. If an attacker wanted to modify the information in a blockchain, they would have to modify the entire chain in at least 51% of the nodes.

In blockchain, data is distributed across all network nodes. With no central node, all participate equally, storing, and validating all information. It is a very powerful tool for transmitting and storing information in a reliable way; a decentralised model in which the information belongs to us, since we do not need a company to provide the service.

What else can blockchain be used for?

Essentially, blockchain can be used to store any type of information that must be kept intact and remain available in a secure, decentralised and cheaper way than through intermediaries. Moreover, since the information stored is encrypted, its confidentiality can be guaranteed, as only those who have the encryption key can access it.

Use of blockchain in healthcare

Health records could be consolidated and stored in blockchain, for instance. This would mean that the medical history of each patient would be safe and, at the same time, available to each doctor authorised, regardless of the health centre where the patient was treated. Even the pharmaceutical industry could use this technology to verify medicines and prevent counterfeiting.

Use of blockchain for documents

Blockchain would also be very useful for managing digital assets and documentation. Up to now, the problem with digital is that everything is easy to copy, but Blockchain allows you to record purchases, deeds, documents, or any other type of online asset without them being falsified.

Other blockchain uses

This technology could also revolutionise the Internet of Things  (IoT) market where the challenge lies in the millions of devices connected to the internet that must be managed by the supplier companies. In a few years’ time, the centralised model won’t be able to support so many devices, not to mention the fact that many of these are not secure enough. With blockchain, devices can communicate through the network directly, safely, and reliably with no need for intermediaries.

Blockchain allows you to verify, validate, track, and store all types of information, from digital certificates, democratic voting systems, logistics and messaging services, to intelligent contracts and, of course, money and financial transactions.

Without doubt, blockchain has turned the immutable and decentralized layer the internet has always dreamed about into a reality. This technology takes reliance out of the equation and replaces it with mathematical fact.

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