All businesses are now digital businesses

It used to be said that all large businesses are software businesses. That’s what I reflected in the Internet Party’s Digital Economy and Innovation Policy (Summary, Full Policy). But, to be more accurate, every large organisation is now a digital business.

A Press Release from Gartner makes some interesting points. Sure it’s in Gartner’s self-interest to emphasise change and the need for its insights but even then there are some points worth noting in these extracts:

The impact that the digital business economy is having on the IT industry is dramatic. Since 2013 650 million new physical objects have come online. 3D printers became a billion dollar market; 10 percent of automobiles became connected; and the number of Chief Data Officers and Chief Digital Officer positions have doubled.

In 2015, all of these things will double again.

Gartner defines digital business as new business designs that blend the virtual world and the physical worlds, changing how processes and industries work through the Internet of Things.

“Every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half a million IP addressable objects in 2020.”

There is a dramatic shift in IT spending power. Mr. Sondergaard said there is a shift of demand and control away from IT and toward digital business units closer to the customer.

“Thirty-eight percent of total IT spend is outside of IT already, with a disproportionate amount in digital. By 2017, it will be over 50 percent,” Mr. Sondergaard said. “Digital startups sit inside your own organization, in your marketing department, in HR, in logistics and in sales. Your business units are acting as technology startups.”

How many CEOs and CIOs think of business units acting as tech start-ups? What are the implications of that?

Gartner’s analysis seems to miss one aspect of being a digital business- it’s not only sensors but instrumentation. Large organisations are becoming more real-time, more data-driven, and more agile. And this aspect of being a digital business has far more implications than the tech start-ups angle alone.

 

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One thought on “All businesses are now digital businesses

  1. Pingback: Four short links: 10 October 2014 - O'Reilly Radar

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