Internet of Things in Business Transformation

The term transformation has become a buzzword today which is used in various ways to run the organization smoothly which makes the process easier and productive. Corporate Renewing Centre organized a conference at INSEAD where the term business-transformation was defined as “A fundamental change in organizational logic, which resulted in or was caused by a fundamental shift in behaviors” [7]. While defining transformation in detail, following four constructs were given:

Re-engineering: It is a technique to improve organizational efficiency by redesigning the business processes so that the organization may get self-aligned for future and raise its market share and profit margins.

Restructuring: It is required whenever a business model of the organization gets changed due to any reason or factor for the survival of the organization and ultimately for the growth of the organization. It reduces the cost, emphasizes on main items, adopting recent technologies, proper utilization of resources available, etc. Merging with other companies can also take place.

Renewing: It’s a continuous and knowledge oriented process because there are various changes which are faced by the organization on a regular basis and some of them have the potential for major strategic change in organization’s operations which add the stability factor for the organization. For example, when a new technology is in the market, strategy has to be reviewed to find out that organization would get benefited by adopting it or not?

Regeneration: It is a technique which reproduces the organization so that they become capable of incorporating the new employees while organizations are losing the old and experienced employees and at the same time an introduction of new employee’s capabilities, attitude and goals takes place. In today’s world almost all the organizations are getting changed and hence facing with regeneration. Regeneration improves the current business processes and primarily revising the ways and other opportunities available [7, 8].

As we observe from the current scenario where people prefer online shopping just to save the time and also they are getting good quality products or services at their doorstep in the competitive environment of the organizations, hence lots of businesses are taking the initiatives for adopting the business transformation from traditional system. In the next section, we are going to discuss digital transformation, various technologies which support digital transformation and its challenges. In INDIA we are moving towards the implementation of smart city concepts as well, so we need smart environment where automation of the processes in majority may take place [9, 10].

The term “Digital transformation” has become the first choice of the market leaders who are adopting recent technologies for adding more values to their valued customers, employees, and other stakeholders. Digital transformation reforms various businesses processes, IT operations and corporate culture of the organization [11]. It uses digital technologies available in the market for the designing and implementation of a process to make it more productive or valuable for the organization. The motive behind this is to use recent technologies not only for the sake of repeating existing services digitally, but also to apply technology for the transformation of those services into something considerably more better as improved alternative. In digital transformation, several recent technologies can be considered like cloud computing, Internet of Things (IoT), blockchain, big-data, data analytics, and artificial intelligence. Many projects based on digital transformation have major contribution in the competitive environment for the large organizations to compete with quicker and purely digital competitors. Other types of small business organizations are also moving in the same direction hence the use of recent technologies has been increased nowadays [12].

According to the survey done by IDC (International Data Corporation), the worldwide investment on various technologies which are required for the implementation of digital transformation including hardware, software, and services has reached to $1.3 trillion by the year 2017. Companies dealing with the technology research expect costing to almost double as compared to now and by the year 2021 the overall investment for digitalization will exceed $2.1 trillion globally. A survey has been conducted by IT analyst Gartner regarding business issues of the business leaders as well as some technological aspects. Around 460 business leaders including CEO and senior executives has participated in the survey. Figure 4.1shows the CEO top business priorities for the year 2018 and 2019. 62% of the executives said that the initiative was taken by the management or the management had a transformation program to transform their business more digitally. More than half (approximately 54%) of the executives said that the objective of their respective digital business is totally transformational, whereas 46% of the executives said that the motive behind the initiative taken by the management is optimization [13]. Above data can be represented and easily analysed with Table 4.1. Approximately half of the executives were agreed for the objective as optimization.

Figure 4.1 CEO Top Business Priorities for 2018 and 2019 Source: Gartner.

Table 4.1 Various objectives of organizations for transformation given by 460 executives.

As the customer expectations are growing, and every business is trying hard to keep up with them. Today it is far easier than ever before for consumers to explore alternatives to meet their needs. That is why each company has to make extra efforts to ensure that their customers stay with them. It will be possible only if the company digitally transforms itself to cater to its customer expectations. Every industry needs to adopt this new digital world by moving towards a digital transformation. There are few examples of big companies that successfully underwent a digital transformation.

1 Domino’s: It is a very common and best example of user-centered process design which utilizes the power of operations. Technology running for pizza tracker system lets the customers to get into the operational process of the company. It allows users to know exactly which stage in the operation process the pizza is. Company ensures customers a guarantee of 30-minute deliveries and an app to track if the order is being placed, in queue, pizza is being made or in route to the user which helps in increasing user satisfaction. Other examples are:

2 Walmart: They have to reinvent the approach to the customer. They did it so successfully, that Harvard Business Review named the company ‘the digital winner’.

3 Disney: They went fully digital when they introduced RFID technology used in the parks covering various stages/processes like identifying all the guest’s tickets or passes which is further shared with the connected wireless system to make the visit more convenient for the visitors.