Digital Transformation Affects Every Business

According to KuppingerCole principal analyst Martin Kuppinger, digital transformation is an unstoppable force and will affect every industry and business.

In a conference in Munich, Kuppinger told the opening session of the 2015 European Identity & Cloud conference that "It is far wider than just the internet of things [IoT].

"This means all organisations need to understand what they need to do to mitigate the risks."

He outlined eight "fundamentals" for digital risk mitigation in the coming age of digital transformation.

Kuppinger said the first fundamental is realising that the digital transformation affects every organisation and that there is a real need to think of a new business model.

He said: "Just think about smart manufacturing, smart wallets, smart vehicles, smart homes, smart grids, e-books, digital music, online retail and online payments."

The second fundamental, according to Kuppinger, is to remember that digital transformation is here to stay.

He added: "Digital transformation is inexorable. It is changing a lot of things. It is changing products, but is also giving rise to associated services that are becoming almost more important."

According to Kuppinger, this means business models will need to change, which will in turn, force organisation changes.

He added: "Organisational change is a real challenge, but it is necessary as ecosystems change and new partnerships are formed."

Kuppinger said that the digital transformation seems to be typically associated with the IoT but said that this transformation is already in so many industries without any connected things; for example, smart manufacturing is about connecting manufacturing environments and this operational technology is not part of the IoT.

He said: "Connecting things for the sake of connectivity does not create business; it is the change in business models and the services that make the business and most businesses providing things will earn more with services than with the things.

"It is therefore important for organisations to understand what they need to do to change, because there is no success without agility, which relates to fundamental number four, which is that digital transformation mandates organisational change."

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