Understanding Digital Transformation: Part 1 - Background

• By Cathie Norris, Elliot Soloway
• 07/02/18

• "Markets now move at the speed of technology. We live in exponential times and the pace of change is accelerating. Adaptation requires radical transformation. … Disruption is the new normal." (Italics is our emphasis!)
• "Digital disruption is at the heart of all the conversations I have with CEOs today. And this is not surprising, as it presents the most significant threats and opportunities any of us have faced in business. … Business leaders tell me that they are intent on disrupting before they are disrupted. … And success requires CEOs to develop the right leadership capabilities, workforce skills and corporate cultures to support digital transformation."
• "By IDC's estimates, businesses will spend $1.1 trillion in 2018 on digital transformation technology and services, an increase of 16.8 percent over the $958 billion spent in 2017."  (FYI: 1 trillion is 1,000 billion. A thousand billions. That’s a lot of money!)

In one sentence, what is "digital transformation?"

• "Digital transformation involves using digital technologies to retool business models and processes to make them more efficient or effective."

Let’s unpack that dense sentence:

• "… using digital technologies" — The new acronym for the range of technologies encompassed by the term "digital" is SMAC: social, mobile, analytics and cloud technologies.
• "… retool business models and processes" — Simply put a "business model" is the way a company makes money, e.g., one of Apple’s business models is to manufacture iPhones and sell them to consumers; and if the rumors are true that Apple will create a new streaming service that includes original TV, collecting subscription fees would be another business model for Apple. (Question: What is K-12’s "business model?" Ouch. Hmm.)
• "… make them more efficient or effective" — Unpacking  the terms "efficiency" and "effectiveness" will take a few more sentences to explore; but in that exploration, we should be able to better explain the impact of true digital transformation — not just digital transition. Here goes…

By the 1980’s computers had moved out of the university research labs and into the business world. But businesses were not experiencing the gains in productivity that were promised by the companies pushing the computers.  A succinct description of that "Productivity Paradox" was made by the Nobel Laureate in economics, Robert Solow (probably a distant relative of ES):

• "We see computers everywhere except in the productivity statistics."

A pretty pithy one-liner, eh?!

In 1989, Dr. Shoshana Zuboff, Professor, Harvard Business School, provided an analysis of the Productivity Paradox in her seminal work entitled "In the Age of the Smart Machine." In brief, Zuboff distinguished between "automating," where computers replaced an existing, paper-and-pencil process, with some gain in efficiency — usually — and "informating," where the computer was used to invent a whole new process — and gain significant increases in efficiency and effectiveness. For the most part, business were automating and not informating!  (What educational model of changes does example remind you of? SAMR, perhaps?)

An example:  before Dell Computer came on the scene, the computer was used to manage parts’ inventories, i.e., computers were used to automate an existing process. But Dell "informated" – Dell eliminated the need for parts inventory (for the most part) by using an emerging technology — the Internet. In the mid-90’s Dell used the Internet to enable end-users to configure and order a personal computer, thereby accumulating the need to order specific numbers of parts, then Dell used the Internet to order the various parts from its suppliers — manage the supply-chain, and then Dell used the Internet to schedule delivery of those parts so Dell could engage in "just-in-time" manufacturing.  These changes — these disruptive changes — to the ordering and delivery of parts enabled Dell to manufacture computers at a much reduced price, which in turn enabled Dell to offer computers to customers at a reduced price. For a while — until the other computer manufacturers copied, in effect, Dell’s "business model" - Dell was the king of computer manufacturing — and Dell reaped kingly financial benefits from its innovative changes!

Now the term "disruptive change" entered the business lexicon in 1997 with the publication of another seminal work, "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail," by Clayton Christensen, professor at Harvard Business School. (The book was essentially his Ph.D. dissertation (Harvard) which he completed at age 40 after a highly successful business career; Christensen is an interesting individual!)

For example, why did Kodak fail? Kodak virtually invented consumer photography with the Brownie camera and the Instamatic camera and film, film, film. But Kodak didn’t see digital — and filmless — photography coming — until it was too late. (Well, it’s more complicated than that: Kodak actually invented the digital camera — but then buried it!) Why did DEC (Digital Equipment Corporation) fail? DEC virtually invented the mini-computer market. But, DEC didn’t see the personal computer coming — until it was too late.

It goes on and on:

• "Digital is the main reason why just over half of the names of companies on the Fortune 500 have disappeared since the year 2000."
• In 2003, Apple came out with iTunes Music Store and disrupted the music CD business. Why buy a whole CD when all you want is one track? And, adding the music stored on a physical CD to your iPod was a chore; downloading a track or all the tracks to your iPod was a snap. But wait — the disrupter is now the disrupted! Spotify disrupted Apple!  Owning music bits is... is… so 2013: just stream it — what you like, when you like, where you like. Yes, Apple now has a streaming service — but Apple is playing catch up.
• Uber has essentially done in the taxi industry and Airbnb is major burr in the sides of the hotel industry and the travel industry.
• And, how about the less glamorous, more prosaic "packaging industry:"
  • "Digital print continues to disrupt the packaging industry"
  • "How 3D Printing Is Disrupting the Packaging Industry"

Now re-read the quotes at the beginning of blog post and reflect on industry spending $1.7 TRILLION in 2018 alone on digital transformation. OMG.

The terms "automate/informate" have fallen out of use while "disruption" is going strong. We (CN &ES) actually like the automate vs informate distinction since that distinction helps us under the SAMR model of educational change — a model we will return to in Part 2 of this extended blog.

Plain and simple: technology — and its automating/informating/disrupting events — have driven, are driving, and will continue to drive human efforts worldwide. That is the thesis of an amazing book that we reviewed in an earlier blogpost written by two MIT professors, Erik Brynjolfsson and Andrew McAfee, entitled "The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies."

Ok, so, where is K-12 with respect to its integration of digital technology? Where is K-12 with respect to technology’s automating/informating/disrupting? In Part 2 of this blogpost, we will explore the digital transformation of K-12. Stay tuned, sports fans!