How does it come that „digital transformation“ is such a hot topic nowadays although digital technologies are present in the mainstream since years? …because the gap widens over time, the gap between the exponential development of technologies and the linear development of companies.
What is exponential growth?
In general terms - we all know the answer, latest since the Covid-19 pandemic. When speaking about digital technologies, exponential development is related to the core aspects of digital information management - processing, communication and storage capacity - that are commonly described by Moore‘s, Butter‘s and Kryder‘s law. These laws describe the technological foundation of today‘s digital transformation, the exponential increase of processing power, communication bandwidth and storage capacity.
How does technology’s exponential development relate to the linear thinking of human beings?
In short, technology develops exponentially and this clashes with the human mind that is used to see and understand linear developments. The implication is that human beings / companies underestimate the impact of digital technologies and consequently companies develop linearly. In contrast, technologies evolve exponentially which results in a gap between the company‘s actual value delivery and what would be possible technology-wise. And this gap keeps growing and widens over time.
How can the gap be overcome?
By investing in dedicated resources (internal and/or via collaborations with start-ups or technology providers) that follow emerging trends, screen the technology market, execute pilots and ultimately implement technologies that deliver value to the business.