The primary goal of Cisco Digital Network Architecture (Cisco DNA) is to accelerate the digital transformation of customers’ businesses. Therefore, before diving into the technologies within this architecture, it’s important to understand the business opportunities and challenges that customers are facing, thus setting relevant context for how Cisco DNA addresses these.
This chapter introduces and discusses the following:
The opportunities and threats presented by digital transformation
How digital technologies have transformed entire industries
Case-study examples of how digital technologies are transforming key areas of business, including:
Customer experiences
Employee experiences
Operations
Digital transformation and the Internet of Things (IoT)
Opportunities and Threats
Transform or die. It’s really that simple when it comes to digital business. Provide your customers new experiences, delivering them greater value, personalization, convenience and satisfaction—or your competition will. Enable your employees new workplace experiences, empowering them to collaborate effectively, and effortlessly, improving their overall productivity and job satisfaction—or your opposition will. Leverage technology to reduce costs, make informed data-driven decisions, and reallocate resources from operation to innovation—or your rivals will.
Does that sound a bit dramatic? Not according to a 2015 study1 of 941 companies around the world in 12 different industries done by the Global Center for Digital Business Transformation, which highlighted that roughly 40 percent of today’s top ten incumbents (in terms of market share) in each industry will be displaced by digital disruption within the next five years. Furthermore, the same study showed that 43 percent of companies either do not acknowledge the risk of digital disruption or have not addressed it sufficiently, with nearly a third adopting a “wait and see” attitude. The industries most under threat of digital disruption are shown in Figure 1-1.
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Figure 1-1 Threat of Digital Disruption by Industry (Image Credit: Global Center for Digital Business Transformation, an IMD and Cisco Initiative https://www.imd.org/dbt/digital-business-transformation/)
In contrast, companies that have mastered digital technology transformations have outperformed their industry peers by 9 percent in revenue generation and 26 percent in profitability, according to the Harvard Business Review Press book Leading Digital.
How real is digital transformation? To answer this, let’s consider some examples of entire industries that were either significantly disrupted or completely transformed by various forms of digitalization.