Don't dismiss it as just the latest IT craze. Every enterprise is now a digital business -- or must become one fast. The future of your company and organization (and career) is on the line.
What is digital business? It's a movement, rooted in customer-focused analytics, mobile computing and social networking, that stands to turn every company and industry on its ear. Ask the top executives at Best Buy, Blockbuster, Sears, Time Warner, Liberty Travel and the U.S. Postal Service whether digital business disruption and transformation are real. What doesn't kill you will make you stronger? This is a case of what doesn't make you stronger will kill you.
I can tell you this: The most astute CIOs -- and InformationWeek recently met with half a dozen of them from our advisory board -- are looking out a year, three years, five years to try to figure out their greatest digital opportunities and vulnerabilities. This is the proverbial thing that's keeping them up at night.
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Some companies and industries will be slower to the draw than others. Some will remain in denial.
Colleges and universities come to mind on the denial side. The entrenched thinking: Digital tools will augment what we do, but it's pretty much higher education as usual.
It's not. The disruption will go far deeper, down to their core business and profit models. Consider Georgia Tech's announcement in May that it will use massive open online course (MOOC) software to offer an online master's degree in computer science -- the first such full-credit degree from a major university -- for about a fifth the price of a typical on-campus degree. Other mainstream colleges and universities better be paying attention.
Or consider manufacturing. The likes of John Deere and Ford don't just make complex machines. In many respects, they're already software companies. Software on some Deere farm and construction vehicles, for instance, lets dealers do remote wireless monitoring and upload fixes and upgrades. Ford has built an Android app ecosystem around its vehicles, is continually upgrading its MyFord Touch in-dash driver interface (just as a software company would), and is investing in new software techniques to speed automotive prototyping. Ford opened a Silicon Valley software development/innovation center last year. (So have General Electric, Wal-Mart and Target. General Motors has set up four development centers over the past year, in Austin, Texas, and outside Detroit, Phoenix and Atlanta.)
Healthcare providers are still only as strong as their gifted clinicians, but the modern healthcare organization and clinician had better come digitally armed. An industry leader is University of Pittsburgh Medical Center, which under a five-year, $100 million partnership with Oracle and IBM is building a comprehensive data warehouse that aggregates clinical, financial, administrative, genomic and other information from more than 200 sources across its hospitals, medical practices, health plan and affiliated groups. The goal is to help doctors identify patients at risk for certain diseases based on subtle changes in their lab results, and establish the most effective treatment plans based on a patient's genetic and clinical data.
Just Another Bubble?
Even as sweeping investments come to an industry near you, critics look at the soaring venture capital funding for digital startups and dismiss the movement as yet another tech bubble. In higher ed, for example, digital vendors received a total of $1.1 billion in 2012 from VCs, angel investors, companies and private equity shops, according to CB Insights. One of the largest investment recipients last year was Desire2Learn, maker of an online learning management system, which received $80 million. MOOC software vendors Coursera and Udacity each reportedly received about $23 million in investments in the last 18 months.
Funding for digital health vendors increased 12% in the first half compared with a year ago, to $849 million, while the number of deals rose 25%, according to health IT incubator RockHealth. Among the hottest areas: patient monitoring, where startups received $102 million in 12 deals; hospital administrative software, $79 million in eight deals; analytics/big data, $78 million in seven deals; health record systems, $69 million in eight deals; and mobile apps, $62 million in six deals.