Digital transformation, climate change and renewable challenges

Over the past decades, the exponential growth of digital technologies has generated many changes and interesting opportunities for companies globally. It is estimated that nearly five billion people globally are using computer devices daily. However, unfortunately all these digital technologies have not yet been translated into significant productivity gains for many companies and improved their performances. The key hurdles seemed to be that many companies have not been changing their processes to allow the digital technologies to reach its full potential. In addition, their cybersecurity systems have not been robust and strong enough to defend against frequent digital attacks.

It is important to recognise the fact that adopting advanced digital technologies alone would not normally bring about real digital transformations in companies by themselves. Many management teams have been adopting digital transformation with no clear coherent overall strategy plus have not carefully consider the cybersecurity risks and the threats from climate change. Different business divisions in companies have often been allowed to adopt their own pet digital application or analytics tools, with little linkages with other business divisions. All these shortcomings have resulted in companies falling short of their digital transformation goals. The wrong focus was typically put on how applying advanced digital or IT technologies could change the business quickly. Instead, they should be refocusing on how the enterprise should change its business organisation and processes so as to fully embrace the full potentials of digital transformation and innovative technologies in light of the climate change and clean renewable energy transformation implications.

Management globally should recognise that the true digital transformation for companies would require more than just a technology-based approach. Companies would have to reform and improve their management organisations,

Renewable digital transformation & management 161 processes and systems. They should maintain strong focuses on the desired corporate digital transformation management objectives and not just on importing new digital technologies and infrastructures. In addition, they would have to take into account the serious rising climate change risks and increasing fossil to clean renewable energy transformation requirements into their corporate strategy and business planning so that they can develop the appropriate digital and cyber strategies to support renewable growth and sustainable business performances.

The deep digital transformation of companies should start with the appropriate management process reforms and innovative organisation transformations taking into account the requirements of digital transformation, cybersecurity and climate change. One good digital business example is that companies will have to implement the appropriate digital reforms to embrace the new advanced real-time analytics together with predictive decision making involving the Internet of Things (IOT) and Big Data. These advanced digital technologies should help to generate better information and data analysis for different companies. However, companies arc not likely to get full benefits unless their management can transform their key business processes plus change the mindset of their staff to act quickly on this new digital information.

One key digital transformation area is in data process and decision making. Traditionally, many of the traditional data processes used by companies have required staff to move data from one corporate database to another. It could take even longer if these data have to cross many functional silos, which is normally the case in most companies. Then they will need to process the data and generate appropriate reports for management to review and to make appropriate decisions. New advanced in-memory computing digital technologies could significantly accelerate these processes and reduce the processing time greatly.

A good digital business example is the High-Speed Analytical Appliance (HANA) digital technology, which uses advanced digital data compression to store data in the random access memory of computers. HANA’s performance is 10,000 times faster compared to standard computer disks. These advanced digital technologies should allow companies to analyse their important data in a matter of seconds instead of hours before. These should help company management to have quicker and more accurate pictures of how their businesses arc doing which should better support management to make the appropriate decisions quicker, taking into account varying needs of the business, climate change, etc.

These advanced digital technologies should help to significantly improve and accelerate data processing and analysis in companies. These should then support management to have faster agile decision making and take appropriate actions to improve business performances. However no matter how fast the analysis would be, the real benefits could only be realised by having appropriate corporate processes for management reviews and decisions so as to fully realise the benefits of improved insights generated by advanced digital technologies. Corporate management should consider appropriate reorganisations of its back office and front office functions and processes so that they would be able to utilise new digitaltechnologies and systems to produce the improved management information and business reports to aid executive decisions. Management should also eliminate legacy systems and traditional databases so as to reduce the traditional barriers to achieve the full benefits of digital transformation with in-memory analytics. These would usually involve some tough painful organisational reforms plus staff redeployment or redundancy, which some management might be reluctant to make.

Global digital transformation experiences have shown that the ability for companies to modernise their core systems with advanced digital technologies, such as in-memory computing and innovative new digital applications, could be highly beneficial for companies globally. These should help to improve business productivities and efficiencies significantly. However, it is very important that the corporate management should be committed to eliminating traditional legacy systems and processes plus take into considerations the requirements of climate change and the business. These reforms are important in order to integrate new digital reforms and technologies into the overall business architecture. These would help to support digital transformation and deliver the real business improvements to companies globally.

In many companies, there are different serious management and organisational challenges to digital transformation and cybersecurity, such as adherence to pet legacy systems and processes. In many cases, they have also not fully taken into account the climate change and global warming risks. These would impede the ability of companies to enjoy the full benefits of digital transformation and innovative technologies. Management would have to tackle these major hurdles effectively so that they can embrace digital transformation and maximise the value gains.

One of the most serious organisation hurdles is the organisational resistance to changes. Management should recognise that the majority of staff will normally have big concerns about changes and uncertainties which could challenge their roles or reduce their job security. Digital transformation, by its very nature, could change a lot of job roles and could also reduce some job securities. The resistance to changes could manifest itself in a myriad of ways in companies. These could include digital projects taking a long time to develop and implement. They could also be delayed by inadequate expertise and resource availabilities. There could also be different technical, commercial and legal review requirements in companies which could slow down the digital transformation.

One of the most famous digital transformation business resistance and failure case example is Kodak, the photography company. Its corporate research staff had actually invented the new digital camera technology whilst the company was having a very successful photography film manufacturing and processing business. The Kodak internal corporate resistance to the new digital change was very huge. Many of the Kodak management and staff were concerned about the potential threats of the new digital photography to Kodak’s legacy film business profits. These concerns resulted in Kodak not developing its new digital technology to maximise its full values. This strategically wrong

Renewable digital transformation & management 163 decision eventually led to the serious declines in the Kodak film business and final demise of the company.

However, there have been some successful business digital transformation cases. One of the most interesting digital transformation business success case example is the successful transformation of Bell Atlantic into Verizon. The Bell management realised that the future of landlines was looking bleak with digital advances in broadbands and mobile technologies. It was able to overcome internal resistances and eliminated legacy systems. These bold transformations enabled Verizon to become a leading digital business in broadband, wireless and cable television industries. These good strategic decisions enabled Bell Atlantic to continue its business successes on a sustainable basis in light of the digital and climate change impacts. Their management succeeded by accepting digital advances and made the difficult organisational decisions required to adapt to the new digital transformation requirements.

Another major risk to digital transformation is the lack of a clear corporate vision for a digital customer journey. Companies would usually only succeed in creating a digital customer value proposition by developing a clear vision of how they would actively consider and meet their customers’ changing digital needs. They would also need to set clear objectives and strategies to achieve their digital vision. Then the management would have to be committed to executing its digital transformation strategies, which could take a long period over multiple years.

To develop a clear digital transformation strategy, management would have to take stock of its assets, brand, customer base, intellectual property plus strengths and talents of staff together with the cyber and climate change risks. It must also study its market to really understand its customers’ needs and aspirations. It has to understand the emerging technologies, innovations plus shifts in consumer behaviour and technology. Then it should establish the appropriate processes to support the digital transformation and meet the new future customer needs. Its new processes should be aligned to its digital visions in light of the cyber and climate change impacts. It should also try to continuously transform in future to match new learnings and new technology developments.

Ineffective gathering and leveraging of customer and climate change data could represent major risks for successful digital transformations. Many organisations have a myriad of legacy siloed data systems in different business divisions. They also have no effective ways to pull the business data together to generate really meaningful management reports. To overcome these hurdles, companies should first determine their key customer attributes and matrices. Then companies should try to eliminate legacy systems with new systems so they can serve and sell to their customers more effectively. They have also to understand the climate change risks to their business and develop appropriate climate strategies, scenarios and risk mitigation strategies to handle the climate risks.

Inflexible technology legacy portfolios and rigid development processes have been some of the biggest hurdles to successful digital transformation. Many companies have technology development processes involving inflexible cycles such as quarterly release cycles. Companies have to improve these legacy systemswith new agile processes and technologies that would support continuous developments and frequent new product releases to meet the fast-changing customer requirements. This is particularly important for companies in the clean renewable energy sector with the fast pace of technological innovations and manufacturing developments.