Page 137 - SAMENA Trends - June-August 2021

ARTICLE SAMENA TRENDS

It would be impossible to look at all of Many firms are doing digital versus being Impact on society and policy making
these layers and technologies in detail digital, that is, they use technology to fix Whilst the adoption of digital technologies
here – something I have done so in my isolated problems rather than as part of an has the potential to have profound
book Digital Disruption. 3 overall business strategy. Simply investing changes to the competitor landscape
in digital technologies to digitalize existing and on consumers, it equally has the
Re-defining the business model functions and processes is not enough. potential for profound impact on societies
Seven out of ten most valuable public Digital firms think differently in another and economies, some which we may not
companies in the world by market critical way. They realize that the concept necessarily desire. To turn these disruptive
capitalization are digital platforms. These of the vertically integrated enterprise going technologies into a force for good may
are Apple, Microsoft, Amazon, Alphabet, it alone is antiquated. In many ways, whilst require us tearing up existing government
Facebook, Tencent Holdings and Alibaba most firms are not platforms, they need to policies and regulatory approaches that
Group. So why are digital enabled start thinking like platform players – and have served us reasonably well to date.
businesses growing so rapidly and being move beyond looking at sectors and to the However the very nature of these digital
valued at such rates? Traditional corporate wider ecosystem. technologies means that jurisdictional
leaders typically face a set of challenges national boundaries are dissolving, their
to grow and expand usually as a result Re-orchestrating the operating model reach is global, their adoption pervasive
of constraints placed by their operating Operating models deliver the value and the way they work not always
model. Digital businesses dissolve these promised to customers. Ultimately the transparent or predictable.
intrinsic limits of scalability and scope. goal of an operating model is to deliver
Their operating models are designed to value at scale, to achieve sufficient scope The rapid scale of change that is enabled
scale at rates that traditional firms just and to respond to changes. In traditional by digitization is already impacting large
cannot fathom. firms, the intrinsic scalability and swathes of society. The way people interact
economies of scope that could be derived with their friends and colleagues, the way
Many firms are doing from technology is limited by the operating people get their news or the way society
digital versus being digital, architecture of the firm that it was deployed buys goods and services has profoundly
changed in the last decade. As a society
in. But digitally enabled firms are designed
that is, they use technology and architected to release the full potential we are giving access to our personal data
to fix isolated problems of digital networks, data algorithms and – what we like, who we like, where we go
and what watch we watch online - some
AI. The more a firm is designed for scale
rather than as part of an and scope in its operating model, the without us even noticing. The very fabric of
overall business strategy. more value it can create and capture. trade is changing – sometimes we are not

Simply investing in digital The problem of increasing complexity transacting with fiat money but through
is managed through software and
the intrinsic value of our personal data.
technologies to digitalize analytics, rather than hiring more layers The nature of competition is changing
existing functions and of managers. However, a key challenge in primarily through greater automation and
new ecosystems. This is already starting
driving digital transformation is that the
processes is not enough. whole organization is optimized for the to impact employment patterns and the
current business model. Fundamentally, wages people earn.
In traditional firms, value creation and the organization itself prohibits breakout
capture is typically created and captured from the old model. To transform the These are just some of the societal
from the same source, i.e. through sales organization, requires a break out from the impacts of digitization. This is however
of goods and services through the price old model, old people, old metrics and old just the start – the impact of digitization
mechanisms. In digital businesses, the investment profiles. Digital transformation is going to be much wider and deeper. It
sources and options for value creation is not just about bringing cross-functional will require major policy responses – some
and capture are broader because value teams and IT systems together, but also of which may need us to have a wholesale
creation and capture can be separated about bringing cross-functional data rethink about what we value as a society –
more easily and often come from different together. some of which will need to be coordinated
stakeholders through modular design. globally.

About the Author:
Dr. Vagadia is Group Head of Regulatory Affairs at Ooredoo Group, Board Director at Ooredoo Myanmar, Chairs the GSMA APAC Policy
Group, and is the author of four books, the latest titled Digital Disruption. Prior to joining Ooredoo, he spent 15 years as a management
consultant advising governments, regulators, multinationals as well as start-ups in over 20 countries. He holds a PhD, MBA, LLM,
B-Eng and has qualifications in marketing and governance from the UK. He is an advisor at HEC Paris in Qatar.

3 Digital Disruption: Implications and opportunities for Economies, Society, Policy Makers and Business Leaders. (2020). Vagadia, B. See: https://www.
springer.com/gp/book/9783030544935
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