Gary Audin
Gary Audin is the President of Delphi, Inc. He has more than 40 years of computer, communications and security...
Read Full Bio >>

Gary Audin | March 03, 2017 |


Have You Embraced Digitalization?

Have You Embraced Digitalization? By reducing economic friction, digitalization fosters competition that puts pressures on revenue and profit growth.

By reducing economic friction, digitalization fosters competition that puts pressures on revenue and profit growth.

Digitalization, or digital transformation, is one of the top enterprise trends being discussed today, but according to recent research from McKinsey & Company, "the forces of digital have yet to become fully mainstream."

An article detailing the research, "The Case for Digital Reinvention," provides a snapshot of 10 industries and the state of digitalization within each. On average, the article states, industries are less than 40% digitalized, "despite the relatively deep penetration of these technologies in media, retail, and high tech." This blog will focus on data from the McKinsey report and explore what ROI enterprises are seeing as they invest in digital transformation initiatives.

Where Are You?
Digitalization has begun to transform many businesses and industries. Digitalization's influence and impact on an organization's economic performance has delivered positive results, but the transformation is not nearly complete. Some industries that report digitalization success over 50% penetration are healthcare systems and services (51%), high tech (54%), and retail (55%). Media and entertainment lead with 62%.

If you are in telecom (44%), professional services (42%), financial services (39%), automotive (32%), or consumer packaged goods (31%), there's more work to be done. The McKinsey article confirms that by reducing economic friction, digitalization fosters competition that puts pressures on revenue and profit growth.



Positive ROI Not Guaranteed

Executives need to determine how they will monitor the ROI of digital investments. McKinsey discovered that the results are not the same for every organization. Some participants in each industry are earning significant returns, while others in the same industries are experiencing returns below the cost of their digital capital investment. There will always be organizations in any industry that out performs their competition, as is demonstrated in the chart below displaying the wide range of ROI accomplishments.


This also leads to the conclusion that some organizations are investing in the wrong areas or investing the wrong amount (too much or too little) in the right ones. It's also possible that the competition has negated the investments through better digital investments.

Where to Invest
Digital technologies have expanded the available number of investment options. The McKinsey report investigated five dimensions of digitization's penetration into industries: products and services, marketing and distribution channels, business processes, supply chains, and new entrants acting in ecosystems. In investigating these, it noted that there appears to be mismatches between opportunities and investments.

The investments and the ROI produced can be negated by the infrastructure used to support the digital business. Even if you have no direct responsibility for the digital investment, the infrastructure used can seriously impact the digital investment success.

Focus on Business Continuity
If the infrastructure does not work, there is no ROI. The goals for your infrastructure are resiliency, agility, adaptability, robustness, and business continuity. The concept behind business continuity is to provide alternative ways to continue the business, to avoid interruptions, or restore service rapidly. So you need to take a look at those elements that could fail easily and interrupt your digital services.

While any component can malfunction during system operation, there are three candidates that typically cause most failures. These are in order of most likely to least likely:

  • Disk drives -- These types of mechanical systems tend to malfunction as a result of becoming "worn out."
  • Power supplies --These electrical components tend to age and are often prone to heat-induced failures.
  • Memory -- An electrical component that can sometimes be forgotten, a single memory error can remove the unit's entire memory from operation.

You can warehouse these components and replace them as needed, but this will cause an outage. You could also implement fault tolerant configurations that can be switched from a failed to live component without interruption. In fault tolerant configuration, the use of "dual" components can help minimize and mitigate the failure of standalone components. The common condition that causes the most failures across all three components is fluctuation in the electrical power used to run the hardware. Surge protectors can help forestall the fluctuation issue, but isolating the hardware through the use of an Uninterruptible Power System (UPS) is usually the best solution.

The same fault tolerant configurations can be applied to the network connections. You should connect to two different providers over different physical paths. If voice is a major component of your digitization implementation, then you should have fault-tolerant dual session border controllers (SBCs). If you have SBCs properly configured, they can be used to create the fault-tolerant provider connections. The SBCs can mirror each other, send each other "keep alive messages," and switch uninterrupted from one SBC to the other.

(For more on the topic of resiliency, see related blogs, "How to Approach Resiliency Planning," and "Verifying Resilience.")

Focus on Security
The second problem area to focus on is a data breach. Malware can be inserted in your endpoints, network devices, or servers, and can go undetected for months. The end result is that once the malware is detected and the business notifies its consumers and internal operations, there is a loss of reputation and a hesitancy to use the digitized service. Interruptions and poor performance for the service can defeat your digital implementation.

Ransomware can prevent access to your information, which will keep you from continuing services. This is a form of failure that is worse than having a component failure or a network connection failure. There is a period of time when you don't have access to your information. Paying the ransom may return access to your information, but as a cost to your business.

Your digital projects will be on hold and by the time that you fix the ransomware you may have lost all the benefits of your digital projects. Ransomware is most likely the product of poor user security behavior. To keep security problems at a minimum, how you train for user security is important (see "IT Security: Training and Beyond").


September 26, 2018

Join Kevin Kieller, Microsoft UC&C expert, along with Ribbon Communications and Polycom, for an update on Microsoft Ignite, and a focus on critical things you need to know about your voice deployme

August 29, 2018

Moving your voice services to the cloud introduces new challenges for 9-1-1 services. These include the need to serve multiple locations, and the increased mobility that comes with having a phone t

August 8, 2018

Artificial intelligence (AI) is becoming a reality for your contact center. But to turn the promise of AI into practical reality, there are a couple of prerequisites: Moving to the cloud and integr

March 12, 2018
An effective E-911 implementation doesn't just happen; it takes a solid strategy. Tune in for tips from IT expert Irwin Lazar, of Nemertes Research.
March 9, 2018
IT consultant Steve Leaden lays out the whys and how-tos of getting the green light for your convergence strategy.
March 7, 2018
In advance of his speech tech tutorial at EC18, communications analyst Jon Arnold explores what voice means in a post-PBX world.
February 28, 2018
Voice engagement isn't about a simple phone call any longer, but rather a conversational experience that crosses from one channel to the next, as Daniel Hong, a VP and research director with Forrester....
February 16, 2018
What trends and technologies should you be up on for your contact center? Sheila McGee-Smith, Contact Center & Customer Experience track chair for Enterprise Connect 2018, gives us the lowdown.
February 9, 2018
Melanie Turek, VP of connected work research at Frost & Sullivan, walks us through key components -- and sticking points -- of customer-oriented digital transformation projects.
February 2, 2018
UC consultant Marty Parker has crunched lots of numbers evaluating UC options; tune in for what he's learned and tips for your own analysis.
January 26, 2018
Don't miss out on the fun! Organizer Alan Quayle shares details of his pre-Enterprise Connect hackathon, TADHack-mini '18, showcasing programmable communications.
December 20, 2017
Kevin Kieller, partner with enableUC, provides advice on how to move forward with your Skype for Business and Teams deployments.
December 20, 2017
Zeus Kerravala, principal analyst with ZK Research, shares his perspective on artificial intelligence and the future of team collaboration.
December 20, 2017
Delanda Coleman, Microsoft senior marketing manager, explains the Teams vision and shares use case examples.
November 30, 2017
With a ruling on the FCC's proposed order to dismantle the Open Internet Order expected this month, communications technology attorney Martha Buyer walks us through what's at stake.
October 23, 2017
Wondering which Office 365 collaboration tool to use when? Get quick pointers from CBT Nuggets instructor Simona Millham.
September 22, 2017
In this podcast, we explore the future of work with Robert Brown, AVP of the Cognizant Center for the Future of Work, who helps us answer the question, "What do we do when machines do everything?"
September 8, 2017
Greg Collins, a technology analyst and strategist with Exact Ventures, delivers a status report on 5G implementation plans and tells enterprises why they shouldn't wait to move ahead on potential use ....
August 25, 2017
Find out what business considerations are driving the SIP trunking market today, and learn a bit about how satisfied enterprises are with their providers. We talk with John Malone, president of The Ea....
August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.