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Many people mistakenly believe that digital transformation is simply the introduction of modern technologies into an existing business model, for example, creating a mobile app, moving to Cloud services, etc. But according to international digital transformation and fintech expert Chris Skinner, digital transformation has nothing to do with technology; digital transformation is what's in one's head and heart.
"Actually, the digital transformation starts with whether you understand the essence of this phenomenon and whether it is in your blood, in your DNA," he says in an interview with NEWS.am Tech. "The world is changing very quickly, and we have to keep up with those changes. Many traditional institutions, however, struggle to keep up; it's not just about financial institutions, but also those engaged in retail, manufacturing, and other industries. They persistently introduce new technologies and think that this is ‘doing digital.’ But in reality, ‘doing digital’ is the transformation of the entire business. And the transformation process is much more complex than just building a mobile app."
Skinner says he sometimes asks fintech companies’ executives if they can tell the difference between artificial intelligence and machine learning, or the difference between blockchain and DLT (distributed ledger technology).
"Of course, it can be said that these differences are extremely technical. But if the leader is able to answer this question, it means that digital technology is really in his DNA, he studied this question, he really wanted to understand what it is," he says.
In his opinion, understanding the essence of digital transformation is really very important, and real transformation will not happen if the business manager just decides that something needs to be changed and delegates that job to some specialist.
The transformation of the country, in his opinion, should take place in the same way as the transformation of a company. The country's government and central bank must be ready for these transformations and create the necessary conditions for their implementation: assist fintech startups, conduct the right tax policy, and simplify investments. If all this is really done, then, according to the expert, a small country like Armenia will have all the opportunities to keep up with the times and keep up with global trends.
Does every business need a digital transformation?
There are business models that can remain non-digital, and that's perfectly normal. But, according to Maxim Mikhaylov, Director of Programs at Skolkovo Business School and co-founder of ICDT Global, it is important to understand that sooner or later digital transformation will affect everyone; even if it seems that we are talking about a business that at first glance has nothing in common with modern technology, one day more "digital" competitors may appear and destroy that business.
In an interview with NEWS.am Tech, Mikhaylov pointed to three types of companies that sooner or later can "kill" any business.
1) Disruptor companies that use digital technology to do the same thing as other non-digital businesses, but much cheaper and more efficiently. Such a role was played, for example, by WhatsApp, the emergence of which destroyed the SMS sending business of mobile operators.
2) Platforms like Uber, Yandex Taxi, etc. Their emergence considerably changed the business of transporting people and pushed many "regular" taxi services out of the market.
3) Companies that take the most valuable from a classic product and sell it to customers. For example, the “neo-banking” services have appeared in the banking sector. They do not have all the services provided by banks, and they provide only the most popular ones, for example, remittances, payments, etc.
Doing Digital: To be continued
Chris Skinner and Maxim Mikhaylov were among the speakers at the Doing Digital Forum held in Yerevan on Wednesday. The event, which was organized by SPRING PR in cooperation with Ameriabank, brought together more than 20 international and Armenian specialists in digital transformation and about 1,000 participants.
Among them were Martin Galstyan, Governor of the Central Bank off Armenia; Nerses Yeritsyan, Acting Director of the Information Systems Agency of Armenia; David Kincsem, a leading expert in banking and Leader of Enterprise Agility Center at McKinsey & Company; Elena Tofanyuk, First Deputy Editor-in-Chief of Forbes Russia; and many others.
Tatevik Simonyan, co-founder of SPRING PR company, told NEWS.am Tech that Doing Digital Forums are planned to be held every year, and several other interesting events, which are somehow related to digital technologies and digitization, are also expected during the year.
During this forum, there were several interesting speeches and two panel discussions on the future of fintech and the path of digital transformation. That's right, in this one according to Simonyan, the discussions turned into real debates.
"The participants did not agree with each other on many issues, they were arguing, as everyone has different opinions, different approaches, and that, in my opinion, is very important. It is also important that all participants agreed on one thing: digital transformation is not the future, it is already the present," she said.
According to Simonyan, the forum aroused great interest among both those on the stage and those sitting in the seats of the audience.
“Everyone who is interested in the topic of digital transformation and asked a lot of questions about it, I believe they left the forum with more questions, and that's good. Asking questions, answering them, finding new questions that need to be answered is very important," she added.
