Information Technology (IT) has long been disrupting businesses. But the pandemic has forced companies to undergo digital transformation much faster. Before we get into it, let us get on the same page first when it comes to understanding what IT is all about.
What is IT?
One of the best definitions I saw about IT is from this source which defines Information Technology as “the use of any computers, storage, networking and other physical devices, infrastructure and processes to create, process, store, secure and exchange all forms of electronic data.”
Simply put, IT is anything that deals with electronic data.
I love it when we can simplify complex ideas. There are other definitions that can be found online. However, I have always preferred the simpler and more practical ones. Now that we know what IT means, this may lead us to a familiar question…
What is the difference between Technology vs Information Technology?
Given its name, we can safely establish that Information Technology is a subset of Technology. This means anything IT is considered part of Technology, but not all Technology is considered IT. Think back to your Algebra or Logic classes where they teach you concepts like “if A is a subset of B, then all A is B, but not all B is A.” The same logic (pun unintended) applies.
Using our definition of IT, we can simplify classify or separate any machine that does not deal with electronic data vs machines that do. The former are examples of Technology but not examples of IT.
I often ask my students to give examples of Technology vs examples of Information Technology. It is a fun brain exercise. I believe that the best way to improve your mastery of an idea is to practice giving your own examples of it.
What are examples of IT?
Common examples of IT include laptops, PCs, and mobile phones among others.
Some interesting examples may include: cash registers, smartwatches, and TVs.
Can you think of more interesting examples?
Now that we have a very good grasp of what IT is, let us now look into how exactly Information Technology is disrupting businesses. IT has been able to disrupt businesses because of Digital Transformation (DT)
What is Digital Transformation?
To have a better understanding of DT, I want you to imagine a world without IT. In this world, cashiers record your orders by writing it down a piece of paper and manually compute for your bill. Accounting exams are handwritten in paper (oops). Presentations are done using chalkboards, corkboards, illustration boards, and/or big yellow Manila papers. Classes are conducted face-to-face (too soon?)
The same picture can be applied in businesses. A business world without IT is a whole lot of handwriting. Purchase orders and delivery receipts are all handwritten. Inventory is manually tracked. Employee attendance is recorded with index cards.
All examples above deal with analog data. Digital Transformation is about transforming data from analog to digital – the way we capture, store, process, and present data.
Companies which undergo DT often see faster processing of data with the help of IT machines and the automation they bring. It is much faster punching one button in the cashier register than handwriting the words, “one cup of fried rice and 4 pieces of steamed siomai.” Purchase orders and delivery receipts are all automated with tags and scanners. Inventory is tracked digitally.
For a student’s perspective, it is definitely easier to do accounting exams with laptops and spreadsheets than with pen and paper. Presentations are more dynamic with the use of visual design applications. And online classes…keep students safe from the pandemic.
To better appreciate the scope of Digital Transformation, this Forbes article talks about the Three Faces of Digital Transformation: The Customer Experience, Employee Productivity, and Transforming Compliance.
What we can get from this is that not all Digital Transformation are necessarily seen by customers. The most common examples of DT we can think of are all probably customer-facing. Think electronic kiosks of McDonalds or e-wallet payment options in retail stores. However, there are a lot of other ways companies can undergo DT. Other examples of DT are behind the scenes but help in improving employee productivity and/or complying with government laws and industry policies.
How does IT and DT Disrupt Businesses?
With the pace of technological advancements, it is easy to think of examples of companies who have undergone Digital Transformation. We see it in our everyday lives. Retail stores are adding digital payment channels. Cinemas and restaurants are upgrading from analog posters to digital boards. All of a sudden, businesses who undergo DT faster, and do it right, gain a competitive edge vs their competitors. However, the impact of DT is not contained within businesses. Digital Transformation is disrupting industries.
Can you remember the last time you rode a taxi? How about the last time you held a newspaper or magazine? When did you last listen to a CD album?
Digital Transformation has forced industries to adapt or be obsolete.
The emergence of on-demand ride-sharing apps like Grab and Uber has crushed the taxi industry. The rise of the internet and social media has forced newspaper and magazine industries to shift from print to digital. The music industry is now mostly distributed through Youtube or Spotify. Nobody buys CD albums anymore. Heck even musicians prefer recording singles now over albums.
IT and DT created a compounding effect to pace of technological advancement of our everyday living. Companies are forced to upgrade their processes and move away from analog (I wonder when in the future will people forget the skill of handwriting?) The slower you transform from analog to digital as a company, the worse it is for you and the better it is for your competition. The pandemic has accelerated DT. It forced most businesses to use online channels via e-commerce platforms and online deliveries and shut down their traditional brick and mortar stores. Malls are freaking empty these days. Mom-and-pop stores used to be found at every corner and every turn. Now, most small businesses are done from the comfort of homes. Retail stores are now being replaced by live selling via social media.
Nowadays, with how IT and Digital Transformation are disrupting businesses, companies are forced to innovate, adapt, or die.
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