The Networked Business

I read a lot about the “digital transformation”.

What I see is often the writer presumes everyone is born knowing what digital transformation means. However, in my experience very few people grasp the idea behind this phrase, especially in the context of the Business World.

One of my goals for the Payables Guy is helping the Payables Community understand the idea behind the digital transformation. More importantly, I want to provide practical examples that illustrate the power the digital transformation delivers to the Payables Community. The “Networked Business” is one such example shared by visionaries in Payables Community.

What Exactly Is the Digital Transformation?

Since the introduction of computers and the information age, we have been exposed to ever more digital experiences. The word digital simply refers to how computers store and process information: binary values of either zero or one.

Over the decades these experiences have grown in both in the number of ways they impact us as well as in how well they hide the underlying technology so that people with little or no technical background can use them. The result is much of modern life relies upon these digital experiences.

So, one way to think of the digital transformation is exactly this – the extent digital experiences have become imbedded in modern life.

We have seen the digital transformation the most in the Consumer World. Perhaps the most stunning examples are the combinations of these digital experiences:

• Social Media
• Mobile Devices
• Cloud
• Data Analysis

Each of the digital experiences have been around for decades. It’s the combination of these experiences that illustrate the power of the digital transformation.

Let’s Go See a Movie

Let’s consider the digital transformation impact on the way that many people decide something as simple as going to the movies.

For many the process begins with their mobile device – more specifically, opening an application on their smartphone. Often the first type of application is a “recommender”; in this case a movie recommender such as the Internet Movie Database. Recommender applications use data analytics to arrive at suggestions based on the combination of this person’s past behavior, preferences, and activities with movie information, attributes, and descriptions.

From the recommendation application someone might open a social media application such as Rotten Tomatoes where they see the ratings from both movie critics as well as movie goers. Social media applications can provide powerful, real-time aggregation of the people’s experiences that is not practical using a traditional, non-digital approach such as printed movie reviews.

From the social media application someone might open a show time application such as Flixster to learn where the movie is playing and when. Lastly, they may open an online ticket service such as Fandango to purchase a ticket to the movie. Fandango uses a Cloud technology called “web services” that combine information and functions from multiple applications such as Rotten Tomatoes and Flixster to deliver a very specific result – a purchase of a movie ticket that the consumer is very likely to enjoy!

Bringing Digital Transformation to the Business World

The vision of the Networked Business is bringing the digital transformation to the Business World in a way we have come to expect in the Consumer World. See, as consumers, many of us take for granted that multiple applications created by different publishers work together in concert to make our everyday lives better. There is a ways to go to arrive at a similar level of integration in the Business World.

Consider examples of how well applications such email, calendar, search, and map applications collaborate both on your smartphone and your desktop device. A couple years ago I learned exactly how much I take this for granted.

My family took a vacation to Italy where we decided to not connect our smartphones to the local cellular network. It can get expensive so, we left them home. The result is we lost the digital experiences we came to rely. We had to use traditional approaches. We had to carry paper and lots of it in the way of maps, diaries to record events, calendars to remember when to go to destinations, and books and brochures often with pages tagged with sticky notes for information. We had to make calls on a pay phone. Naturally, it worked, just with a lot more effort and in many cases with a poorer quality experience than would have been using the digital experiences we use when touring back home.

This story helped me realize that in many ways the Business World is like my family’s trip to Italy. Of course, business can collaborate without using digital transformation and it will work. But, if you measure the true cost of the digital versus non-digital processes using the Italy trip as an example, the money I saved by leaving our smartphones behind was eclipsed by the time and effort required to organize the events during the vacation.

The promise of the Networked Business is working with a lot less effort (and, associated cost) and with a much higher quality experience for all participants.

Working in the Payables Community provides the opportunity to witness a wide range of challenges organizations face in their financial operations. AP and AR are distinct functions, but companies often try and use the toolsets interchangeably or perhaps worse, view Accounting generically and invest in only wrenches thinking the same tool can be used by both sides.  To find your wrenches, let’s dig into the numbers >>>