Thursday, January 23, 2020

Vittorio Massone: the digital transformation has just started

Vittorio Massone’ effective and informed point of view on the state of digital transformation and the changes that need to be made to deal with it.

The challenge of the digital revolution will affect all sectors: this is a challenge that has just started and will have its full impact only in the next 20 years. In his recent editorial published in Lettera43, Vittorio Massone discusses the current situation and the changes that the Italian industry will necessarily have to make in order to remain competitive.
Vittorio Massone

Vittorio Massone: the digital revolution has just started

We now feel surrounded by a digitized world, made of technology and innovation. Currently supporting the digital transformation process of important traditional companies, Vittorio Massone proposes his point of view on the matter by means of an article published in Lettera43: we are only at the beginning of the real revolution. "Those who believe that digital technology has already brought about a great change in our lives will be surprised to know that what we are experiencing is only the beginning of a radical transformation in business and society" writes the expert. "The changes that have occurred in the past 20 years of the digital revolution will have their full impact in the next 20 years, and this will lead to an ICT-driven economy and society, in all sectors". As Vittorio Massone explains, the most evident changes have occurred in the consumer area so far, but the transformation is already starting to involve the areas of operations, supply chain, business to business and business to government. These sectors are slower in changing, but can have a profound impact across the economic field. The article published in Letter43 underlines that all sectors will be affected by the digital revolution: starting from financial services, insurance, IT, to later involving those sectors that are considered "mature" as logistics, agriculture, and industry. In order to prepare themselves for changes, companies must first adapt to changes in the business model, and then take into account new competitors. "The motto is 'your margin is my opportunity'. Competition will be made to acquire end customers, strategic assets, critical skills and so on".

Vittorio Massone's perspective on the Italian context

To remain competitive will not be an easy challenge to overcome in the new digitalized world, in particular with regards to aspects such as "cost structure, investments in R&D and technology, scale required to acquire and manage skills, patents, data, access to raw materials, strategic assets, and distribution channels: in other words, all future strategic and competitive factors". In his article, Vittorio Massone writes that making changes will play a fundamental role in remaining attractive in the capital market, and the situation in Italy is not easy. "Within the unregulated sectors, very few Italian companies today have the scale necessary to play a leading role in the next 20 years". It will be essential to focus on product innovation and improve the customer experience in order to remain competitive. In addition, cost-to-serve will have to be reduced. There will be a strong change in corporate roles too, as attention will be focused on those professional figures who are in direct contact with the customer and on those who are related to innovation and technology. The manager's role will be changed as well, as it is still too rigid within a system which, on the contrary, will be based on fluidity. Another key factor is machine learning, which will change the way talent is viewed. There will be a different approach towards team-working, division of labor, compensation, and evaluation of results. "There is no doubt", writes Vittorio Massone, "that all the changes considered will challenge traditional and vertically rigid organizational models. Company boundaries themselves will have a different shape, through an integration process between the company and the ecosystem in which it operates".

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