The Technology Illusion E-Book

Patrick Naef

• Herausgeber: BoD - Books on Demand
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 164

Veröffentlichungsjahr: 2025

Beschreibung

The rules have changed. The digital revolution has ushered in an era of unprecedented disruption, and CIOs are now the key architects of the future. This book isn't a simple instruction manual; it's a guide to reimagining the role of the technology leader. How do we not just survive, but thrive in this new landscape? How can technology unlock entirely new business models? This thought-provoking exploration offers fresh perspectives, challenges the status quo, and provides inspiration from companies that are leading the way. Take control of your organisation's destiny through the power of Digital Transformation.

Leseprobe

Contents

About the author

Acknowledgements

Foreword

Introduction

1. Digitalisation vs. digital transformation

2. The four-stage model of digital transformation

3. The strategic role of IT

4. From a support function to the core of the company

5. Convergence of product technology, production technology, and process technology

6. The virtualisation of “things”

7. Open innovation

8. Every leader must be a digital leader, or: “Who needs a CDO?”

9. Shadow IT: A solution disguised as a problem

10. Shorter time-to-market cycles: Everything is becoming agile

11. Consumerisation of IT and BYOx: Control of IT procurement shifts to the users

12. Reversing the outsourcing craze: Back-sourcing, or: “How much IT should remain in-house?”

13. Technology as a topic for the board of directors

14. Networks instead of hierarchies

15. Quantum organisation: A new organisational paradigm for the network age

16. Data

17. Technologies

18. A few comments on personality

19. A summary by ChatGPT

20. A summary by NotebookLM (Gemini by Google)

A note on the author’s forthcoming book

Litterature index

“The machine does not isolate man from the great problems of nature but plunges him more deeply into them.”

ARTHUR C. CLARKE

"Science and technology revolutionize our lives, but memory, tradition and myth frame our response."

ANTOINE DE SAINT-EXUPÉRY

About the author

Patrick Naef is a partner at Acent AG and the founder and CEO of ITvisor GmbH, a boutique consulting firm specialised on advising organisations on their digitalisation journey. He is also a managing partner at Boyden Global Executive Search and a member of the board of directors at the Franke Group, a global industrial company headquartered in Switzerland. He is chairman of the board of directors at UpGreat AG and senior advisor in the Travel & Transportation practice of McKinsey & Co.

He also advises and supports several technology start-ups, serves on advisory boards of venture capital firms, lectures on digital transformation and business models in the digital age at universities in Europe and the United States.

From 2006 to 2018, Patrick Naef was the Chief Information Officer (CIO) of Emirates Airline & Group in Dubai. During this time, he was also a member of the board of directors at SITA, a global telecommunications and IT services company. From 2006 to 2014, he was CEO of Mercator, an Emirates Group subsidiary that provides IT products and services to airlines around the world. In the late 1990s, he was a founding member and CTO of the start-up Beyoo, the first European online travel portal. He previously served as CIO of Swissair and SIG Group and held senior positions at HP.

In 2011, he was recognised with the prestigious CIO of the Decade award by Germany’s CIO Magazin and IDG Inc. He holds a master’s degree in computer science from the Swiss Federal Institute of Technology Zurich (ETH), Switzerland and an executive MBA from the University of St. Gallen (HSG), Switzerland.

Acknowledgements

This book would not have been possible without the tireless support of many remarkable people to whom I would like to express my most heartfelt gratitude. I would like to thank Robby Wirth and ACENT AG for their invaluable assistance and steadfast commitment, which were crucial to the success of this book. I would also like to thank Dr. Olaf Röper and Claus-Peter Gutt for their unique expertise and timely advice, which greatly enriched the project. Carola Jacobs deserves special recognition for her consistent support and professional coordination of everyone involved in producing this book. Warmest thanks are also due to my beloved wife Marion Marten-Naef, who dealt so patiently with my typos and awkward wording. Sending my daughter Sophie to British schools also paid off when she kindly helped me with proper British spelling and grammar. I would also like to express my sincerest appreciation to Nina Seitz, Ute Hamelmann, and Talia McCune for creating the illustrations and graphics. The English edition of this book was developed in collaboration with Sean Lothrop.

Finally, I would like to thank the numerous colleagues, CIOs, CEOs, university professors, venture capitalists, and industry leaders with whom I have had countless discussions over the years on the subjects presented in this book—a perfect illustration of the potential of swarm intelligence. This work would not have come about without their collective contributions, trust, and encouragement. My sincere gratitude goes out to all of them.

Patrick Naef

Foreword

As part of our ACENT consultancy projects, I have seen many approaches to digital transformation. After initial experiments with digital subsidiaries and digitalisation strategies independent of company strategy, most digital initiatives today have a clear connection to core business. A digital focus is now typically embedded in the corporate strategy, and the duties of CDO and CIO are increasingly being combined into a single role. For much of the business world, the digital reality has arrived.

Nevertheless, companies do not always exploit their full digital potential, and many limit themselves to the digitalisation of business processes. This approach is not wrong, but it is fundamentally no different from what firms have done with information technology for decades. We have simply replaced the word “automation” with “digitalisation” while failing to recognize and leverage the possibilities offered by true digital transformation.

A comprehensive digital transformation requires a new way of thinking. It is not enough to digitalise existing processes. To survive in a highly competitive global marketplace, business models must be continually tested, redesigned, and upgraded to incorporate the latest digital technologies. Firms must design customer-centred solutions comprising physical and digital products, develop data-driven company processes, and integrate external digital services into existing products. For many firms, this is a journey into the unknown, and traditional industries in particular have very few practical, tested examples from which to draw lessons.

This book will serve as a valuable guide for firms seeking to maximize their digital potential. Patrick Naef is an experienced practitioner, who in his many years as CIO in various industries has successfully implemented numerous digitalisation and transformation projects. Much of Naef’s career has focused on air travel, an industry that has been transformed by technological innovations, and this to a larger degree than most other industries. Just a few years ago, many of the digital services that we now routinely use during air travel were conceivable only to a handful of technological visionaries.

Naef’s work demonstrates its value right at the outset by drawing a clear distinction between “digitalisation” and “digital transformation”. The “digitalisation” process, though widely hailed, often entails little more than the adoption of new technologies. “Digital transformation,” by contrast, requires the extensive reorganization of business processes and models, and Naef describes the opportunities and associated challenges in detail, using many practical examples. Understanding information technology not as a supportive tool but as a strategic partner in the company is a leitmotif throughout the book.

Naef’s four-stage maturity model for corporate digital transformation is especially useful. The “hybrid companies” described in the fourth stage, which employ a combination of traditional and digital business models, illustrate a new dimension of digital transformation. Firms such as Amazon, Uber, and Airbnb have recognised that personal contact with customers and direct control over physical products are not only consistent with a digital business model, they also open up new business possibilities and enable more effective quality assurance.

Building upon the four-stage maturity model, the book provides many practical recommendations for implementing a digital transformation at the corporate level. Naef highlights the importance of ensuring that boards of directors possess adequate technological skills, describes how to create flexible networks, and details the ground-breaking concept of the quantum organisation – a new corporate paradigm for the network age that replaces traditional hierarchical structures.

With this book, Patrick Naef offers a clear and practical guide for managers who recognise the strategic value of information technology and wish to successfully shape the digital transformation of their companies.

Robby Wirth

Board Member, ACENT AG

Introduction

In recent years, digital transformation and digitalisation have become critical issues that all companies must contend with, even those whose core business is not directly related to digital technologies. Unfortunately, surging interest in the subject has resulted in a great deal of nonsense being written on the subject of digital transformation, and a growing number of self-proclaimed experts are hawking questionable strategies to business leaders. Many of those leaders have little meaningful experience with the latest digital technologies and lack a clear understanding of their utility and potential, making them easy targets for anyone who can convincingly lay claim to expertise.

Very few firms can boast of having fully implemented a comprehensive digital transformation, and most attempts to date have been partial or incomplete. Nevertheless, there is no shortage of people who will eagerly announce that they have led successful digital transformations many times over. Anyone who claims to be a specialist in digital transformation with an impeccable track record should be treated with suspicion.

Much of the gulf between perception and reality in this area – the questionable efficacy of “experts”, the dubious veracity of “success stories” – stems from the fact that the essential concept of digital transformation is neither clearly defined nor widely understood. Asking ten of these so-called experts to define digital transformation would probably yield eleven different answers, because most of them have no precise idea of what it entails.

I make no claim to possess a single authoritative definition, but I can offer a simple one that makes sense to me. The first step is to distinguish between “digital transformation” and “digitalisation”. Although these terms are often used synonymously, they refer to very different processes, goals, and outcomes. Differentiating between the two terms is the first step toward understanding them.

1 Digitalisation vs. digital transformation

Though the terms “digitalisation” and “digital transformation” are often used synonymously, the two concepts differ in important ways. “Digitalisation” means using information technology to automate existing processes within established business models and markets. Implementing an enterprise resource planning (ERP) system to automate financial, human resources, and material management, or using robotic process automation (RPA) or artificial intelligence to assume administrative functions currently performed by workers are examples of the digitalisation of internal corporate processes. Marketing existing products and services available via websites and mobile apps is an example of the digitalisation of sales channels. Automating transactions with external suppliers, distributors, or other partners is an example of the digitalisation of supply chains. Though continually evolving, digitalisation is not new at all. It began when the first computers arrived on the market and started to supplant formerly manual processes.

By contrast, “digital transformation” is the use of information technology to exploit new business models or markets, to redesign core processes, or to develop wholly new products and services. Unlike digitalisation, which focuses on increasing the efficiency of existing processes and systems, digital transformation involves fundamentally altering the way in which the firm does business.

Examples of digitalisation and digital transformation:

Digitalisation

Cashpoints (ATMs): A new technology makes performing simple bank transactions more convenient, but the actual process of withdrawing money remain largely unchanged for the customer, and cash is still issued to the customer in the form of physical banknotes.

In 1939, Turkish-born Armenian George Luther Simjian, an inventor of numerous devices and holder of more than 200 patents, developed and assembled the first cashpoint – the so-called “Bankograph”. City Bank of New York, now known as Citibank, put the new machine into use, but it was not a success. Gamblers and sex workers were the only customers who dared to use the newfangled devices. The Bankograph failed to gain widespread acceptance and was taken out of service a mere six months after being installed.

In 1965, Scotsman John Shepherd-Barron arrived at his bank just before closing. Although he was able to cash his cheque at the last minute, the experience continued to vex him. Why were there machines that could dispense chocolate bars, but none that could dispense cash? He pondered the problem and eventually came up with an initial design for a cash-dispensing machine. Within two years, Barclays Bank had produced six prototypes of Shepherd-Barron’s invention, and the first of the machines was put into operation on 27 June 1967 in Enfield, north of London. The modern cashpoint was finally born.

As the invention was refined, its range of functions steadily expanded. Banks wanted to enable their customers to complete most of their banking transactions at the machine and at any time, day or night. Cashpoints would enable banks to pare back their teller staff while increasing the frequency of customer interactions. Though the advent of cashpoints has permanently altered how banks engage with customers, the machines merely automate services previously performed by human staff. Bank business models remain unchanged.

Moreover, new technologies have begun to supplant the services of cashpoints. With the arrival of digital payment methods such as credit and debit cards, mobile banking, and peer-to-peer payments, cash is gradually becoming less important, and so are cashpoints. These newer systems gained further traction during the COVID-19 pandemic, and in the future they could replace cashpoints entirely. This example illustrates a key feature of digitalisation: it is typically an iterative process in which new technologies render previous systems obsolete, only to be outmoded in turn.

Online check-in for air travel: Electronic check-in kiosks at airports reduce waiting times, but the check-in process itself remains essentially the same.

Alaska Airlines introduced the first self-service check-in kiosks in 1997 on a trial basis. The kiosks were designed to shorten waiting times for passengers by allowing them to print out their boarding passes, choose their seats, and receive their luggage tags without having to queue at a counter. While accelerating check-in improved the use of airport resources, even in this example, the check-in process remained essentially unchanged. A physical plane ticket was still exchanged for a physical boarding pass at the kiosk. Human check-in agents were replaced by machines, and the actual work was transferred from the airline’s employees to its customers.

With the widespread use of mobile phones and airline apps, neither a physical plane ticket nor a physical boarding pass is required anymore. Instead, each is displayed in digital form in the app. Fully digitalising the check-in process yields further efficiency gains for customers and airlines, though the transition is constrained by the limited uptake of apps among travellers and by their reluctance to trust a fully digital version of an important document. This example highlights another feature of digitalisation: a mix of caution, scepticism, and the inertia of ingrained habits can slow the implementation of new technologies, even when they offer a clearly superior solution.

Digital transformation

Swiss Post: From traditional postal service provider to national digital leader

For 175 years, Swiss Post has connected individuals and firms across the country and ensured the safe transport of information, goods, and people. In the digital age, the postal service has continually adapted to meet the growing challenges and needs of a digitally networked society. The path to a digital future involves not merely adapting to change, but consciously shaping the integration of firms, government agencies, and the people of Switzerland.

Digital communication can now be broadly divided into three areas: business-to-business (B2B), business-to-customer (B2C), and customer-to-customer (C2C). For the first two segments, Swiss Post provides IT solutions that enable rapid, reliable, and, above all, secure interactions. While formal communication dominates in the B2B segment, and companies such as SAP, Microsoft, and Google play a central role, B2C and C2C communications systems rely on a more informal, often mobile communication infrastructure led by Meta subsidiaries Facebook and WhatsApp.

Rather than merely standing by and observing these developments, Swiss Post has helped shape digital communications as a driving force behind a modern, networked Switzerland. As part of its growth strategy in 2021, Swiss Post formed a new division, “Digital Services”, with a mandate to advance the country’s digital transformation by enabling companies, public authorities, health services, and private individuals to exchange sensitive data securely and efficiently. Digital Services invests in digital solutions that are simple and intuitive, with a focus on formal B2C and B2B communications. This approach has enabled Swiss Post to transform itself by developing the capacity to provide new digital products and services to new clients via new digital distribution channels.

Netflix: From shipping DVDs by post to a streaming service that now produces most of its content itself

Netflix was founded by Reed Hastings and Marc Randolph in 1997 as a subscription-based DVD rental service. Hastings and Randolph’s original objective was to create an e-commerce platform, like Amazon, but exclusively for films. Customers would sign up for a subscription, choose the films they wanted to rent and then have the DVD delivered to their doorstep within one working day. Users could watch as many films as they wanted as part of their monthly subscription.

In the 1990s, the unlimited online DVD-by-mail model was a ground-breaking innovation. This new approach enabled users to rent films online and receive them at home without needing to visit a video rental store. When it was launched, Netflix had only a modest catalogue of films for clients to choose from, and it initially faced an uphill struggle. Two years after its launch, Netflix had attracted just 300,000 subscribers. Meanwhile, the high costs of physically shipping DVDs via the US Postal Service plunged the company into a financial crisis. The situation became so serious that Hastings was forced to offer Netflix’s competitors, Blockbuster and Amazon, shares of up to 49% in the company, but no deal was reached. Blockbuster was the dominant player in the brick-and-mortar video-rental industry at the time and its more conventional model appeared to be thriving.

At the beginning of the 21st century, however, digital innovation dramatically altered the competitive landscape. High-speed internet became increasingly common, and costs dropped significantly. The video-on-demand market, where Netflix was already an established incumbent, suddenly gained momentum. Originally, Netflix had planned to take an analogue approach to replacing physical DVD rentals by developing a portable device onto which films could be downloaded for later viewing. Although this approach offered high-quality services, it was not very convenient in terms of user experience, and it was shortly discontinued. In 2005, Netflix transitioned to a direct streaming platform, which was operational by 2007. A mere 1,000 movies were available for streaming at launch, but the catalogue increased by an order of magnitude over the subsequent two years. The increasing popularity of video-on-demand catalysed Netflix’s growth outside of the United States, and by 2016 it had conquered the global market. At the end of 2017, the company had more than 100 million subscribers and one of the highest market capitalisations in the media and entertainment industry. Enabled by the ongoing expansion of high-speed internet and the user-friendliness and interoperability of Web 2.0, Netflix’s digital transformation fundamentally altered the market and created a new, more efficient service model.

2 The four-stage model of digital transformation