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Digital Value Chain - Avoiding Law of Diminishing Returns

Modern society is consuming digital services like never before and if this trend continues we will be digitally overwhelmed & fatigued society very soon. There is an insatiable desire to digitize every experience, product, service and business. In such society it is common to have at least 5-6 smart devices in a family - smart phone, smart wrist band, smart TV, Tablets and laptops. In addition to this we are continuously exposed to smart billboards, cars, houses and workspaces. Our average Digital interaction (direct or indirect)  is at least 12-14 hrs a day.

In this ever increasing digitally connected society I feel the quality , not the quantity will matter. In fact as we evolve into more connected society, the impact of digitization follows law of diminishing returns.

While the craze to digitize every possible experience and business is unstoppable, there is a need for optimization based on priorities, time, place. And Businesses which are able to optimize Digital Information, experience and infrastructure will thrive on this Digital age:-

Real time vs right time:-  While there is no denying that some of us live in a society where knowing information bit early gives competitive advantage, but the bigger challenge is knowing what services to be delivered on real time and what can wait. And what is the right time to deliver that. For example, A summary of right financial investment options to a Cxo delivered mid-day is liked to be ignored than delivering it at end of day, when the individual is relatively free. focusing on right time will improve the brand perception and potentially improve revenue streams.

Push and pull of information:- In the age of hyper personalization, our ability to learn more abt individuals have grown manifold; Yet we bombard individuals with notifications of news, Facebook, tweeter, whatsapp, linkedin, mails, weather, public services and utilities. While we choose to allow push notifications or give consent for digital marketing, but organizations can further understand priorities of individuals based on interaction history to improve  quality of interaction impacting the customer experience. For example, Train disruption is an important information to a train commuter, road and traffic accident and jam is for Car commuter. Weather warning is important for an event organizer. able to identify the peoples daily routine and habits and optize such this are very important.

Online vs Offline:- Proliferation of digital technologies enabled high degree of communication and interaction through digital channels. While most of the interactions are nowadays delivered online, there are few services which still best delivered offline or F2F improving trust and loyalty. For example, a condolence messages or a Mortgage advising can be better suited for offline channels.

Crowd Sourcing Vs Niche Community:- While power of many is always better than power of individuals. But, I would argue that it’s the power of right skilled and right aligned people can be more effective than the so called crowd. Crowd sourcing platforms are relevant for idea generation, but lot of noise reduction and filtering needs to be done before G&O of the exercise can be achieved. For example, A community of investment bankers or stock brokers or a software developers can achieve the G&O quicker.    

Augmented Reality Vs virtual reality:-  Our desire to see our unfulfilled dreams through our Digital Avatar remains very insatiable. I believe that, Augmented reality will play a bigger role in society, where you will be able to blend real life with virtual life and provided a powerful experience. For example, Microsoft Halo lenses are a step towards to right direction. Some of the popular use-cases will be early adopters like financial advising, retail experience etc.

Internet of every things Vs Internet of relevant things:- We are entering the era where every machine is getting connected to internet and getting controlled by Human beings. But, one has to ask, do we really need everything to be connected and what benefits it provide? For example, A coffee machine or a fridge, table, chair etc becoming connected will have potentially less benefits than say, connected Car, HealthCare, energy efficient home, surveillance etc. Finding the usecase for benefit delivery is important than going after all.

Information vs insight:- In the new digital world the velocity at which the data is generated is enormous. And we are overwhelmed by the amount of information thrown at us. One would argue if we need all information. Rather we need insights out of information. For example, if you are watching a football match, ball possession % is information, but, insight will be 80% of the times a team has own when a ball possession is more than 60%. Similarly a hot summer day  temperature is information, but if temperature rose more than 30 C carries a risk of thundershower is insight.

Big data vs relevant data:- The volume & variety of data generated requires huge degree of processing powers and storage space. I think the time has come that we start to process some data on the EDGE and not let it go beyond the EDGE devices. For example, a CC TV footage of an empty street will or your backyard will mostly has same data captured. You could compress or discard much of them as its of no use. Similarly lot of data captured by Temperature, speed etc sensors are mostly repeated in nature. Only relevant data can be stored to avoid data overflow. 

In order to move from digitally overwhelmed and fatigued society to Digital delighted society and continue to provide substantial value and avoid law of diminishing returns, businesses will focus on optimised experience and services. And this will give rise to Optimised experience provider or Information & analytics service providers, smart infrastructure providers.


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Abhishek Chatterjee

Abhishek Chatterjee

Managing Partner

Gartner Inc.

Member since

16 Dec 2014



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