Digital Finance
Minhyuk Lee
Fintech Convergence Major
Pusan National University
What is Digital Transformation?
1. 4th Industrial Revolution
•
The Industrial revolution : a tremendous change that changes the overall lifestyle
of society through the use of production technology or energy.
•
In 2010, Germany announced Industrie 4.0, which means the convergence of
manufacturing and information communication.
•
In 2016, World Economic Forum (WEF, Davos Forum) set a major agenda for the
4th Industrial Revolution
★ German manufacturing development stage
Industrie 1.0
Industrie 2.0
Industrie 3.0
Industrie 4.0
Mechanization
Hydro(water),
Steam,
Textile Industry
Massive Production
Conveyor assembly
line, Electrical
energy
Automated Production
Smart Factory
Autonomous
system, IoT, ML,
Virtual System
1784
1870
Computer,
Electronics
Engineering, Robot
1969
2013~
What is Digital Transformation?
★ Period and characteristics of each industrial revolution
1st Industrial
Revolution
2nd Industrial
Revolution
3rd Industrial
Revolution
4th Industrial
Revolution
18th Century
19~20th Century
Late 20th Century
2015 ~
Steam enginebased
mechanization
revolution
Mass production
revolution based
on electric
energy
Information
revolution
based on
computer and
Internet-based
knowledge
Utilizing a
steam engine,
the textile
industry in the
UK became
huge
Mass production
with conveyor
belt using
electricity
US Global IT
companies were
grown up
Hyperintelligence
revolution
with Bigdata,
analysis, AI,
Robot, IoT, Drone,
3D printing, and
Nano Technology
What is Digital Transformation?
2. Digital Transformation
• “Changes that the digital technology causes or influences
in all aspects of human life”
- Eric Stolterman & Anna Croon Fors: “Information Technology and the Good Life”, 2004
https://www8.informatik.umu.se/~acroon/Publikationer%20Anna/Stolterman.pdf
• 4th Industrial Revolution focuses on the overall change in economy, industry,
society and politics following technologies changes
• Digital transformation focuses on fundamental changes from the
perspective of corporate management strategies according to the digital
paradigm.
What is Digital Transformation?
■ IBM’s View
• The source of modern digital transformation
= Wide spreading Technology
→ Increasing convenience in life
→ Empowering consumers
Digital Transformation ultimately transforms the business model itself !!
Source: IBM
What is Digital Transformation?
■ WEF’s View
The pace of change is accelerating through the ‘combinational’ effect
of digital transformation !!
Source: World Economic Forum 2016
What is Digital Transformation?
■ Capgemini’s View
The use of technology to radically improve performance or reach of
enterprises !!
Source: 2011 MIT
Center for Digital
Business and
Capgemini Consulting
What is Digital Transformation?
3. The Evolution of Digital Transformation
Source: IBM
What is Digital Transformation?
4. Digitization vs Digitalization vs Digital Transformation
Source: https://medium.com/procurementtidbits/what-is-the-digital-transformation-ofprocurement-really-about-9d2148e04638
What is Digital Transformation?
5. Digital Transformation is not IT Build project
• Digital transformation is not creating an IT department that was not
originally in the company.
• It creates new customer experiences, products and processes based on
digital technology.
• It changes the overall operation method such as business and strategy.
• Some companies create an agile organization that responds flexibly to
situations and perform design thinking.
What is Digital Transformation?
Agile vs Waterfall
Source: https://saigontechnology.com/blog/agile-vs-waterfall-in-software-development
What is Digital Transformation?
The five trademarks of agile organization – McKinsey
https://www.mckinsey.com/busines
s-functions/organization/ourinsights/the-five-trademarks-ofagile-organizations
What is Digital Transformation?
6. Difficulty of digital transformation
• The concept was created in 2004, but results are coming out from 2019.
• Very few companies are successful in digital transformation. (30%)
• If digital transformation fails, it can cause great damage.
• Three reasons that digital transformation fails
1. When the CEO doesn't have a clear goal
2. When the organization is not healthy
3. When employees are not actively participated
• Overcoming the “Pilot Trap”
What is Digital Transformation?
7. Fail cases: GE, Ford, P&G
• In 2018, the total amount invested in digital initiatives in US was 1.3 trillion
dollars.
• Of this, 70% or 900 billion dollars invested in failed digital transformation
project of 3 companies(GE, Ford, and P&G).
Learning Points
1. (Strategy and Vision) What you want to achieve through digital
transformation should be clear.
2. (Organization Culture) Fostering an organizational culture that tolerates
failure
3. (Cooperation) Environment in which new strategies are accepted and
communicated by department
Q&A