6 Digital Technologies to Gain Competitive Advantage in 2023
Six technologies for digital transformation
Most of the wealth generated in the world today comes from Technology or Technology- Enabled companies. We will focus on 6 technology areas that CTO/CDOs will be focused on to bring competitive advantage to their business.
NFTs or Non-Fungible Tokens provides means to capture and trade value of original and authentic digital assets such as music, images, virtual trading cards, virtual property in a metaverse, documents and tweets etc. Original digital assets are valued much higher by the market (usually the collectors of rare goods) than their digital copies.
NFTs are mostly “registered” on Ethereum Blockchain and allow original owners of digital assets to capture and store value of their digital assets.
How can businesses incorporate NFTs in their digital transformation strategy?
- Begin formal initiative to identify NFT-worthy digital assets under development or ownership
- Create processes and capability to get NFTs created for company’s digital assets
- Involve Finance to incorporate NFTs as financial assets or goodwill
- Involve Marketing to generate “demand” for NFTs to increase their value
- Create Sales strategy if selling NFTs is part of revenue generation strategy
DAOs or Decentralized Autonomous Organizations are “community governed” organizations without a central leadership. The rules to run the organization and the transactions are recorded in a distributed ledger using Blockchain. The platform enables trusted transactions with transparency among the group members. As with any computer program, the cost of transaction is lower compared to manual transactions.
- Identify existing DAOs that align with company’s business. There are more than 180 DAOs currently and the list is growing. One example is LexDAO which focuses on legal arbitration using artificial intelligence. Another example is Decentraland, a home owners association and a city planning committee that deals with virtual real estate in metaverses.
- Take a lead in forming new DAOs. Early adopters have higher chance of capturing a bigger piece of the future market.
Decentralized Identity Foundation or DIF is also a Blockchain based solution that provides a decentralized trusted database for identity authentication of people or digital assets, such as certifications and credentials. Participating entities will be able to carry out consent-based transactions securely without compromising privacy.
How can businesses incorporate DIF in their digital transformation strategy?
- Explore opportunities in value chain that go beyond the constraints of regulated identities. For example, an automotive company may want to identify each vehicle produced with a universal code other than VIN, which is controlled by centralized agency. Other example would be to identify workers in a global workforce where SSN is not practical.
- Participate in consortiums to establish the company firmly in this futuristic initiative and stay ahead of the race by achieving efficiencies of digital transactions in private, secure and free from constraining regulations.
Metaverse is a virtual reality world which may be based on real world in terms of its physical layout. Participants usually have their digital self (“avatar”) through which they interact with other avatars and digital objects. Transactions carried out in metaverses sometimes can cross over to the real world, opening up a myriad of commercial opportunities.
- Virtual real estate is available in metaverses which corporations are buying. These virtual properties may be utilized for business meetings and dealings. Advertising in metaverse can get serious views. Businesses need to evaluate and plan their metaverse presence and roadmap before competition gets severe there.
- Digital assets such as training videos, showrooms, art etc. can be planned for purchases.
- Capabilities to conduct financial transactions using digital currency needs to be planned for.
5. Web 3.0
Web 3.0 is a superset of several technologies such as AI, ML, NLP, IoT and Blockchain that open up newer possibilities in how humans interface with technology to enable new capabilities. Some examples include Apple Siri which can provide human-like answers to most questions or a refrigerator that can communicate status of groceries and even reorder items.
How can businesses incorporate Web 3.0 in their digital transformation strategy?
- Businesses will need to start understanding the vast ecosystem of smart, distributed/decentralized technologies and standards and create their high-level roadmap for incorporating these in either existing business or in new business
- Data has great value in Web 3.0, so businesses can begin stratifying the data assets by levels based on value and monetization plans.
6. Smart Contracts
Based on Blockchain technology, Smart Contracts enable peer-to-peer exchange of goods, services, property, money etc. without the need for intermediaries (or middlemen). Peers involved in the contract can remain anonymous as there is no need for personal details. Smart contract can “self-execute” according to the encoded rules, thus eliminating middlemen in the process.
How can businesses incorporate Smart Contracts in their digital transformation strategy?
Smart Contracts are already being widely used in commodity trading, banking, gaming, legal industry etc. With increased privacy, higher transaction velocity, automation and intermediary elimination, the cost of business can be reduced. This can mean competitive advantage to the business and should become a formal planning exercise this year.
The author Ashish Raghute is VP-IT at Allied Digital Services