Tesla: Driving Digital Transformation & Disrupting the Ecosystem

By Dawood Khan

As organizations explore digital transformation (DX) and determine business value in light of the buzz around Internet of Things (IoT) and Big Data, it is essential to remember that DX is more than just a technology overhaul, DX is a journey that can transform business models, processes, and customer engagement, and can even impact unrelated industry verticals. The recent launch of the Tesla #Model3 illustrates this perfectly.

DX can have implications on different levels, from company-level impact, to impacting the sector, and even an entire ecosystem. Take Telsa as an example. Everyone knows that it revolutionized the way we look at electric cars, but until the recent launch of the Tesla Model 3, few could have imagined the frenzy of consumer buying. People lined up to buy the vehicle like they would buy a hot new consumer electronics product. Within 48 hours of its launch, the car had 276,000 pre-orders totaling $10B in potential sales, and $276M in deposits. Tesla has in fact revolutionized the business model in its sector. It has crowd-funded the partial cost of manufacturing the Model 3. While the actual process to reserve a Telsa Model 3 took all of 2 minutes on average, consumers who signed up are willing to wait a year and a half or more to receive their vehicles.

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Not only is Tesla disrupting the auto sector, it either has already or will soon impact a range of other sectors. As a connected car – updates are done via software upgrades, “over the air”, using wireless carrier networks or WiFi, thereby creating revenue streams for an ecosystem of carriers, electronic SIM manufacturers, etc. And generally, the expected entry of self-driving vehicles will certainly impact how smart cities plan transportation systems, roads, traffic flow, etc. The insurance industry is already looking to assess the impact of such vehicles on policies, and one can imagine that changes to driving regulations are in order.

So, digital transformation is about more than harnessing a new technology to improve, revamp, and overhaul processes and operations; it is about identifying and creating new value propositions. And as we have seen with the likes of Tesla, Uber, and other disruptors, entire industry sectors and business models have been disrupted, in some cases, traditional ways of doing business have been rendered obsolete.

While most organization realize that it is imperative for them to assess and respond to changes that digital technologies bring in order to remain viable, the challenge many organizations face, however, is that with the rapid changes in technologies and the plethora of vendor solutions for the “Internet of Things” and “Big Data Analytics” – figuring out where to start the DX journey and navigate the landmines along the way is a challenge in and of itself. Starting and planning the DX journey the right way are essential to success.

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