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Isn't Netflix a prime example? Or am I misunderstanding the meaning of "digital transformation"? Netflix used to be a DVD rental service, and in fact that servi

by Xixi 8y ago

Isn't Netflix a prime example? Or am I misunderstanding the meaning of "digital transformation"? Netflix used to be a DVD rental service, and in fact that service still exists: https://dvd.netflix.com/ https://dvd.netflix.com/.

michaelt 8y ago
The problem with the phrase "digital transformation" is it's extremely vague, implying either that managers don't know precisely what they're attempting and how it will generate business value; or that there's a raft of separate efforts so loosely related that the only unifying theme is that computers will be involved. If your plan is "provide streaming video" you'd call it that instead, thereby showing you know what you're trying to do, what success means for the project, and how it will produce business value.
scott_s 8y ago
I believe the people who ran Netflix always understood what their business was. I don't think they ever saw themselves as a "DVD rental service." I think they - rightly - saw their business as serving entertainment on demand. To support this, recall that back in 2011, Netflix tried to make this clear by spinning off the DVD rental part into Qwikster, and people revolted. They backed off (https://media.netflix.com/en/company-blog/an-explanation-and-some-reflections https://media.netflix.com/en/company-blog/an-explanation-and...). But I believe they did this because they knew their business is delivering entertainment, and that streaming was going to become the easier way to do that versus DVDs. Their folly was enforcing this vision too aggressively on their customers. If they spun off the DVD rental service now, I don't think many people would care. I don't see this kind of clarity in some other companies that try to transform themselves. I think it's quite rare.
- Xixi 8y ago
  Indeed Netflix was successful, while a lot of other companies are not/weren't (Blockbuster, etc.). But because a company doesn't quite understand how/if it is going to be impacted by a digital transformation doesn't mean it shouldn't try or care. Quite the opposite, if you ask me. Not long ago AI was such a taboo word that people were avoiding it at all cost, because pronouncing it was a sure way to drive any kind of funding away (funny how quickly these things change). So anything yielding tangible results (machine learning, natural language processing, image recognition, etc.) was "not AI". AI were those crazies trying to put the human brain on a chip. My point: because Netflix underwent a successful digital transformation doesn't mean it's not a digital transformation, it just means that it's possible to describe it in a much more specific way. Same in the heavy industry: Boeing/Airbus underwent crazy digital transformations, but they are not called that way because it's possible to be much more specific: simulations when it comes to design, 3D printing on the production side, etc.
  - scott_s 8y ago
    My point was that Netflix always understood what their real business is. Not all companies do. As an aside, I do think the "digital" part is not the most significant part of Netflix's transformation. In pursuit of "we deliver entertainment on demand," Netflix started creating entertainment. That is a bigger cultural shift for a company than creating a streaming service. (Although their streaming service is an impressive and significant achievement.) But if they hadn't started creating entertainment, I don't think Netflix would be as relevant as they are now, nor would I think they would have a future.

by Xixi 8y ago

michaelt 8y ago

The problem with the phrase "digital transformation" is it's extremely vague, implying either that managers don't know precisely what they're attempting and how it will generate business value; or that there's a raft of separate efforts so loosely related that the only unifying theme is that computers will be involved. If your plan is "provide streaming video" you'd call it that instead, thereby showing you know what you're trying to do, what success means for the project, and how it will produce business value.

scott_s 8y ago

I believe the people who ran Netflix always understood what their business was. I don't think they ever saw themselves as a "DVD rental service." I think they - rightly - saw their business as serving entertainment on demand. To support this, recall that back in 2011, Netflix tried to make this clear by spinning off the DVD rental part into Qwikster, and people revolted. They backed off (https://media.netflix.com/en/company-blog/an-explanation-and-some-reflections https://media.netflix.com/en/company-blog/an-explanation-and...). But I believe they did this because they knew their business is delivering entertainment, and that streaming was going to become the easier way to do that versus DVDs. Their folly was enforcing this vision too aggressively on their customers. If they spun off the DVD rental service now, I don't think many people would care. I don't see this kind of clarity in some other companies that try to transform themselves. I think it's quite rare.

Xixi 8y ago
Indeed Netflix was successful, while a lot of other companies are not/weren't (Blockbuster, etc.). But because a company doesn't quite understand how/if it is going to be impacted by a digital transformation doesn't mean it shouldn't try or care. Quite the opposite, if you ask me. Not long ago AI was such a taboo word that people were avoiding it at all cost, because pronouncing it was a sure way to drive any kind of funding away (funny how quickly these things change). So anything yielding tangible results (machine learning, natural language processing, image recognition, etc.) was "not AI". AI were those crazies trying to put the human brain on a chip. My point: because Netflix underwent a successful digital transformation doesn't mean it's not a digital transformation, it just means that it's possible to describe it in a much more specific way. Same in the heavy industry: Boeing/Airbus underwent crazy digital transformations, but they are not called that way because it's possible to be much more specific: simulations when it comes to design, 3D printing on the production side, etc.
- scott_s 8y ago
  My point was that Netflix always understood what their real business is. Not all companies do. As an aside, I do think the "digital" part is not the most significant part of Netflix's transformation. In pursuit of "we deliver entertainment on demand," Netflix started creating entertainment. That is a bigger cultural shift for a company than creating a streaming service. (Although their streaming service is an impressive and significant achievement.) But if they hadn't started creating entertainment, I don't think Netflix would be as relevant as they are now, nor would I think they would have a future.