Are Businesses capable of Digital Transformation?

Digital Transformation (DT) has been happening since the birth of the Smartphone when IT direction was taken from the hands of businesses into entrepreneurs and individuals. Large corporations are too slow and lack leadership, innovation and drive to target DT. They are further regulated too heavily to be flexible. I am advising my customers to not spend huge amounts of money on it prematurely but keep a close watch on what is turning from hype to reality and market dominance. I advise them to target flexibility rather than a strict architecture. Internally businesses will continue to operate on a transaction level and what is called processes will be pushed outwards towards partners and customers. I advise business to NOT REPLACE people by automation but to AUGMENT their employees and EMPOWER their customers. Not that it helps much as I will show below. It won’t be their choice what DT means will be employed. The most relevant aspect of DT is actually what governments plan to do with it especially those on the left when you look at China (see its Social Rating project) and even Canada (if Trudeau remains and has his way). European Union research and investment into DT is close behind.

Why is this a political scenario? If leftist governments continue to tax people and businesses higher for employment rather than taxing corporate revenue, bank transactions and profits (as they should according to their lies) then the trend of falling employment will continue and DT and silly enough AI will be blamed for it. Leftist governments have been killing Western employment and technology progress for decades now with regulation that supposedly protects workers. That reality actually created the new China through outsourcing! Easy to see unless you are blind and ignorant. Facebook, Google, Apple and the likes are already under government mandate under the threat of even tighter regulation just as the financial systems that supposedly run our ‘free markets’ but only exist to fund government debt! There are those who propose that these government controlled systems in China as in the West are doomed to collapse, taking the financial system down with it. And yes, that is a possibility considering how far financially overextended all these systems are. But it is not the US that has any interest in destroying China’s currency or markets due to dire consequences for the US. And China has no interest to use the huge amounts of US debt it owns to destroy its money making machine. But the problem may be inherent and not controllable.

Why are we at this point? Businesses target lower cost and risk and employed staff belong to the largest component in both due to government regulation. Use of automation and outsourcing to Asia (virtually China alone) are just the means of businesses to reduce that regulatory side effect of protective labour laws (if it actually is a side-effect and not possibly intentional). China is already on the forefront of DT-use and due to its unique situation as the Worlds IT supplier is now sucking up Western know-how, resources and businesses at an unprecedented rate and we continue to fund it. They invest more into automation than the Western buyers who could do the same if they would not be punished by taxes for doing so. And you think buying oil from the Middle East is a problem? Western progress and social security is being erased. Everyone knows …

With DT, unlimited government control over individuals and businesses is finally possible – the wet dream of every fascist dictator or government pretending to be socialist or even democrats. There is no way to avoid Digital Transformation as it will happen and in the worst case it will be widely mandated by governments and not by free market forces. I remain currently optimistic that the human drive for freedom will eventually prevail. But be careful who you vote for!!!

Don’t get me wrong as I do ultimately believe in the good in people (not governments) and in the great benefits of our technological advances. DT could be the basis for a new truly democratic society with FULL government transparency and ABSOLUTE individual privacy. Not the other way around. But that is not the plan as in difference I do not believe in the good intentions of governments. The more money they demand and spend supposedly on projects to save or advance humanity the more they are working under the covers to increase their amount of control and their disconnect from the forces of democracy and freedom. Like in ancient Egypt they will continue to build more pyramids.

I am not in a panic but I surely wonder. And surely somebody will see this analysis as a conspiracy theory … and you need to wonder why.

I am the founder and Chief Technology Officer of Papyrus Software, a medium size software company offering solutions in communications and process management around the globe. I am also the owner and CEO of MJP Racing, a motorsports company focused on Rallycross or RX, a form of circuit racing on mixed surfaces that has been around for 40 years. I hold 8 national and international championship titles in RX. My team participates in the World Championship along Petter Solberg, Sebastian Loeb and Ken Block.

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6 comments on “Are Businesses capable of Digital Transformation?
  1. afournier89 says:

    Thank you for this post, Max. I fully share your point of view, which does definitely NOT make us conspiracy theorists :).
    Bureaucracy and states’ obesity is the weight that prevents businesses from employing as they should to get the knowledge, flexibility and adaptiveness that only human are capable of. Digital transformation will then increase the issue instead of solving it: being only a tool, it is not a solution. Since 10+ years, from my experience, all IT projects end up in FTE reduction, and no (or too few) business cases are about anything else than cost reduction, meaning employment reduction. Result is less flexibility and less market adaptability. Large businesses are weaker and weaker in that field. DT projects are NOT an exception to this rule.
    Therefore, innovations being purposed to focus on cost saving, it is very likely that they will be found guilty of raising unemployment rates in Europe. But this is not to business to search for a different business case, even if they would be smart to do so. A political shift will need to happen to make hiring more profitable. As of today, human factor being a targeted cost, freedom is a threat. To my opinion, this is partly explaining yellow vest contest in France, Italian political changes, and eventually Brexit to some extend (if it is not the root cause, it is definitely part of the issue).
    Leveraging taxes by the correct balance between employment and corporate social efficiency will certainly increase employment rate but will lower some benefits (especially financial activity profits). For this reason, is not likely to happen with actual EU leaders. State obesity that builds on social requests is no longer serving any social purposes but EU bureaucracy and financial bubble (that is exactly the contrary).
    Best regards

    Like

    • Hi Antoine, thanks for reading and commenting. Much appreciated. Unfortunately this is kind of a vicious circle we are in and I assume that it is intentional to put people under more pressure to vote for strong government because corporations are not loyal to them. In effect it is the regulation and cost of employment that makes business hire and fire! it is a pity that this is so poorly understood by the voters. They think that employment protection laws increase employment when they do the opposite. In terms of the global consequences there is a lot of speculation as to who has which intentions and what it will mean in the end. At this point in time the outlook is not good because it is either a larger financial collapse, war to hide the culprits or a totalitarian new world order run by the UN. The first two will be the punishment for us trying to vote against a leftist world order. So I am trying to be optimistic but I am still worried. Part of the problem is that the youth coming out of university has been indoctrinated for 20 years and they no longer understand democracy. They think freedom of speech and privacy are extreme right concepts and not the core aspects of freedom. People who are in retirement tend to vote left because they need the government handouts but they at least know how the world has changed. The young people don’t. They take it all for granted and forget how many people fought and gave their lives to accomplish what we have. I am not sure how that could be changed. But we need to try!

      Like

      • afournier89 says:

        Dear Max, I see your optimism reaches some limits ;)
        Today’s confusion between extreme right and lot of humanist’s concepts (freedom of speech, security, identity, culture) starts to cause reactions in EU and, if I understand it, I can only worry about the outcome. I see a lack of though in our governments and their fanatic supporters, while though comes first before any human values. Result is a lack of real alternatives.
        Back to your post about businesses being capable of digital transformation or not: They are driving in the mud created by our institutions and are looking to grow wings to get out of it, hence their usage of technology to reduce mankind usage. So the real questions is political: Are Modern societies capable of (real) Digital Transformation?

        Like

      • Hi Antoine, to the left-minded everyone who disagrees with their view of the world is extreme right. They live on the LEFT pole. Every other direction is right. At tis point in time anything else than left is better so we gain back some form of balance. Real alternatives will develop when the dominance of in science, education and media is broken. Modern society has already transformed to digital to a large extent, the question is if they understand the slightest what the dangers are!

        Like

  2. spieltmit says:

    Well written as always – I’m optimistic too despite the odds….

    Like

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Max J. Pucher
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by Max J. Pucher. All rights reserved.

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