Opinion

Digital transformation using exponential ABCD-X technologies

Digital transformation using exponential ABCD-X technologies

The CEO & CTO GDP Labs and CTO GDP Venture, On Lee. (ANTARA-HO/GDP Venture)

After working abroad for the past decade, I drove by my old neighborhoods in Redmond, Washington, and Mountain View, California, in 2021.

I noticed that Amazon, Apple, Google, and Microsoft have been building several new modern office buildings on their main campuses.

They have been experiencing compounded double-digit year-over-year growth in both revenue and profit due to the accelerated digital transformation.

Consequently, each of them has reached a key milestone to become part of the elite trillion-dollar club of global companies by market capitalization.

In contrast, I saw many old buildings, which were once occupied by Blockbuster Video, Borders Group, Circuit City, Fry's Electronics, Toys "R" Us, and Sears, either empty or replaced by other companies.

They all went bankrupt due to creative destruction by technology-driven startups. The irony is that each of these companies used to be a pioneer, leader, or disruptor in their industries.

There have been countless case studies by former employees, experts, analysts, and MBA schools as to why they failed.

In other words, they gradually and painfully lost their businesses without knowing why their time-tested business, which used to serve them well, stopped working.

Then, they suddenly went bankrupt, as it was too late to recover by the time they realized what was happening.

One of the key reasons is that they failed to radically adapt and adopt emerging technologies like the Internet, web, and mobile computing for the past 20 years.

The analogy: The Internet technology is a car and pre-Internet technology is a horse. It was like they were still using horses while their competitors were using cars.

The burning trillion dollar questioned “why don’t more companies adopt technologies with a sense of urgency for their business to avoid the same deadly mistake?

The rise of exponential ABCD-X tech

Although Amazon, Apple, Google, and Microsoft focus on ecommerce, device, search and software productivity respectively, they all have one thing in common: They all invest heavily in and leverage AI, Blockchain, Cloud, Data (ABCD) and X (IoT, Mobile, Security, Web) technologies. In short, exponential ABCD-X technologies.

Each of these technologies has become a multi-billion dollar business in its own right.
Computer ideas have been around for hundreds of years. Computer mainframes were the first to be commercially available in the 1960s, going mainstream with PCs becoming affordable at work and home in the 1990s and boosted with smartphones in the 2010s.

There are more computers than people in the world now!

Oftentimes, technologies become more useful when combined. For example, see what happened when we put together the connectivity of the Internet, the power of PCs, and the mobility of smartphones.

The combined exponential ABCD-X technologies represent trillion-dollar opportunities and challenges in the next decade.

The ABCD-X concept is easy to understand and remember, capturing the past 60 years of modern computer evolution.

Solutions to the challenges

After speaking with many companies large and small, below are the top reasons why a few of them adopt quickly; many of them are dragging their feet, and some of them even ignore it altogether. Also, I present some potential solutions on how to overcome those challenges.

Only a few of them keep up with the latest technologies.

Most of them are too busy running their businesses to keep up with the state-of-the-art technologies that could help grow their businesses.

It is understandable that they do nothing if they don’t even know what they don’t know.

In other words, the companies will not miss them if they don’t know about them.

Accordingly, Gary Hoberman, Unqork Founder & CEO and former Executive Vice president and Global CIO for MetLife, shared, “80% of my spend – and that was US$1.2 billion a year – was spent on what you call “just keeping the lights on [... and] we’re still creating software the way it’s been created since punch card machines.”

Not a single dime of that US$1.2 billion was spent on innovation! This is not unique to MetLife.

Several companies were paying for outdated technologies, vendors locked-in with expensive, outdated pricing models, and maintenance fees.

It is the equivalent of continuing to pay for long distance and international phone calls while Zoom and Microsoft Teams exist.  


What is the solution? Educate everyone, starting with C-suite. Accelerate the company's learning by hiring new employees and external technology partners.

Furthermore, audit the outdated and expensive software and replace them with modern and significantly cheaper and better software.

Although the executives own the strategy, the rest of the employees implement and realize the strategy, so they need the skills. It requires collaboration and coordination at multiple levels.

AT&T budgeted US$1 billion to retrain over 100 thousand employees lacking digital skills to prepare for the digital disruption.

Many companies are sadly mistaken between digital automation and digital transformation.

Some of them thought they had applied digital transformation within their company.

In reality, they just added some digital automation. Even worse, some companies are still using outdated pre-ABCD-X technologies that have been installed over a decade or more.

The Wall Street Journal reported, “Yet, for many employees, going to work is like stepping back in time. We are faced with clunky interfaces, systems that don’t talk to one another, and complex sign-ons.”.

Creating a website for your existing company using the same process and same business model does not make your company an Internet company. This is evolutionary and will only result in limited incremental improvements.

AirBnB, Amazon, Instagram, Netflix, Uber, and WhatsApp are examples of digital transformations. They have transformed – reimagined, reinvented, reshaped, retooled, and redefined – the existing industries by leveraging digital technologies with new experiences, services, business models, ecosystems, processes, data-driven technologies, etc. This is revolutionary and will result in over 10x improvements.


We can encourage a culture of continuous learning. Keep up with the advances of technology by continuous learning because it is a never-ending process without a finish line -- not a one-time event.

Today’s technology is the foundation for future technologies, and every emerging technology creates new business opportunities.

There is always something new every five years. It means that employees need to keep updating their technology know-how continuously.

This way they could tell the subtle yet important differences between something like digital automation vs digital transformation and replace yesterday’s technologies with the latest ones.

We can treat technology as a Cost Center. Many companies still believe in the obsolete view that technology is a cost center. Considering cost only is a misleading, insufficient, and fatal mistake. Many companies are blind-sided by this short-sighted and short-term decision.

We can allocate budget and resources for technology as a part of the cost of doing business, like they allocate budget for electricity and Internet. Companies should look at both cost and potential return of investment in the long term as an investment to survive and thrive – not as a cost. Growth will follow!

The Wall Street Journal reported that Alphabet R&D expenses totaled US$31.562 billion, or 12.3 percent of its revenues, and Meta spent US$24.655 billion, or 21 percent of its sales. However, S&P 500 companies spent an average 2.82 percent of their revenue on R&D.

Why are they investing so much in technology? Some of the benefits of technology: faster, easier, cheaper, safer, smarter, and healthier for all stakeholders – customers, partners, employees, investors, and community.

Hence, it boosts productivity, reduces cost, and increases revenues and profit.

The growing profit enables the companies to invest more in technologies and people. A virtuous circle! In other words, technology’s roles have changed from cost centers to leading and fueling the growth of the company.

In Crossing the Chasm, 3rd Edition: Marketing and Selling Disruptive Products to Mainstream Customers that was published in January 28, 2014, Geoffrey A. Moore shows the Technology Adoption Life Cycle in five segments.

It starts with innovators (2.5 percent), who are tech enthusiasts, and moves to early adopters (13.5 percent), who are also tech enthusiasts; early majority (34 percent), who are pragmatists; late majority (34 percent), who are conservatives and laggards (16 percent), who are skeptics.

We can take the initiative to innovate and reinvent and transform to a tech company by combining internal expertise, new hires, and external technology partners to bring fresh ideas.

Things have changed dramatically since 1991, with the explosive growth of Internet and smartphone users especially during the pandemic: five generations – Baby boomers, Generation X, Generation Y, Generation Z and Generation Alpha – are using digital technology. Generation Y, Generation Z, and Generation Alpha were born and raised as digital natives.

Technology has become the mainstream as part of daily life like electricity. Thus, many companies have adopted technology at a much faster rate than a few decades ago.

Tony Saldanha, former Procter & Gamble Vice President for IT and Shared Services, shared that 70 percent of the digital transformation failed.

Many companies do not have the skills, and they did not know how to do it right.

As a result, many companies are afraid to start due to too many digital transformations failing.

Steven Zobell reported that it will cost the industry about US$900 billion in 2018.

The technological issues are just the symptoms on the surface of more serious problems.

The root cause is usually due to people's issues.

Specifically, ignorance, incompetence, and most of all the fixed mindset.

To overcome this, we can nurture a growth mindset through continuous learning, investment, and partnership.

Companies need to keep learning, unlearning, relearning, innovating, and adapting swiftly with a sense of urgency in the new environment to survive and thrive as part of the survival of the fittest in the ABCD-X era.

*) On Lee is the CEO & CTO GDP Labs and CTO GDP Venture The views and opinions expressed on this page are those of the author and do not necessarily reflect the official policy or position of the ANTARA News Agency


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