[Opinion] Approaching the 2021 Turbulent Era with 'DX, Digilog, Pigital, and Deep-Tact'

Kim Kyung-jun, Vice Chairman of Deloitte Consulting

The fable of the "blind men touching an elephant" is well known. Long ago, a king in India asked blind men to touch an elephant and describe its appearance. One touched the tusk and said "a root," another touched the ear and said "a fan," and another touched the leg and said "a pillar." This warns against the bias that arises when inferring the whole based on partial sensations. However, if it had been a small rabbit instead of a large elephant, the visually impaired would have likely pictured the actual form in their minds. Essentially, the larger the object, the harder it is to grasp the whole.

The reason for reflecting on this in January 2021 is to survey the trend of digital transformation. Localized small changes are intuitively understandable, but massive changes that alter the entire economic and industrial structure, like the digital revolution, are on a different level. Signals that hint at future changes and noisy distractions are mixed, making the situation complex and confusing. Everyone explores their own direction, but initially, partial and biased perceptions like the "blind men touching an elephant" are natural. However, as time passes and the blurry image becomes clearer, concrete action plans for adaptation and survival are established and implemented.

In this regard, 2020 is likened to a turning point in digital transformation when the shape of the giant elephant became clear. This is because the trend that began over a decade ago accelerated due to COVID-19, which originated in China last year. In this continuum, 2021 is expected to be a period when analog and digital are actively fused and restructured. Since the image of the elephant has been grasped, substantial changes among economic agents are inevitable.

Following the term "DT, Digital Transformation," which referred to digital transformation until last year, the recently more frequently used term "DX, Digital eXchange" reflects this change. Although the difference is subtle, DT focuses on "one-way innovation based on digital technology," whereas DX emphasizes "convergent innovation through two-way exchange between emerging digital and existing analog domains."

The term "DigiLog," coined by Professor Lee O-young in 2006 from the concept of fusion approaching digital technology with analog sensibility, also embodies the idea of convergence. Recently, the term "Phisital," a blend of the physical world "Physical" and the virtual world "Digital," has emerged. Originally a marketing neologism emphasizing the digital responsiveness of physical space devices like drones, it is expanding to concepts such as automotive companies' on-offline hybrid sales methods. The idea of "DeepTact," which combines contact (face-to-face) elements with untact (non-face-to-face) strategies in the untact era, is also in the same context. Although these terms differ slightly in timing and concept, their approach to creating new value through the exchange and fusion of digital and analog is the same.

Although digital transformation has emerged as an important task, most Korean companies still operate primarily in analog ways. While there is consensus on the overall concept of digital, there is often confusion in the specific details of integrating digital concepts into current businesses. However, there is little time to explore. New trends applying digital technology in various traditional analog service industries closely tied to daily life?such as laundry, restaurants, food delivery, parking lots, and butcher shops?are shaking up the market landscape. The fundamental direction for analog companies responding to challenges from emerging digital companies is the fusion of analog and digital as suggested by DX, DigiLog, Phisital, and DeepTact. In particular, the key is the reinterpretation and restructuring of analog business capabilities such as offline store networks and face-to-face contact points from a digital perspective.

Industries in the maintenance phase of existing order exist like solids. However, during paradigm shifts, industries become fluid like liquids. The turbulent year 2021 is both a challenge and an opportunity for analog companies.

Kim Kyung-jun, Vice Chairman, Deloitte Consulting

This content was produced with the assistance of AI translation services.