Digital transformation is tricky.
Everybody wants to be on board with it, and every company aims to transform itself as a technology company and a disruptor, but few get it right. The reason is that they make two serious mistakes.
The first mistake is that they fail to understand the difference between transformation and digitisation. They are two very different things, and understanding that difference is one of the tricky things about digital transformation.
Digitisation simply means that a business has replaced its manual processes with automated ones. There is little or no change in the business processes, the company culture or the customer experience. New devices and software are introduced, like a new point-of-sale system, a back-end accounting system or even an e-commerce website or a mobile app.
While digitisation is great and, done properly, can deliver incredible value to a company, it is not transformation. Transformation goes beyond technology and affects the very heart and soul, the very DNA of a company. It changes the way a company does business, with a particular focus on the customer experience.
One company that has been a forerunner in the digital transformation space is China’s Alibaba, the e-commerce giant. Founded by Jack Ma in 1999, Alibaba had the advantage of being born into the technology paradigm. The company did not start life as a traditional, brick and mortar- type business which then went digital; instead, like Amazon, it was founded as an internet-based business.
Alibaba went on to become a formidable tech giant, and also one of the most innovative companies on the globe, driving massive innovation in the online retail space as well as in a number of other industries.
Their most recent innovation is the futuristic FlyZoo Hotel in Hangzhou, China. The hotel is almost entirely operated by robots. From the moment you enter the hotel, you notice the difference: there is no familiar reception desk with smiling attendants. What you see is a robot that scans your identity document to confirm who you are, then scans your face and tells you your room number. When you enter the elevator, you do not need to push a button to select your floor. The facial scanner scans your face and recognises you; and because it is connected to the hotel’s booking system, it also knows your room number, and hence which floor you need to go to.
There are no keys or access cards to enter your room. Just like the elevator, the room doors are fitted with facial scanners. When you stand in front of the scanner, it automatically scans your face. If it recognises you, an LED on the door turns green, signalling that you can open the door to enter.
Although face identification is not groundbreaking from a technology perspective, the integrated way in which it is being used at this hotel is unique. When you enter your room, you will notice that, other than a futuristic decor, the hotel rooms are pretty standard, except for a voice-activated virtual assistant that you can instruct to do anything – from searching the web, checking the weather, turning on the television, opening and closing the curtains, adjusting the air-conditioning, and even ordering room service.
At the hotel restaurant there are no waiters; you order your food via a mobile app, and it is brought to your table shortly thereafter by a little robot waiter that resembles Twiki from the 1980s television series Buck Rogers. Only certain foods that the robot cannot manage to carry are brought by humans.
What is the overall experience of staying in a robot-run hotel like? Some of the guests describe the hotel as being extremely quiet, but not in a good way; they say it feels almost deserted. Other than the occasional guests you might bump into in the foyer and corridors, the place is devoid of people. There is no friendly receptionist, and no hotel staff anywhere to be seen. For this reason, people found the place a bit creepy.
Others found the facial scanning a bit creepy too, and there is a big question around privacy and information security. Alibaba claims the information is for booking purposes only, is never shared out of the hotel and is deleted after the guest checks out. How true this is, is anyone’s guess.
No doubt, the FlyZoo Hotel is a marvel of technology and is arguably the most advanced hotel in the world, with some impressive technology. Alibaba will soon make the tech available to other hotels and hopes to transform the hospitality industry through that.
“As smart technology is reshaping industries, the FlyZoo Hotel represents Alibaba’s endeavor to marry hospitality with technology, and ultimately inspire and empower the tourism industry to embrace innovation,” Andy Wang, CEO of Alibaba Future Hotel, the group operating the hotel
Will this tech be transformative? It is not possible to say at this stage because the other tricky thing about digital transformation is that it is driven by the customer. If the customers are happy, there will be adoption which will lead to transformation.
In the case of robot-run hotels, we’ll just have to wait and see if the customers will be wooed by the concept.