Going digital is
key to future survival
Going digital is
key to future survival
Learn how companies have strived amidst digital transformation and unlock the potential for your business.
Enterprises face a piquant situation. On the one hand, emerging technologies are dramatically reshaping the global business landscape and opening up unprecedented opportunities.
At the same time, it has become a question of survival for most organisations. Companies need to transform digitally in order to not only thrive but also survive. Not being able to so or not transforming fast enough can mean being disrupted and even ousted from the market. The global corporate landscape is littered with companies that fell by the wayside as they did not or could not transform fast enough.
Digital transformation refers to the process by which companies digitalise their operations, business models, capabilities and corporate culture in order to create value for their customers. Research has indicated that it can potentially unlock net benefits greater than US$100 trillion for businesses and society by 2025.
Why is digital transformation the key to success? There are many reasons but the most important one is that it changes both the company culture and the way it does business. As a result, a digitally transformed company derives a number of benefits.
These include reduced cost due to optimised use of technology. New technologies also provide better visibility into customer preferences and this leads to better customer strategy. Digitalisation also provides the ability to combine data from all customer interactions, both structured as well as unstructured, into actionable information and this again results in better customer experience. With better visibility businesses can move to more adaptive and agile business models based on customer preferences.
It also helps to streamline business workflows and eliminates overheads associated with outdated ways of doing business. A digitally transformed company can identify silos that span multiple functions and, as a result, processes become much easier, allowing an organisation to increase its efficiency and impact.
With the increased agility and innovation enterprises are better equipped to adapt to their customers’ needs and tackle the competitive industrial landscape. Most importantly, connecting enterprise-wide systems and technologies into one system helps to unversalise customer experience, regardless of when, where, or how they choose to interact with a brand.
Digital transformation has upended tried and tested business models that have been responsible for decades of corporate growth. In its place, today’s new normal is an environment where customers expect highly-customised services delivered instantaneously as and when they demand it.
For decades, the retail business model relied on customers walking into physical stores, selecting the items they wanted and then paying for them. The business model depended on brand loyalty, store-wide promotions and price discounts to attract, and retain, customers. Businesses did not have the means, neither did they particularly care, to understand the shopping habits of individual customers and their specific needs.
Today, thanks to companies such as Amazon, Lazada and others, customers are shopping online from the comfort of their homes. Online shopping has become the fastest-growing global channel in the retail industry.
E-commerce companies are able to study the data they have on customers shopping habits on their platforms to target them with offers that are specifically tailor-made for them. The success of companies such as Amazon and Alibaba has spurred established brands like Walmart and others to develop their digital strategies in order to stay competitive.
Incumbents in many industries are now playing catch-up to digital native companies, many of which have gone on to become multibillion-dollar corporations in a relatively short period of time.
That being said, it’s not game over for legacy companies. They have distinct advantages that can help them to keep up with the accelerated pace of change brought about by new technologies, without needing to overhaul their entire businesses.
For starters, these companies are better established and, therefore, have recognisable brand value, loyal customers, talented employees and relatively large budgets to implement necessary changes. By digitally transforming they can keep on thriving.
Research agency IDC estimates that spending on digital transformation will surpass US$2 trillion in 2019 and that 40 per cent of all technology spending will be for digital transformation technologies.
According to global consulting firm McKinsey, satisfied customers tend to spend more, display deeper loyalty to companies and create conditions that allow businesses to have lower costs and higher levels of employee engagement. McKinsey said its research found more than half of customers said that they were more likely to buy from companies that delivered custom content.
In an environment where technology has levelled the playing field between giant corporations and young, ambitious startups, companies need to be prepared to respond to the changing business landscape quickly and effectively.
Some companies are doing that by creating new products and services. Take Under Armour as an example. The company used to be known for its sports apparels that had sweat wicking technology in them. That technology was easily imitable, which is why the company explored other products to retain its competitive edge.
Under Armour entered the digital space through a series of acquisitions of health and fitness apps and used artificial intelligence (AI) to build a platform called “UA Record”. That app provides “evidence-based coaching” around sleep, fitness, activity and nutrition and is synced with Under Armour’s running shoes. Data collected from the app is used as design cues for products. The company transformed itself from just being an apparel maker into one of the best recognised brands in fast growing Fitness Lifestyle market.
Digital transformation is relevant for all companies irrespective of their size or the sector they operate in. Companies need to do an internal assessment to identify gaps, problems and potential threats before starting their digital journey. They should then engage an experienced and reliable technology partner to support their digital transformation. A reliable technology partner will ensure that digital transformation is not about survival but all about scaling new heights.
Find out how StarHub Business can support your business digital transformation at starhubinnovates.com.
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