Riding the digital business wave
Take a look at these slides and let me explain how the business landscape is changing. It’s driven by major changes in infrastructure and things we already know. There are global economic pressures where access to low labor costs in Asia, Eastern Europe or South America facilitates outsourcing and offshoring, all supported by the connectivity provided by the Internet, extended by the enormous increase in Wi-Fi, 3G and 4G access so that we now live in an “always on” world.
These things have dramatically lowered the cost and barrier to entry for any business start-up idea. It promotes an explosion of entrepreneurship. It enables the crowdsourcing of expertise from Wikipedia to Waze. This gives us a new generation of Millennials who have grown up digital in order to think differently, communicate and multi-task in ways that will forever change the expectations of the (digital) workplace. These are the factors underlying the ideas of Thomas L. Friedman The world is flator which facilitate access to niche markets behind Chris Anderson The long tailor give us Clay Shirky’s Here is everyone. These factors form the foundation of the wave.
Then we have the Big Shift. For 50 years Moore’s Law has driven change and innovation in technology. Every 5-10 years we have experienced a major technological disruption that has changed the way we do business, created new businesses and seen others disappear. We went from the mainframe computer to the minicomputer, then to the advent of the IBM PC in 1981.
We networked computers and created the era of client/server applications, then saw the beginning of the Internet, Web 1.0 and the rise and fall of the Dot-coms. Then things started to get interactive with Web 2.0. However, we have never had more than one technological disruption at a time, until now. Now we have three major technological disruptions happening simultaneously, and this has never happened before.
The shift to cloud and web applications is happening at the same time as the shift to social media where all markets are conversations, and it’s happening alongside the move to mobile – smartphones and tablets mean most of us carry the internet in our hands. This Big Shift is the next layer of the wave.
In addition to this, there are emerging technologies such as Internet of Things, Big Data and Analytics, Artificial Intelligence, and 3D Printing. Each of them has the potential to have an even more profound effect on the global economy, the global supply chain and the functioning of businesses. Today’s market has more demanding customers, faster-changing technology and more competition than ever before, and the rate of change is accelerating. These emerging technologies form the crest of the wave. Whatever company you are in your business model, it is threatened by a smarter, more agile competitor who will use technology to overtake you in a new field of play.
The problem is that most companies are too focused on the day-to-day. They think business is business as usual. They have legacy business systems, with old-school user interfaces – check-in systems that keep track of business scores. There is often a lack of integration.
Where social media initiatives or communities have been started, using the new web tools they are slipping over existing systems rather than connecting properly. They are alternatives to email for communication instead of a game changer. They are point solutions or provide siled information, when you need to think holistically about the business. Business as usual will be overwhelmed by the wave.
To ride the wave, we have to think differently. We have to think “digitally”. We need design thinking and an innovative business model. We need to create engagement systems that connect and engage with our customers and partners. We need to think in terms of using digital and social tools outside, but especially inside our companies to create the connected digital workplace and a new way of working.
Digital thinking will help you ride the wave, but it needs to be applied across the business. We use the McKinsey 7″S” Frame to look at all aspects of the business – no matter what framework and approach you use, as long as you think beyond “putting lipstick on a pig” with a touch of digital and social sitting on your “business as usual”.
We are now moving to an “Everything as a Service” world where businesses love AirBnB are changing the hospitality industry, Uber is changing the taxi industry and Apple is about to change the card payment industry. As I said before, no matter who you are and what company you work for, your business model is under threat and you need to use tools like the Business model canvas and the Value Proposition Canvas rethink and refocus what you do.
We talk about digital transformation – what is it?
You will have noticed that companies that used to talk about social media in business, or enterprise 2.0 or social business, are just starting to talk digital instead. Social collaboration tools and platforms are an important element that you could use in your evolution or transformation to do better business. By using the term digital, we emphasize that you need to think beyond simply adding social and mobile technologies on top of your legacy systems. You have to leverage your existing technology, those recording systems, and make them work better.
You need to think about using technology to help you get to market faster with new offerings and reach your customers in new ways. You need to reevaluate your business and your value proposition and stop thinking like nothing happened. You need to start thinking “digitally” for your business and a whole new generation of technologies, as well as looking at how your business communicates and interacts.
You don’t need to change your business structure, but you should recognize that we now live in a networked world where every person in your organization can be involved and engaged in the same way they connect with brands in his personal life. Smart companies can scale a digital strategy. Business as usual will be left behind. If you’re behind the curve like a Kodak or a Blockbuster or even a Phones 4U, you need to think in terms of a bigger digital transformation. But going digital to survive is a no-brainer.
Sounds interesting, but why bother?
If it always seems nice to have a supplement rather than a vital one, the most important thing is that it works! Take a look at these survey results from Capgemini Consulting and MIT Sloan Management in their report “How digital leaders outperform their peers across industriesThey divided the organizations surveyed into 4 categories, with the most digitally savvy being called the “Digirati”. Going digital directly contributes to the bottom line.
David Terrar combines over 30 years of business management, operations, sales and marketing know-how with 10 years of hands-on experience working with social media to advise businesses on digital strategy and the deployment of new technologies. He is a regular speaker at Cloud and Social Business events. Although his story is rooted in traditional enterprise software, he is passionate about the great simultaneous shift to cloud computing, mobile devices, and social media, how these technologies can be deployed to transform businesses, and how how these trends are changing the world of work. David will speak at the Enterprise 2.0 Summit next month, which is supported by diginomica.