Anirvan Sen, Chief Executive Officer, Fifth Chrome.
The proliferation of digital technologies over the last three decades has turned traditional business models on their heads. Globalization coupled with technological innovation and mass consumerization has compelled organizations to rethink their digital strategy.
Today, digital technologies touch virtually every aspect of our lives whether it’s our workplace, our homes, gyms, bars, restaurants or cafes where we have our regular latte macchiato. At a time when we’re collectively generating over 40 zettabytes of information every day in the form of emails, tweets, social media posts, connected cars or plain old search queries, not having a robust digital strategy is highly irresponsible and callous.
We are now at a tipping point where digital technologies will no longer play peripheral roles but are going to drive our lives in the very near future. 2020 and the coming decade will be the defining moment for the technology evolution. This year alone, we’ll produce 40x more data than the number of stars in the observable universe. That’s why it is an absolute must that you are prepared and fully geared up to embrace digital technology whole-heartedly.
A Brief History of Digital Evolution in the Modern Enterprise
Since the launch of the first Enterprise Resource Planning (ERP) systems in the late ‘80s and early ‘90s, businesses have witnessed a sea change in the way we collect, store and use digitized information. From storing data on physical papers, we initially moved to local computing machines and portable disks. This gave way to on-premise file servers in the early 2000s. After that came the concept of storing information at a digitally connected location i.e. cloud computing in recent times. This evolution has led to full-scale consumerization of data resources and computing capabilities.
In 2004, a Harvard sophomore launched a social media site that connected students within the university. The site reached a thousand registrations by the second day of its launch. Within a year, Facebook became the harbinger of the new digital order. Soon, platforms like YouTube, Twitter, and LinkedIn followed suit and changed the way brands, customers, and people interact with one another.
Technology has continued to change over the last four decades. Ironically, the same can’t be said about a typical organizational approach to technology management. Management of information and technology has largely remained archaic. For any new technology, organizations in the past would embark on a low-risk, slow-adoption process. After all, technology implemented was considered complex, time-consuming and Herculean by many organizations.
Looking at the 2020s and beyond, organizations can no longer afford the luxury of time as the technology keeps changing at an ever-accelerating pace. Businesses now need a swifter approach to understand and adopt new technology and must have a robust digital strategy.
Compelling reasons for a must-have digital strategy
Digital 2.0 is creating a massive number of opportunities for businesses and individuals alike. Companies that can exploit these opportunities are likely to get exceptional growth in the near future. The irony is that there will be many amongst you, will not be brave enough or prepared enough to embrace digital in time and unfortunately, risk disappearing into oblivion in the future.
So, how do you prepare your business to survive and thrive in the 2020s and beyond?
A good starting point is to get a comprehensive understanding of various aspects that are influencing the business world and creating a compelling need for every business to embrace digital technology. Over the last few years, we have analyzed and distilled a set of 11 most compelling reasons why every business needs a robust digital strategy.
Death of distance:
Tremendous advances in technology, internet, global connectivity, and telecommunications have broken through geographical barriers and help individuals and organizations to connect seamlessly with others across the globe. You can now easily trade with a business halfway around the table, by a click of a button, from the comfort of your living room. It also, means that your clients are also, being contacted by competition that you have never seen before.
The world is your oyster:
Apart from removing distance barriers, global connectivity exponentially expands the universe of your addressable market. You can now access millions of potential customers through digital channels at a fraction of the cost of the past conventional marketing budgets. If you can think of creating a digital arm of your service or your business, you can utilize this greatly expanded market universe. Keep in mind that the universe that you can address is also the same universe for your competition. The trick is creating a good product or a service that can easily scale-up.
A direct outcome of the digital revolution has been the sheer volume of information that is generated and consumed on a daily basis. The emergence of smart devices (TVs, vehicles, refrigerators, etc.) has led to a steep increase in the amount of data produced. The field of Internet-of-Things (IoT) has thrown the door open for businesses that collect and interpret this data to understand customer behavior, optimize inventory management and identify risks. Allied technologies such as machine learning (ML) and artificial intelligence (AI) help businesses to make sense of these data and recommend an ideal course of action.
Petite cost of entry:
The price for entry is at an all-time low. Today, it is common to see a multibillion-dollar business that started out with just a laptop, an internet connection, and basic infrastructure. All you need is an idea that addresses a specific problem for your potential customers. Gone are the days when starting a business needed significant capital investment. The democratization of business models has unleashed innovation like never before.
With crowdsourcing, open platforms and service aggregator platforms, individuals and businesses can easily create products and services to address market needs. Whether it is a web developer, or a designer for your coffee mugs, a virtual assistant or even a chemical engineer for your R&D project, online platforms can connect you with people that you are highly unlikely to come across in the physical world. So, innovation is being crowdsourced in 2020.
Digital channels like IoT and social media are helping businesses uncover valuable insights about their customers and prospects. In the past, businesses could only monitor customer behaviors after a purchase. Today, sales funnels and marketing pipelines fueled by digital solutions can help you map your customer journey even before they hear about your product or service. These channels also help you leverage data to provide personalization on a scale unimaginable previously.
Fail fast, learn faster:
Thanks to digital 2.0, continuous feedback loops allow you to conduct experiments swiftly, fail fast and learn faster. Real-time reports and feedback are helping businesses optimize their strategies to improve outcomes and innovate freely.
The generational gap has never been as apparent as it is in the current digital age. Millennials, broadly regarded as digitally native, are driving the new era of growth and innovation in the business world. Millennials can be your customers, employees, and can think of radically different ways to approach your business. Their heavy reliance on new-age digital technologies makes it crucial for businesses to be able to connect with them.
Social influence leadership:
In a connected world, digital channels provide a unique opportunity for individuals and businesses to showcase their expertise to establish themselves as thought leaders in the industry. In today’s knowledge economy, thought leadership is a key differentiator and often an indicator of business success.
Credibility through transparency:
Social media and the internet, in general, have brought an unprecedented level of transparency in business. From customer reviews to employee ratings, ‘netizens’ hold the key to your company’s fortunes. Consistent feedback determines your credibility as a business.
Free as a new service:
Subscription-based services are redefining business models across industries. You no longer need to spend large sums of money to buy software or services that you use for your business. With pay-as-you-go models, you can easily switch between services as and when you need them, and this offers amazing flexibility to businesses especially SMEs to efficiently use their working capital for other purposes. Freemium models or try-before-you-buy services have taken the customer experience to the next level.
None of these 11 aspects are new or have been recently invented. All of you would have been exposed to them in some shape or form. Individually they may seem like such a big threat but collectively, it assumes the size of a Godzilla or a tsunami.
Whether you like it or not, the world is changing. The challenge for businesses today is no longer about implementing digital technologies, it is how you leverage digital 2.0 to create an existential advantage for the future of your business.
Now is the time for you to decide whether to embrace the new digital order and be a Digital Fortuna or get deluged and fade into obscurity by Digital Tsunami.