We all acknowledge the impact digital has had on our everyday lives. “Big data in our pocket” allows us to connect to the world in a way that was unimaginable even 5 years ago. Wherever we happen to be, the way we stay informed, engage with one another and transact has changed forever. Customers have been liberated from the traditional business / customer “diktat”. They can now effortlessly research competing offers and share information and opinion within their online communities, informing their decisions.
A number of industry sectors have already experienced these (well documented) changes – media, retail services, health and financial services to name a few.
One of the results of this is that costs have fallen dramatically. Look at a practical example – setting up a business. Email and calendar, file storage, accounting, CRM, collaboration and project management capabilities are all available in the cloud on a rental basis, lowering the cost of such services to a fraction of that needed 5 years ago
The digital business challenge – to deliver value
The digital business challenge that all businesses (and by that I mean both management and employees) face – to continually deliver value to their customers in the light of these cost pressures – has never been greater. Yet despite this, many organisations have a “business as usual” attitude to digital, restricting effort to web, mobile and (perhaps) social media. Why the disconnect?
Firstly, many business people haven’t yet fully comprehended the real impact of digital on their world, even though they are active users of digital technologies. To understand why it’s important to place digital, and its impact on our daily lives, in an historical context.
General Purpose Technologies – Game Changers
There have been a finite number of technologies invented that ultimately affect economies at a global level. Economists label these types of technologies or innovations “General Purpose Technologies” (GPTs). GPTs are so powerful that they “interrupt and accelerate the normal march of economic progress”.
One of the characteristics of GPTs is the way they can be used and leveraged by downstream sectors resulting in generalised productivity gains. An example is the steam engine, which heralded the Industrial Revolution. Railways brought about the flexible location of factories, suburbs and commuting. The internal combustion engine resulted in mass transit (land, sea and air).
Digital is a combination of GPTs and is driving the profound economic change of our time. The consumerisation of technology (smart devices), development of cloud offerings (mobility), rise of social networks (connectedness) and availability and use of data (information and hence choice) is a powerful combination of technologies and innovation. The speed at which change is taking place is accelerating, driving enormous productivity gains, creating new businesses and changing the competitive dynamics of existing industries.
A “whole of business” approach is needed
Responding to these changes requires a “whole of business” effort, not just one confined to, say, Marketing. How companies connect to their customers, engage and collaborate with their employees and make use of cost effective, flexible and scalable technologies are all vital components of the response to digital change. Like the iceberg, it’s what you don’t see (or know) that will hurt you.
The “business as usual” response to digital business misses key requirements and capabilities
In the digital business age, “business as usual” won’t be enough to win.