Scaling businesses operating in traditional industries are challenging conventional business models by embracing technology. Fast growing ecommerce businesses are one example, which no longer depend solely on the traditional high street shop to shift stock, and have no limits due to location.
The impact of digital is evident in product and services offerings, in experiences and interactions with customers, and in supply chain organisation. Digitisation has blurred boundaries between sectors which creates a threat to some businesses, while for others it allows them to compete in multiple sectors offering opportunities for re-invention and growth. But a common factor for most businesses is that embracing digitisation is imperative to stay relevant in the market, to grow and to sustain or improve profitability.
Companies that have successfully implemented and embraced digital transformation have deployed new technologies and systems such as Internet of Things (IoT), cloud, analytics, virtual reality (VR), smart data, artificial intelligence (AI), etc.
The main purpose of this development being to better understand and anticipate customer needs with a view to improve existing experiences and offerings, create new ones and increase efficiency in delivery. This is not an one-off change but a continuous cycle of innovation and learning. This increased focus on client centricity, in addition to new technologies, presents a challenging cultural and operational transformation for many businesses.
Embracing digital transformation has also profoundly changed many businesses’ own value chains. The questions around who, how and where value is created in a digital world are giving rise to new answers, and businesses need to adapt to this to ensure value-creating differentiators in their business are optimised and protected. The way we have done things in the past is unlikely to be fit for purpose in the future. In addition an increasing reliance on working with alliances within ecosystems is creating ‘macro- value chains’ in which individual businesses operate – another change that needs to be addressed.
To implement digital transformation successfully, it’s vital to define an operating model which enables your business to work in a way that improves their collective performance and creates a competitive edge.
Align your operating model with the new fiscal/ legal landscape and recognise the value drivers’ contribution, as well as the benefits that come with effectively managing risk.
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